Federal Parliament recently passed legislation that will allow small businesses to change the legal structure of their enterprise without incurring a capital gains tax (CGT) liability. Instead, the CGT liability can be deferred until eventual disposal. The legislation, ‘Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016′, will apply from July 2016. It provides an…
A large number of Australians who rent out a room in their home, whether it be via Airbnb or another avenue, are unaware that the practice can incur capital gains tax (CGT). Many assume CGT is not on the cards because profit made from the family home (or ‘primary residence’) is usually tax-free. However, those…
Wealthier individuals in Australia may have to pay higher taxes on their superannuation in the near future, with the government hinting that superannuation tax concessions will be reorganised to target those who are most at risk of relying on the age pension in retirement. Industry groups are expected to be advised of the proposed changes…
Franking credits are a kind of tax credit that allows Australian companies to pass on the tax paid at company level to shareholders. Franking credits can reduce the income tax paid on dividends or potentially be received as a tax refund. Where a company distributes fully franked dividends (and those dividends are included in the…
The ATO is currently working with insurance providers in a bid to identify wealthy Australians with policies that cover an expanded range of asset classes. Last month, the office launched a data-matching program, which involves contacting insurers to distinguish policy owners of various classes of insured assets that are often associated with wealth. Insurance policies…
FBT law includes different categories of fringe benefits and specific valuation rules for each category. FBT is a tax employers pay on benefits they provide to their employees, including their employees’ family or other associates. The benefit may be in addition to, or part of, an employee’s salary or wages. Employers who provide fringe benefits…
The ATO is currently targeting taxpayers who rent out their holiday homes for only a few weeks during the year but claim a full year’s worth of deductions on their tax returns The tax office is will be paying close attention to rental property owners, especially those who own a holiday home who incorrectly claim…
While the transfer of shares from an individual to their super fund will trigger a CGT event and therefore capital gains tax, there are ways individuals can minimise this. Individuals can transfer shares to a self-managed superannuation fund (SMSF) by completing an off-market transfer, also known as an in-specie transfer. An off-market transfer is the…