Showing posts from April, 2018

Chantelle Rossiter – a worthy winner of our education competition

The Tax Institute’s most recent competition, which offered a prize of $4,950 worth of education with the Institute, was won by Chantelle Rossiter, a Manager, Business Advisory & Taxation, with Hall Chadwick.
We spoke with Chantelle about her career to date and the significance of professional education. Congratulations on winning our education competition. How long have you worked in tax-related areas?I wouldn’t describe my work as being in a core tax advisory role. It’s more general accounting and tax (business services), which I’ve done since I was a cadet around 14 years ago.
I'm not trying to make the jump into tax specifically, but the professional environment is heading towards the advisory space, particularly with the growth of technology and automation in compliance. So, the more expertise I can gain through education, the better. It’s good to have the answers to clients’ questions and to be the person that clients trust to know their situation, in a broad sense.
How di…

The tax rate tango

written by Robert Deutsch CTA *

The coming Federal Budget is likely to reveal some further tax initiatives that might assist the Coalition in its quest for re-election. One mooted change is a reduction in personal tax rates. I wonder if the Government might at the same time also consider some simplification around any new rates?

To that end, I put forward the following proposal:

What would all this achieve? Well, for a start, we would move from 5 to 4 brackets with more logical rounded bracket numbers and rates.

As the accompanying table shows, the crossover point would be $173,500. Tax would come down modestly for everyone on incomes up to $173,500 and go up slightly for everyone on incomes above that figure.

Of course, the Medicare levy would remain as an add-on.

I would suggest foreign residents should be taxed at 25% from dollar one rather than 35% (or as currently 32.5%). This reduction would at least make up for the recent disgraceful wholesale removal of the private residence e…

The Truth Behind Trusts - 2018's WA Trusts Half Day

Trusts, particularly discretionary trusts, have become a fundamental tool in structuring businesses and investments in Australia. Figures from the Australian Tax Office show there are now more than 800,000 trusts with assets totalling more than $3 trillion operating in Australia.

As a result, tax practitioners are increasingly faced with varied and complex issues with respect to the taxation of trusts. In practice, these issues require an application of tax law and trust law, as well as an understanding of ATO views and judicial interpretations.

At May’s Trusts Half Day in Perth, Modiesha Stephens, CTA and Lucy Ferreira (both HHG Legal Group) present the session ‘The Truth Behind Trusts’, a case study-focused session looking at some of the common practical issues relating to trusts. We spoke to Modiesha about some of the issues they’ll be covering.

“The Truth Behind Trusts focuses on some of the practical problems that arise when you deal with trusts, from lost trust deeds or unexpect…

Which area of tax should you specialise in?

A career in tax can open up rewarding opportunities. It’s a multifaceted profession, with areas you can choose to specialise in once you've completed your postgraduate tax education.

But how do you know which discipline is the right fit for your mindset and abilities?

Here are four areas you might consider focusing on in your tax training, along with the skills and experience you’ll need to succeed and the types of personalities that tend to excel in them.

Prof Bob Deutsch CTA on developing the Snapshot Series

Many advisers will tread the well-worn path towards specialisation in their careers. However, even as specialists, many also find themselves acting as a ‘jack of all trades’ on occasion, when they find the area they’re advising on touches on areas of tax that they don’t deal with on a regular basis.

The Snapshot Series, launched in March 2018, was developed with this in mind and provides at-a-glance coverage of key tax facts, figures and formulas across 15 tax topics, giving advisers the ability to stay across the fundamentals of areas they may not deal with daily.

Here we speak with the author of the series, The Tax Institute’s own Professor Robert (Bob) Deutsch CTA, about the development of this new member benefit.

“The idea for this series has been floating around in my head for about 10 years," Bob said, "but there was never an appropriate forum to move it forward until now. The impetus arose from my own experience when trying to conquer a new topic in tax – I could nev…

Material mistakes, material consequences for taxpayers

written by Robert Deutsch CTA *

Much warranted attention has been given to the Four Corners program which aired on the ABC on Monday night last week, and the series of articles recently published in Fairfax media.

