Tuesday, 12 July 2016

Life Insurance, Estate and Succession Planning – Feast or famine for the tax man


Jeffrey Scott is the Senior Manager, Product Development, Life Insurance at BT Financial Group. With 25 years’ experience in the financial services industry, he is a regular media commentator on the topics of taxation, insurance, superannuation and finance. He also created the first terminal illness benefit for life insurance products in Australia, helped develop lump sum income protection benefits and introduced full replacement (100%) cover for loss of income. He is currently completing his PhD in Taxation and Business Law at UNSW.

We spoke to Jeffrey about the upcoming 13th Annual Estate & Business Succession Planning day, and his session ‘Life Insurance, Estate and Succession Planning – Feast or famine for the tax man’.

Affiliated with The Tax Institute since 2006, Jeffrey told us the Annual Estate& Business Succession Planning day “is an opportunity to learn from the best taxation practitioners in Australia in the areas of estate planning and business succession planning. More broadly to the taxation profession, the conference is an opportunity to explore the latest case studies, legislation, and court decisions that will assist taxation practitioners in providing the best solutions for their customers/clients”.

Jeffrey’s session examines using life insurance as an estate planning and succession planning funding mechanism. It looks at the potential tax implications of various funding structures and the implications on beneficiaries, using insurance to fund buy sell agreements, how buy sell agreements can be structured, as well as key person insurance and tax implications.

He said, delegates “will take away some key tips and tricks, namely; document EVERYTHING. Lack of appropriate documentation can have adverse taxation implications for any SME. Also, life insurance is the most cost effective and appropriate business succession funding mechanism if the worst happens and someone tragically suffers a permanent disablement or death.”

“As most SME clients are too busy working in their respective businesses, my session will assist the delegates in raising awareness with their clients of the importance of planning for their inevitable exit from their business, either via retirement, buy-out, death or disablement” he said.

Jeffrey told us he will also cover “Whether or not using a SMSF to fund business succession arrangements is an appropriate strategy", hinting that "It’s not”.

Aside from being a regular presenter at conferences and seminars, Jeffrey mentioned he spends what spare time has “Completing my PhD thesis in Taxation and Business Law, and refereeing the odd ice hockey match - something that’s still in my blood as a Canadian".

The 13th Annual Estate & Business Succession Planning takes place 4 August 2016 at the Sofitel Sydney Wentworth. Find out more.

Super-sized issues: 2016 National Superannuation Conference

It has been a supercharged year for superannuation. And we’re only just past the halfway mark. Post-Budget, post-election and a post-mortem of Turnbull's lifetime $500,000 limit on post-tax super contributions later; superannuation is still the talk of town. Join us at The Tax Institute’s 2016 National Superannuation Conference in August to hear about all the changes. By that stage, our (super) slim majority government might have even begun to guide us through reform… 


Superannuation has been a bit of a regular on the political red carpet recently. Stepping out in its $2 trillion outfit, it has been labelled by many as the culprit of the Turnbull government’s election misfortune. Superannuation changes announced on Budget night – in particular, the lifetime $500,000 limit on post-tax super contributions – have managed to rock the confidence of Australians and cause a civil war within the Coalition.

Just over a week out from the election, it seems the government is still hung up on super. Bad joke aside, this $2 trillion industry is anything but a laughing matter. Malcolm Turnbull might have claimed victory after Opposition Leader Bill Shorten conceded defeat but his mandate to tighten tax concessions and cap the total amount that people can have in their retirement accounts faces a hostile future. Who knows what the government will decide, but one thing’s for sure – superannuation will continue to figure prominently in almost every government consultation in relation to the economy, the financial system and tax reform.

Invested in super

It’s clear from this year’s knife-edge election that superannuation dominates Australia’s financial services industry. Large funds and self-managed super funds (SMSFs) contribute to billions of dollars in assets. The size of the industry is forecasted to grow, affecting the strategies and day-to-day operations of regulators and practitioners from the tax, legal, accounting and financial services fields. SMSFs alone continue to be the fastest growing segment of the superannuation industry and with the rise of technology, the sky really is the limit for the future.

