Thursday, 27 October 2016

Plan now to make the most of upcoming super changes

The 2016/17 Federal Budget was the start of announcements to introduce sweeping changes to superannuation. The taxation arrangements are changing significantly and while the ability to build superannuation balances will be greatly hindered for some people, new opportunities are also available for others grow theirs. 

“No strategy previously created for clients can be assumed to be appropriate or complying from 1 July 2017 – revisiting those strategies and adapting them to new laws will be imperative for advisers and their clients,” says Liz Westover, Director with PwC Private Clients.

With most of these reforms taking effect from 1 July, 2017, the 2016/17 financial year provides one of the last opportunities for many to contribute to their super balances under existing laws, but importantly to get their superannuation affairs in order to be ready for the new era of saving in super.

There are opportunities for Australians to make provision for the new super laws to assist in maximising superannuation savings but it is vital to understand what the changes will be, how transitional arrangements impact clients and what opportunities are available in this current financial year.

Liz believes that “Planning is required now to make the most of opportunities available. Many options will not be available after 1 July, 2017 and preparation will be key to ensuring the transitional arrangements are utilised correctly and appropriately for clients. With the introduction of other new measures and increased thresholds, no client will be left unaffected by the new changes and for many their ability to grow their super will be enhanced.

Education for advisers is a must during this period. “All advisers need to consider how their clients will be impacted and how they might avail themselves of opportunities this year and in the future,” she warned. 

Liz and others will be discussing these changes at the ‘Superannuation – What You Need To Know’ half-day seminar on 29 November at Citywest Function Centre, West Perth. Clients will need to be guided through these changes, so for accountants and advisers, it’s game on. To learn more on how to assist your clients, receive the latest guidance from local and interstate experts, as well as the ATO at the event. Find out more.

Thursday, 20 October 2016

The Tax Institute's engagement with the ATO

The big bold letters are a big bold reflection of The Tax Institute’s leadership and continual engagement with the Australian Taxation Office on matters the ATO are consulting on to achieve better outcomes for members!

Contact the Institute’s Tax Policy & Advocacy team to find out more or to get involved.

Tuesday, 18 October 2016

ATO Hot Spots - The 24th Noosa Tax Intensive

Fiona Dillon, CTA is an Assistant Commissioner in the ATO’s Tax Counsel Network. At the 24th Noosa Tax Intensive in November, Fiona presents the session ‘ATO Hot Spots’.

As Senior Tax Counsel, Fiona has been the ATO’s technical lead on a range of advice, litigation, reform and law design matters across a number of specialisations including trusts and Div 7A, has contributed to the strategic leadership of the ATO’s public advice and guidance, and has been a longstanding member of the ATO’s Public Rulings Panel. Her session will provide an overview of the ATO’s view on some current hot spots, including Div 7A. We spoke to her about what to expect at the Intensive.

Fiona told us “Attendees will be given insights into the Commissioner’s dealings with private groups and what are the latest matters attracting the Commissioner’s attention.” With audience participation welcomed, her session will also touch on questions around Division 7A and trusts: Sub trust or complying loan?; what constitutes “evasion”?; and issues including trust reimbursement agreements; fixed trusts post-Colonial First State, and the treatment of trusts as being fixed trusts by the Commissioner; as well as how alternative dispute resolution is working in practice.

Looking at the rest of the program Fiona is interested in the session ‘Loans and UPEs – Do We Need a Company Bypass … Or Maybe Even a Trust Transplant?’ from Greg Travers, CTA (William Buck), as well as hearing from other leading practitioners on trusts, Div 7A, UPEs and more.

In her life outside of tax, Fiona tells us she enjoys “Socialising with friends, travelling as often as possible, and I can also be found at the AFL, particularly when Port Adelaide is in Melbourne.”

The 24th Noosa Tax Intensive takes place 10-11 November 2016 at the Sofitel Noosa Pacific Resort. Find out more about Fiona’s session, and the rest of the program here

Monday, 17 October 2016

Capital Gains Tax – 31 Years On – The Great Debate.

Day one of the 24th Noosa Tax Intensive kicks off with Capital Gains Tax – 31 Years On – The Great Debate. This panel session will be facilitated by Michael Butler, CTA (Finlaysons) and features a number of experts in the area, including Brian Richards, CTA (Richards Advisory), and Mark Robertson QC, CTA, (Barrister at Law), who here tell us a little more about what to expect from the session.

“It is envisaged that the session will explore the legal developments of the CGT provisions and what that has meant in a practical sense to practitioners. The Panel will discuss where the CGT provisions have been applied in a particular way that perhaps the draftsmen did not originally envisage”, Brian said.

“What is a CGT asset, what is a liability, what is the distinction between pre and post CGT assets, what is the market value of a CGT asset, how do the CGT provisions provide for a sensible and practical treatment of trusts and interests therein will be matters touched on during the discussion. Have the underlying principles of the distinction between revenue and capital being blurred by the use of CGT concessions to provide differential CGT tax treatment of various transactions?”, he continued.

Mark tells us delegates will leave better equipped to help their clients “able to take away an effective historical approach to solving current CGT problems”, while Brian said “In addition to being informative and interesting, the focus of the discussion is intended to draw attention to some of the contentious and practical CGT issues confronting practitioners. Thought provoking notions will set the scene for further discussion during the course of the conference.”

Brian and Mark are joined on the panel by Gordon Cooper, CTA (Cooper & Co.) and the agenda includes the CGT treatment of restrictive covenant payments (Hepples), lease incentives (Cooling, Montgomery), less than arm’s length dealings (AW Furse, Collins), damages and compensation payments (Sydney Refractive Clinic), trust settlements (Oswal, Taras Nominees), and the old “chestnut”, the date of acquisition and disposal of an asset (Sara Lee).