That story and the articles undoubtedly demonstrate that, when material mistakes happen, they can and often do have material consequences for taxpayers.

Large taxpayers have access to the Australian Taxation Office's independent review program to ensure risks of poor administration are minimised. The playing field, however, is not level for smaller taxpayers. When one takes into account the powers and resources the ATO has at its disposal to impose tax assessments and pursue taxpayers, smaller taxpayers can struggle to have their voices properly heard in relation to poor administration by the ATO.

As a result, The Tax Institute is calling for serious consideration to be given to the possibility of having ATO decisions being referred to an independent body for further exa…

Structuring outbound infrastructure investment – 2018 National Infrastructure Conference

Outbound investment has become an increasingly important pillar in Australia’s economic growth, and equally an increasing focus for investors large and small.
Growing protectionist mindsets taking hold internationally among some of our largest recipients of outbound investment, combined with a complex domestic regulatory setting, mean that what should be a fairly straightforward practice is becoming somewhat fraught.
At May’s National Infrastructure Conference, Edward Consett, ATI (EY) will present a session on ‘Outbound infrastructure investment – key issues in structuring outbound investments’.

We spoke with Edward about some of the issues facing investors and their advisers.
“Australia’s high infrastructure asset prices, strong dollar and the continued growth of domestic funds available for investment mean that Australian investors are being increasingly encouraged to seek infrastructure opportunities offshore," Edward said.

"In my session, I intend to help delegates ma…

Chris Bray on creating the tax business of the future

Chris Bray, Director of Bray Chan Chartered Accountants, participated in a panel discussion at The Tax Institute’s 2017 SME Symposium.

In this short video he speaks about creating the tax business of the future, and some of the topics covered in the panel session. The panel session 'Evolution or revolution' also featured Grant Thornton's Steve Healey, CTA-Life, and Michael Cox of PwC.

The panel looked at what's involved in creating the tax business of the future, the effects the future will have on changing both the client and people experience, and asked what does embracing change and making a difference look like?

Education:Developed and delivered by industry experts, our programs and single subjects help you achieve your full potential in your career, your workplace, and in the profession.
On creating the tax business of the future, Chris says businesses need to “firstly understand what clients want. Secondly is consciously adapting the skill set within our businesse…

Stapled structures – is it really about something else?

written by Robert Deutsch CTA *

Late last month the Federal Government released the details of an integrity package dealing with so called stapled structures.

Essentially these structures arise where two or more entities are commonly owned and bound together such that the interests in them cannot be bought or sold separately. At least one of the two entities is a trust.

Such staples have been used in Australia by the property sector since the early 1980s.

The problem with these structures arose with the introduction of the so called Managed Investment Trust (‘MIT’) regime in 2008. That regime was aimed at increasing the attractiveness of Australia's fund management industry (especially commercial and retail property funds) to mobile foreign investment. It achieved this outcome by lowering the withholding taxes on certain distributions to foreigner investors, particularly rental income to the withholding tax rate of 15%.

As a result, foreign investors in stapled business structures…

Tax Awards celebrate our best and brightest

written by Tracey Rens *

A personal highlight, for me, from our National Convention was meeting the finalists of the Tax Adviser of the Year Awards and announcing the winners.

Congratulations to KPMG’s Stephen Carpenter, CTA (Chartered Tax Adviser of the Year), Arnold Bloch Leibler’s Clint Harding, CTA (Corporate Tax Adviser of the Year), the Australian Taxation Office’s Anthony Bach, CTA (SME Tax Adviser of the Year), and EY’s Aimee Riley, ATI (Emerging Tax Star).