With a raft of new proposals and the Australian economy deeply invested in super, it’s no surprise that these measures are the cause of divisive debates. How does this confused state of play affect Australians?

For investors and superannuants, the political and legislative limbo hinders confidence. For advisers, it makes it difficult to provide advice to their clients. It is likely that even with a majority government, implementation of superannuation measures will likely be delayed in the absence of legislation.

Super-sized issues

Super-sized super issues will continue to plague the Coalition. The government’s mandate is likely now to be centred on Budget repair rather than Budget implementation.

The main pain points from the Budget that advisers should look out for include (amongst other measures) the $1.6 million cap on the total amount of super that can be transferred into a tax-free retirement account, the reduction of the annual cap on concessional contributions to $25,000 for everyone and the Div 293 tax income threshold reduction from $300,000 to $250,000.

But perhaps the most controversial of the changes is the lifetime $500,000 cap on non-concessional super contributions (NCC), which took effect on Budget night itself. Backdated to 1 July 2007, some argue the measures are prospective, some argue that they are retrospective. More divisiveness and more uncertainty…

Advisers advising… what exactly?

So what’s next? How will the superannuation concessions announced on Budget night play out? Which policies will actually see light of day? How will changes affect investors, retirees and tax specialists?

This year’s National Superannuation Conference really has come at a pivotal time. Sessions are designed to cover issues related to large super funds as well as to SMSFs. Experts from both sides will tie in existing superannuation issues with new considerations arising out of proposed tax changes. Delegates practising in large funds as well as SMSFs can expect to hear the latest on how the outcome of the election will impact their practice.

Tax reform: are we there yet?


With all the political uncertainty going on, tax reform continues to be high on all major parties’ agendas to ensure the superannuation system is sustainable by reducing the extent it can be used for tax minimisation and estate planning. Chris Richardson (Deloitte Access Economics) will kick this year’s program off with the golden question about tax reform: are we there yet?

Drilling down to large funds, James O’Halloran, Deputy Commissioner, Superannuation (ATO) will shed light on the ATO’s perspective on present issues for large superannuation funds in both member taxes and reporting obligations and income tax. As a contrast, Kasey Macfarlane, Assistant Commissioner, SMSFs (ATO) will provide an update on present issues for SMSFs, including ATO insights and perspectives about key aspects of SMSF regulation and tax administration.

Current tax issues relating to defined benefit funds will be presented by Shayne Carter, CTA (Deloitte) and Phil Broderick, CTA (Sladen Legal) will speak on SMSFs, dividend stripping and dividend washing arrangements – issues that have been on the ATO’s radar in recent years.

The current state of play for both concessional and non-concessional contributions will also be discussed by Jemma Sanderson, CTA (Cooper Partners), who will address the issue of excess contributions. Brad Ivens (EY) and Philip Witherow, CTA (CBus) will also draw from the current climate and state of affairs to discuss emerging issues in superannuation due to other tax-related developments, such as the new AMIT regime and BEPs.

Stephen Callahan (KPMG) and John Edstein (REST) will also host a trustee/director workshop in light of ATO guidance on tax risk management roles and responsibilities of directors versus management.

This year’s conference will also showcase sessions with an international flavour. Roy Berg (Moodys Gartner Tax Law LLP) and Marsha-Laine Dungog (Moodys Gartner Tax Law LLP) will speak on current trends in the US tax treatment of Australian superannuation funds and its implications for US citizens and Australian residents with US tax reporting obligations will be explored. 

   

All up, a supercharged program! (Pun completely intended)

Like it or not, super big changes are on the way for superannuation. It has certainly been a volatile year. Tax and financial advisers are left with more questions than answers as everything hangs in limbo whilst policies are shelved as quickly as they were made. Join us and all the high calibre speakers at The Tax Institute’s 2016 National Superannuation Conference to find out more.