Other highlights from the program include Paul Hockridge, CTA, and David Marschke, CTA, on private company capital management; Simon Steward, QC, FTI, together with ATO Chief Tax Counsel Kirsten Fish, CTA, looking at Part IVA and SME restructures; and perennial favourite Fiona Dillon, CTA, on Div 7A and ATO hotspots.

The 24th Noosa Tax Intensive takes place 10-11 November 2016 at the Sofitel Noosa Pacific Resort. Find out more.

Wednesday, 12 October 2016

Tax, technology and the potential for reform

by Noel Rowland *

A series of recent events touched on issues relating to technological change and tax reform.

Technology steering group

A few weeks ago, The Tax Institute convened the second meeting of its technology steering group.

The group was established this year to explore the impacts of technological change on businesses, the tax profession and The Tax Institute.

A specific focus is emerging trends, such as digital disruption and artificial intelligence, and their likely impact on members of the tax profession.

At this point, the group is asking questions and raising issues rather than forming definitive conclusions. For example, what will the tax professional of the future look like? How can the institute leverage technology to provide higher quality, more efficient services to members?

We’re also reviewing research developed by the Australian Taxation Office, accounting firms and others.

No tax professional today can ignore the fast pace of change. In fact, smart technology exists that, while not capable of replacing a tax adviser, may conceivably replace some of a tax adviser’s basic work.

In some countries, such as Brazil, the central revenue agency can already carry out immediate, 'real-time' calculations of an entity’s tax position.

It’s time to review the likely role of the tax professional in the next five years, 20 years and beyond.

Tax and Formula 1 – the parallels

Technological change was also a topic addressed by Richard Hopkins at recent events hosted by The Tax Institute.

Richard is the former head of operations with the Red Bull Formula 1 team.

He spoke about the massive changes (particularly regulatory and technological) facing the F1 industry. While his main focus was car racing, his comments were easily translated to challenges experienced by the tax profession.

For example, Richard explained how each year Formula 1’s governing body, the FIA, announces new regulations and specifications, often to address issues relating to specific technological advances impacting safety. It was fascinating listening to Richard talk about the F1 team’s responses to the new regulations.

In our environment, the practitioners’ creative response to regulatory amendments can be a source of innovation while always staying, of course, within the rules.

Peter Costello at the Menzies Research Centre

I was interested to hear reports of the former Treasurer, the Hon. Peter Costello, speaking at a Menzies Research Centre event on 9 September about the appetite and conditions for tax reform.

Mr Costello addressed issues such as economic reform and budget repair. He suggested that the absence of a budget surplus diminishes opportunities for major tax reform.

The tax profession can, therefore, rightly ask — where to now for tax reform? Is it possible in the near future? Impossible? Or are we restricted to incremental change?

The existing tax system is, of course, unwieldy and too convoluted. It cannot effectively address issues such as mobility of capital and labour and the growth of digital services. It also fails to take into account the complexity of the international tax environment.

In the political arena, however, the enthusiasm for reform appears to have waned on both sides of the ideological divide. It’s been put in the too hard basket.

A meeting of our region’s tax institutes

The 2016 meeting of the Asia Oceania Tax Consultants Association (AOTCA) was held on 5 to 8 October in Hong Kong. 

AOTCA was founded in 1992 and includes 20 organisations that represent tax professionals from 16 countries in the Asian/Oceania region.

At the meeting, participants discussed regional tax issues and trends. An associated international tax conference focused on the theme: 'Post-BEPS, opportunities and challenges'.

The meeting was interesting and worthwhile, primarily due to the potential for a coordinated response to multinational corporations’ tax avoidance measures – an issue that no country can address effectively on its own.

The revenue authorities in the region are working more closely together than ever before. The tax institutes need to do the same to stay abreast of, and influence, regulatory change.


* Noel Rowland is Chief Executive Officer of The Tax Institute.

Thursday, 6 October 2016

Simon Steward QC, FTI, at the 2016 National Resources Tax Conference

Simon Steward QC, FTI, is a barrister who specialises in revenue law. At October’s National Resources Tax Conference in Perth he will present the session ‘Can Salary Paid to an Employee Ever Be on Capital Account?’ and take part in a panel discussion on market value. We spoke to him about what to expect at the conference.

Admitted to the legal profession in 1992, Simon was called to the Victorian Bar in 1999 and appointed Silk in 2009. Specialising in the areas of Administrative Law, Taxation and Revenue, he is a Senior Fellow in the University of Melbourne Faculty of Law and is the immediate past President of the Tax Bar Association. He has been a member of the Institute for approximately 21 years.

Asked what attendees can expect to learn from his session, Simon told us he’ll be looking at “The deductibility of Salary, and whether salary and wages can ever be on capital account”.

A perennial issue for the energy and resources sector, the issue of the deductibility of salary paid to employees working on capital projects has remained unresolved since Goodman Fielder Wattie. Simon’s session will address this difficult issue head on by considering relevant authorities, different circumstances – e.g. employees working part-time or full-time, and offering his views on when such expenditure is or is not on capital account. Simon tells us delegates will “leave with improved knowledge of the law”.

Simon will also take part in the Market Value Panel Discussion, chaired by Hugh Paynter, CTA, (Herbert Smith Freehills). Joining Simon on the panel are Louise Clarke (Australian Taxation Office), Nicki Ivory (Deloitte), and Tim Kyle, CTA, (Greenwoods & Herbert Smith Freehills), who will offer different perspectives on topical market value issues such as:

  • The ATO’s approach to valuation issues
  • The Courts’ approach to valuation issues
  • Issues that still need to be resolved
  • How resolution of valuation matters can be improved.

The 2016 National Resources Tax Conference takes place 26 - 28 October at Crown Perth, Western Australia. Find out more