Confusion in Div 7A
Division 7A of the ITAA36 has been operational since 1997. However, the provisions are complex and their application extends beyond the boundaries of what many accountants think. Below are some common misconceptions around the application of Division 7A that I still seem to see: 1. Loans provided by a private company to another entity (say a […]
FBT or Div 7A
A common occurrence, particularly in family companies, is the provision of benefits to shareholders of a company in which those same shareholders are also directors of the company. The question will then arise; is that payment caught by Division 7A or FBT? As a general rule, a fringe benefit arises if the company provides a […]
Rollover relief for CGT
Where a depreciable asset is transferred between related entities and CGT rollover relief is available, the balancing adjustment can be deferred until the next balancing adjustment event occurs. The conditions for automatic rollover relief are: Type of CGT rollover Legislation Disposal of asset by an individual or trustee to a wholly-owned company The transferor […]
Tax deductions for SMSFs
One overarching fundamental that SMSF trustees should ideally keep in mind is the sole purpose test — that is, every decision made and action taken is required to be seen as being undertaken for the sole purpose of providing retirement benefits for the fund’s members. If an SMSF trustee incurs an expense in the usual […]
Base penalty amounts can be reduced
The ATO says its base tax penalty amount may be increased (s284-220) or reduced (s284-225). The base penalty amount may be increased where the taxpayer hinders the ATO, but it also may be reduced in the following circumstances. Voluntary disclosure The voluntary disclosure to the Commissioner of a tax shortfall will result in a reduction […]
C&D Advisory Newsletter Issue 1
Proudly debuting the first edition of C&D Restructure’s monthly newsletter. We’ll be using this newsletter to celebrate our team’s achievements, share comprehensive resources authored by our experienced consultants, and talk about important industry issues impacting our peers and clients. Newsletter Issue 1
FBT and cars
The provision of cars by employers to employees remains an issue that continues to create confusion for some business taxpayers. A not-uncommon situation is where the employer fails to identify that a car fringe benefit has been provided. This is typically found in family companies or trusts where a car bought by the business is […]
Basic in house assets
A not-uncommon conundrum for many SMSF trustees is what to do when the fund is found to have breached the in-house asset rules. There are also some common misconceptions about these regulations that keep resurfacing. What does the ATO say in relation to the in-house asset rules? Recent ATO statistics on the SMSF sector show […]
Tax and sharing economy
The concept of a “sharing economy” has been around for long enough now to have had a very real impact on how we transact. Think Uber, think Airbnb. By now, most people will have realised that the “sharing” part of the concept does not refer to an absence of any monetary exchange, but rather to […]
FBT and entertainment
In the run up to the end of the FBT year, the ATO reminds employers that a fringe benefit may be provided byanother person on behalf of an employer, but may also be provided to another person on behalf of an employee (for example, a relative). As far as “entertainment” goes, the ATO says such benefits include providing: Recreation includes […]