The 2016 National Superannuation Conference takes place 25-26 August at Crown Conference Hall, Melbourne. Including 12 CPD hours, choose from 12 sessions over two days and two streams (Large Fund and Self-Managed Superannuation Funds). The conference has been accredited by the SMSF Association and the Financial Planners Association. Find out more.

Monday, 11 July 2016

A look at some Corporate and SME stream sessions: 2016 Queensland Tax Forum

Here we speak to four presenters from 2016’s Queensland Tax Forum on what to expect from their sessions. From our corporate stream we look at our session on ‘Mastering the Indirect Tax Function’ and ‘Managing a Changing Tax and Shared Services Function’ and from our SME stream; ‘Expatriates and International Assignees – A Tax Guide for an Employer’s First Time’.

Mastering the Indirect Tax Function
Tony Windle, ATI, is a Partner in Indirect Tax at Grant Thornton and is the Global Head of Indirect Tax for Grant Thornton International. He co-presents the session ‘Mastering the Indirect Tax Function – From Both Sides’ with Toll’s Carlo Fogale, CTA, where they will look at how technology can be used not only to manage indirect tax exposures but also to add value across the business.

Working in GST for 17 years, and affiliated with the Institute for 10, Tony works with clients to reduce the marginal cost and streamline the management of indirect taxes affecting their businesses, and leads project implementation teams for tax technology and system upgrades on a global basis.

Tony tells us his session will help delegates “learn how to look at indirect tax compliance through the lens of tax technology, discovering emerging trends that will help them help their clients”.

Providing insights from both the adviser and the client perspective on their experiences in a global indirect tax enterprise resource planning (ERP) implementation, Tony and Carlo will discuss business transformation and value realisation across the aspects of people, process and technology in an ERP environment, and dig into the issues in tax determination versus compliance.

Managing a Changing Tax and Shared Services Function
Patrick Grob, CTA, is a Tax Partner at Deloitte. He joins Praty Patel, CTA, Chief Operating Officer with Stockwell, for a panel discussion on ‘Managing a Changing Tax and Shared Services Function’, facilitated by Andrew Lowe, CTA (Aurizon).

Patrick and Praty will deliver insights on the ‘how to, tips and traps, and war stories’ in the life cycle of an outsourcing project, from identifying the problem and need and evaluating alternatives right through to rollout and management.

Patrick tells us delegates can expect to hear “practical insights and shared experiences on outsourcing that will help them understand future change in an environment for tax function”, while Praty says the session will also help delegates “stay relevant and excel in changing times, helping them ask the right questions and get ahead of change”.

Looking at the wider Forum, Patrick tells us he is looking forward to “Tax Issues for Distressed Times [with Teresa Dyson, CTA, Deloitte and Evan Last, CTA, Deloitte] and Economic Insight [with Suncorp’s Daryl Conroy]”.

Expatriates and International Assignees – A Tax Guide for an Employer’s First Time
At Hatch, Melissa Rowbottom is Global Mobility Tax Lead (Asiapac) where she manages their expatriate population from a tax perspective. She began her career with PwC in Sydney and has over 10 years’ experience working in expat taxes. Melissa joins KPMG’s Hayley Lock for ‘Expatriates and International Assignees – A Tax Guide for an Employer’s First Time’.

Melissa says delegates can expect “an overview of the employment tax issues faced by business with a global population, and an insight into the main tax and employment of moving employees across borders, as well as in setting up business in new locations and developing economies.”

For an SME seeking to expand their operations globally, there is a confusing network of rules to navigate not only on their business tax considerations, but also on the various employer and employee obligations in those jurisdictions. Melissa and Hayley will look at issues including FBT and expatriate employment packages, superannuation obligations and bilateral social security agreements, reciprocal health care agreements and private health insurance requirements, and more.

Looking at the rest of the program, Melissa tells us she is particularly keen to attend “‘Employee Share Schemes in an Emerging Economy [with Stephen Holmes, CTA, WMS Chartered Accountants], and Praty and Patrick’s session [above] on ‘Tax and Shared Services Function’”.