As the 2018 Emerging Tax Star, Aimee is also the inaugural recipient of the Gordon Cooper Memorial Scholarship, which entitles her to participate in the Institute’s Graduate Diploma of Applied Tax Law at no cost.

Aimee was unable to attend the National Convention in person, but accepted her award via a pre-recorded video, displaying impressive confidence.

All of the award finalists I met are, in fact, fantastic ambassadors for our profession. It was a pleasure to meet them in person and to hear their unique stories. Above a…

Defensive planning: being proactive & also prepared to defend – 2018 Private Business Tax Retreat

While we have not seen substantive legislative change across areas that impact private business (aside from superannuation), there is a clear change of thinking around policies that generations of private client advisers have, more or less, taken for granted.
Although these changes are, for the most part, still evolving, they nevertheless must be taken into account when advising clients, particularly as decisions taken today in the context of existing laws may have long-term consequences in a new legislative environment.
In this post, we discuss the concept of defensive planning, previewing three sessions from the upcoming Private Business Tax Retreat to illustrate how modern advisers need to be both proactive and prepared to go on the defensive at the same time.
We highlight three key areas that embody this approach of being proactive while ready to defend:

Looking at that old cliché, that proper preparation prevents poor performance Outlining how keeping an eye on the horizon can pa…

Related party debt financing – 2018 National Infrastructure Conference

Released in December 2017 by the Australian Taxation Office, Practical Compliance Guideline PCG 2017/4 (PCG) has caused considerable controversy.

Dealing with related party debt financing, this guideline details how the ATO will approach compliance issues where a cross-border related party has entered into a ‘financing arrangement’, be it inbound or outbound, or a related transaction or contract.
At May’s National Infrastructure Conference in Melbourne, Jillian Gardner (Macquarie), James Nickless (PwC) and Shahzeb Panhwar (ATO) will present the session, ‘Upstream gearing – a focus on infrastructure and trusts’, which will look in detail at the ATO’s approach to debt pricing and the PCG, and a number of related issues. 

Here, James tells us more about the issues facing taxpayers, and what else to expect from the session.
“The debt pricing topic is one of the more controversial areas in the tax landscape at present. With the Chevron decision seemingly at odds with traditional views of the a…

SME demergers, capital returns & the small business restructure rollover – 2018 Private Business Tax Retreat

The ATO interpretation of the demerger rules has effectively put them beyond the reach of the vast majority of SME companies.
The small business restructure rollover, designed to allow small businesses to transfer active assets from one entity to one or more other entities without incurring an income tax liability, is seen by some as an alternative means of achieving a similar outcome.
Additionally, some advisers see the rollover as offering a more flexible option than provided for by Div 16K when undertaking other share capital dealings.
At the 2018 Private Business Tax Retreat, John Middleton CTA and Christine Palmer (both of Clayton Utz), will present the session ‘SME demergers and capital returns – is the small business restructure rollover the answer?’

Here John tells us a little about some of the issues they will cover.
“Christine and I are going to highlight some of the potential pitfalls of demerger relief for SMEs, and look at whether the small business rollover offers a useful …

Revisiting tax deductions in light of the Commissioner's address at The Tax Institute National Convention

written by Robert Deutsch CTA *

At The Tax Institute’s National Convention in Cairns in March the Commissioner of Taxation, Chris Jordan AO, disclosed a revealing fact – the percentage of returns that are incorrect when prepared by tax agents on behalf of taxpayers is greater than the percentage of incorrect returns prepared by taxpayers themselves. 

This is a particularly important issue for The Tax Institute as a body, and for our membership. It is important that we collectively take ownership of this issue and either demonstrate why the issue is not as bad as suggested or, if it is, that we take steps to fix the problem.

To that end, the Tax Institute has asked for some detailed granular information both regarding the nature of the errors that have been made and clarification as to whether a larger number of incorrect returns are being prepared by a few agents or whether the problem is more widespread. We are also seeking to clarify whether the data differs between Institute membe…