The Government has announced a $17.6 billion investment package to support the economy as we brace for the impact of the coronavirus. The yet to be legislated four part package focuses on business investment, sustaining employers and driving cash into the economy.
THE FEDERAL Government has made a very significant change to capital gains tax (CGT) affecting expats, but it’s likely there are many Australians living overseas who are still completely in the dark about it.
The ATO has released further guidance on investment strategy requirements for trustees of self-managed superannuation funds (SMSFs). The guidance comes on the heels of ATO contacting 17,700 SMSFs in late 2019 where the SMSF annual return data indicated that they may be holding 90% or more of their retirement savings in one asset or a single asset class.
Many of you have heard of illegal phoenixing but are not sure of what exactly it encompasses. While there is no legislative definition of illegal phoenixing or phoenixing activity, at its core, it is the use of serial deliberate insolvency as a business model to avoid paying company debts. In a report in 2018, it is estimated that potential illegal phoenixing has an annual direct cost to businesses, employees and governments of between $2.85bn and $5.13bn.
The concept of super guarantee should be a very familiar to everyone, particularly anyone who is an employee, as it makes up the bulk of future retirement income. You may not know the particular name, but you would know about the requirement for employers to contribute 9.5% of your salary or wages into a nominated super account. You could also be salary sacrificing an amount of your salary and wages to put extra into your super.
Foreign residents beware, laws have been passed to restrict your access to claim the CGT main residence exemption on the sale of your home, except in some limited circumstances. This applies to any person that is not an Australian resident for tax purposes at the time of disposal (ie when the contract is signed to sell the property).
As the bushfires that devastated large swathes of the country continue on their destructive path leaving shatter communities in their wake, there are glimmers of hope with efforts to support and rebuild these communities starting to gather pace. In conjunction with these efforts, the ATO has announced automatic deferrals for lodgements and payments for taxpayers in impacted postcodes in the states of NSW, Victoria, Queensland and South Australia.
The ATO has recently withdrawn Draft Miscellaneous Taxation Ruling MT 2018/D1 on the time limit for claiming input tax credits and fuel tax credits. Generally, under s 93-5 of the GST Act, the right to claim an input tax credit expires after 4 years and commences on the day on which the entity was required to lodge a return for the tax period to which the input tax credit would be attributable. Section 47-5 of the Fuel Tax Act has a similar provision which limits claims to 4 years after the date which taxpayers were required to give the Commissioner a return.
While the Banking and Financial Services Royal Commission seems long ago in the minds of many, the people that have been financially affected by dubious practitioners will no doubt carry the scar of mistrust for life. This then, is precisely why the government has introduced new laws which will give ASIC new enforcement and supervision powers in relation to the financial services sector to weed out the “bad apples” and restore consumer confidence.
The ATO now has another "stick" in its arsenal to get businesses to engage with it and manage outstanding tax debts. Laws have recently been passed that allow the Tax Office to disclose tax debt information of businesses to registered credit reporting bureaus (CRBs). The aim of the laws, according to the government, is to encourage more informed decision making within the business community by making large overdue tax debts more visible, and reduce the unfair advantage obtained by businesses that do not pay their tax on time.
To combat the use of cash in black economy activities, the government has introduced a law which will implement an economy-wide cash payment limit of $10,000. If enacted, the law will make it a criminal offence for certain entities to make or accept cash payments of $10,000 or more. Understandably this limit has created some confusion about what transactions may be captured and what it applies to.
Do you run a side business in addition to your main employment? This could be in primary production (ie a farm or winery), retail or any other profession, trade, vocation or calling, provided it is not in a role of an employee. If you do, you may be subject to non-commercial loss rules, which are designed to restrict losses from "non-commercial" business activities from being offset against income from other sources, say your employment income.