The 2016 Queensland Tax Forum takes place 18-19 August at the Brisbane Marriott Hotel. Choose from 28 sessions over two days and a range of flexible ticket options with up to 13.5 CPD hours on offer. Find out more.

Monday, 4 July 2016

Trusts and Trust Losses – Everything You Need to Know – The 2016 Queensland Tax Forum

Damian O'Connor, CTA, is the Managing Principal of the specialist taxation firm Tax + Law. Here he tells us a little more about himself, and the session he is co-presenting with Paul Banister, CTA at the 2016 Queensland Tax Forum; 'Trusts and Trust Losses – Everything You Need to Know'.

“I started work with the ATO in 1974 and moved into private legal practice in 1998. Along the way I have had exposure to just about every tax issue there is. The challenge of getting my head around complex tax rules and providing practical advice to clients still gets me out of bed in the morning”, Damian told us.

Asked what attendees can expect to learn from his session with Paul, he said "Often the tax consequences arising from discretionary trust dealings can depend on trust law considerations. This session will explore some of those trust law issues, with a focus on some major cases over the last 10 years".

Common SME structures, too often trusts are used incorrectly or are assumed to be something they are not. Co-presented with Paul Banister, CTA (Grant Thornton), the session will be delivered from two perspectives, looking at what should be included in a trust deed, as well as important trust tax law cases, and what they mean in practice. Damian and Paul will also discuss resettlements, variations and vesting, tax accounting for trusts and what should be considered in family trust and interposed entity elections.

Damian said "Given the wealth held in discretionary trusts by clients, and the estate planning and business succession challenges we face as professional advisers, we need an understanding of some of the trust law issues that are being considered by the courts. This session will provide a practical framework for navigating some of these complexities when clients need practical advice about dealing with discretionary trusts".

Damian has been a Fellow member of The Tax Institute since 2003, progressing to Chartered Tax Adviser (CTA) status, attending his first Institute events “way back in the last century”. Asked which other sessions he was looking forward to at the Forum, he said “The session on Division 7A and UPEs should be very interesting, as Division 7A is an ongoing challenge for professional advisers”.

As for a life outside of tax, Damian replied "I enjoy getting to the football when I am in Melbourne, taking in some Queensland sunshine when I get the chance and to the great embarrassment of my wife Jackie, I have been learning to play the Ukulele”.

The 2016 Queensland Tax Forum takes place 18-19 August at the Brisbane Marriott Hotel. Choose from 28 sessions over two days and a range of flexible ticket options with up to 13.5 CPD hours on offer. 
Find out more.

Change is the only constant - The 2016 Queensland Tax Forum

The theme of this year’s Queensland Tax Forum reflects the fact that the economies, here in Queensland, Australia-wide and globally are in transition. While actual “tax reform” seems a long way off, we find ourselves in interesting times while the way our clients, be they SMEs or Corporate, do business is changing.

Here we speak to four presenters from 2016’s Forum on what to expect from their sessions, on career and team management, M&A transactions and interacting with the ATO, tax transparency, and state taxes.

Your career – Maximising potential in a changing environment
Stuart Cameron, CTA, has been with Suncorp since 1998, and affiliated with The Tax Institute since 1993. Stuart will take part in a panel discussion, facilitated by Praty Patel, CTA, and featuring Andrew Lowe, CTA (Aurizon Holdings), Janet McLeod (The WRAP Group), and Linda Tapiolas, CTA (Cooper Grace Ward Lawyers). The panel will discuss the need for businesses and tax professionals to adapt to survive, and how to do so in a way that maximises individual potential and that of our teams.

Stuart tells us that "After a 15 year period as a corporate tax specialist, I expanded my horizons to include capital markets, which lead to sufficient experience and recognition to move into broader finance and financial risk roles".

The session will look at investing in your career and those of your team for a seat at the table, and tips for managing teams for peak performance. It will also look at growing the business – understanding the business acumen and drivers, creating value and impacts on strategy. Here Stuart says "Having been a client of tax practices for 18 years, I bring the client’s perspective", and that the session will "provide insights into the benefits of a tax-based career, and a pragmatic, commercial approach".

M&A transactions: Managing the big issues and working with the ATO
Brendon Lamers, ATI, is a Partner at KPMG working in the Infrastructure and Property Tax team. He has over 15 years’ experience in providing taxation advice to a variety of financial institutions, foreign pension funds, infrastructure arrangers as well as to large domestic and multinational corporate clients.

Brendon will join Peter Maher of the ATO to present ‘How to Approach A Transaction – Interacting with the ATO’.

Every M&A transaction involves a balance of properly managing the big issues and working with the ATO to deliver appropriate outcomes. The increasing 'real time' involvement of the ATO in transactions means that engaging with them appropriately is even more crucial. Brendon and Peter will look at issues involved in doing so from both sides of the transaction, discussing corporate reorganisations as part of a transaction, specific issues arising out of the nature of investors, and the ATO’s views on topical transaction issues like MITs and approach to transaction management, including FIRB.

Brendon tells us his focus in the session will be around "how you can practically bring a transaction to a financial close in the volatile regulatory environment – whilst maintaining your, and your client’s, sanity".

Tax transparency is here to stay
Pressure on Australian corporates to respond to the demand for tax transparency is set to increase over the coming years. Co-presenting the session ‘Tax Transparency is Here to Stay’ with Ann-Maree Wolff, CTA, Board of Taxation, is Andrew Porter; current chair of the G100, the peak body for CFOs, and CFO of Australia’s largest listed investment company.

Their session considers tax transparency in Australia and practical aspects related to strategy and compliance. Asked what attendees should expect to learn, Andrew said "A corporate approach to voluntary tax transparency, and an understanding of the key drivers for corporates in such an approach".

Andrew and Ann-Maree will look at how the debate around transparency in Australia has been shaped by global factors, as well as emerging tax transparency initiatives within the Australian framework. They will discuss the proposed Tax Transparency Code, and look at the practical issues when an organisation is building its response to the changing tax transparency environment.

Asked which other sessions he was looking forward to, Andrew mentioned “[Daryl Conroy, of Suncorp Bank’s] ‘Economic Insight’, as well as ‘Tax Issues For Distressed Times’ [with Deloitte’s Teresa Dyson, CTA and Evan Last, CTA]”

State Taxes
With an economy in transition, the fiscal outlook for Queensland requires a careful review of Queensland’s revenue law and tax administration policy including areas for state revenue law reform and what this means practically for taxpayers transacting in Queensland.

Harry Lakis, CTA, is a Barrister. After 22 years practising as a solicitor and partner in national law firms, he commenced at the Queensland Bar in 2005. His practice includes a particular focus on Australia-wide state taxes and duties, as well as direct and indirect federal taxes.

Now into his fourth decade as a tax practitioner, Harry brings his considerable experience to our panel discussion on State Taxes on day two of the Forum, joining Sarah Blakelock, CTA (KPMG), Andrew Cornish, CTA (BHP Billiton) and James Petterson, ATI (Deloitte).

The panel will review Queensland’s revenue law and tax administration policy, including areas for state revenue law reform, and what this means practically for taxpayers transacting in Queensland.

Harry tells us that attendees will "hear about current tax administration policy and experience, and discover how to identify administrative and legislative pitfalls, specifically looking at managing transactional tax risk in the context of state taxes, a taxpayer’s rights to challenge decisions made by the Commissioner of State Revenue, practical tools taxpayers can employ to navigate commercial challenges, as well as possible opportunities for state tax policy reform and how such reform could drive investment in a rapidly transitioning state economy."

The 2016 Queensland Tax Forum takes place 18-19 August at the Brisbane Marriott Hotel. Choose from 28 sessions over two days and a range of flexible ticket options with up to 13.5 CPD hours on offer. Find out more.