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Showing posts from 2019

Tax Issues for non-residents when acquiring, holding and selling Australian property

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Tax Issues for non-residents when acquiring, holding and selling Australian property

Through endless cycles of boom and bust, the complexities of property taxes remain constant.

The Tax Institute’s Property Day Series kicks off in Queensland on 27 August where Chris Dunne, CTA and Steven Paterson, Grant Thornton will be presenting on ‘Tax Issues for Non Residents when Acquiring, Holding and Selling Australian Property’.

In recent years a raft of new taxes and charges have been imposed by all levels of Government on non-residents that invest in Australian property either directly or indirectly.

Chris and Steven’s session will provide an overview of the key income tax, indirect tax and FIRB requirements for non-residents looking to acquire, hold and sell Australian property assets. We spoke to Steven for this post.

“Our session will take delegates through the investment life cycle and demonstrate the key tax issues which should be considered when advising clients in real time.”

Their s…

The 3 key traits that stand out with tax employers

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The tax profession is full of experts who want to stand out. Everyone is striving to get the best job offer or to step up for the next promotion. To be successful, you need to differentiate from the other professionals vying for the same position.

How will you gain your edge?

You could put yourself in the shoes of a prospective employer. Think about the type of person, and the skills, an employer is likely to value most in a professional tax environment. Then start work on building expertise in these areas.

To take the guesswork out of it for you, we’ve spoken to real employers of aspiring tax professionals and created this eBook. It’s written to help you identify and develop the skills and attributes you’ll need to take the first (or next) step in your tax career.

We’ve highlighted three key areas that employers focus on when recruiting new staff or looking to promote or reward within their team. Carefully considering these key areas will help you to stand out to employers and take …

Review of the Tax Practitioners Board

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Written by Stephanie Caredes, CTA

Members will have seen that late last week the discussion paper pertaining to the Review of the Tax Practitioners Board and Tax Agent Services Regime was released for consultation. This review is highly significant for all our members who are subject to regulation by the Board. The discussion paper covers a range of issues, including: Independence, real and perceived, of the Board; Community awareness of the Board; Whether aspects of the registration requirements of practitioners should be changed; Making the Code of Professional Conduct more dynamic; Imposition of sanctions; Possible amendments to the safe harbour; and The relationship between the Board and professional associations such as The Tax Institute. We are interested in members’ views on the discussion paper. It is crucial that members who are likely to be affected by any changes that will emanate from this review should have their say now. Please share your views with us via the Tax Policy …

Reading, interpreting and applying tax treaties – WA International Tax Day

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International tax is an increasingly important and complex area of tax law to Australian based business of multinational organisations.

Our increasingly globalised workforce sees individual tax payer’s arrangements becoming more and more complicated and investors face numerous and shifting regulations across an investment’s lifecycle.

Part of the 2019 International Tax Series, Harry Payne, ATI, Senior Adviser in the Perth office of PwC is presenting a session on how to read, interpret and apply tax treaties.

Providing a technical overview covering recent court cases on treaties and multilateral instruments, Harry will follow up with a practical review of how key Articles vary between key treaties. 
We spoke to him for this post.
“The global tax landscape has changed dramatically in the past decade and more change is proposed.”

“Along with some of the key principles on how Australian Tax Treaties operate and important aspects to consider in the application thereof, my session will look a…

SME Cases Update

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No stranger to The Tax Institute, highly anticipated presenter Robyn Jacobson, will once again be joining us at the VIC 7th Annual Tax Forum
Presenting a practical session on recent SME cases, she will discuss and explore the implications of recent court and tribunal decisions on issues that are of particular relevance to private groups and individuals.

We spoke with Robyn ahead of her presentation.

Covering a range of topics including CGT, Division 7A, superannuation and SMSFs, and the Commissioner’s administrative powers, Robyn says she “will explain the cases in a practical way so that practitioners can understand the cases and apply the principles to their clients.”

Asked about some of the the blind spots she'll be shining a light on, Robyn said “Digesting the relevant and practical issues from large numbers of cases each year can make it difficult for practitioners to keep up and be aware of every implication of tribunal and court decisions.”

“It can also be challenging to kn…

7 tips to stay motivated while you study

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Keeping up to date on current tax legislation and case law is essential for successful tax professionals. Yet, finding the time and motivation to continually learn can sometimes be difficult.   A study found that a whopping 80 to 95 per cent of students procrastinated regularly, particularly when it came to completing assignments and coursework (Psychology of Procrastination). And it can cut across all areas of their lives. They’ll leave important work to the last minute, miss opportunities to secure an early bird discount, cram the night before exams, and file their tax returns late.

In this post, we’ll explain how putting off important tasks is something many of us do, explain how to stay motivated while learning, and provide 7 suggestions so you can say goodbye to procrastination.
1.Procrastination is not a time management issue One of the first steps of getting motivated is to spend some time discovering why you’re procrastinating. What is really behind your self-discipline challe…

Issues arising out of “disruptive” activities and the gig economy

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We have seen a rapid increase in the gig economy, with rideshare services, food delivery and Airtasker, to name a few.

Technology has enabled people to find work, virtually at the click of a button.

What does the gig economy mean when assessing the engagement status of workers?

In her session at the 19th Annual States' Taxation Conference in July, Stefanie Merlino (PwC) covered the evolving gig economy, and considered the challenges and practicalities associated with assessing the already complex payroll tax and contractor provisions.

The paper Stefanie presented at the conference is excerpted in this post.
We are seeing an evolving employee versus contractor debate, which is creating further challenges when assessing the payroll tax implications of these arrangements.

With such rapid growth in business models, including growth of the gig economy and increased businesses entering the industry, it had become apparent that there was a need for Government to address the ever-chan…

Deceased estates – safe harbour from capital gains

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The Commissioner has released Practical Compliance Guideline (PCG) 2019/5 to outline:

1. a safe harbour compliance approach in relation to a sale of property acquired from a deceased estate outside of the two year period; and

2. the factors the Commissioner will consider when deciding whether to exercise the discretion to extend the two year period.

In August's Monthly Tax Update, Frank Hinoporos, CTA, (Hall & Wilcox Lawyers) looks at the key issues for advisers related to this PCG.

Pursuant to section 118-195 of the Income Tax Assessment Act 1997, where an ownership interest in a principal place of residence passes to an individual beneficiary or trustee of the deceased’s estate within two years of the deceased’s death, any capital gain or loss made on the disposal of the property is disregarded.

Taxpayers must satisfy all five of the conditions specified in the PCG if they wish to have the capital gain or loss disregarded.

The PCG provides a ‘safe harbour’ which, if it ap…

11 things to do before, during and after your performance review

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Performance reviews can be nerve-wracking and many struggle with the process. Here are 11 tips to make sure your next review is productive and rewarding. Supporting employees and providing an atmosphere and structure in which they can strive is one of the most important and challenging parts of building a business. Most organisations use the performance review process as one of the ways to do this.

However, even a year jammed full of achievement can be anxiety-inducing around performance review time.

Remove unwanted surprises and calm your nerves with a solid plan on what to do before, during and after your performance review. 
Before the big day Keep in mind that the process is designed to support you. Start by looking at the bigger picture and your career, not just your current role. This is where having a clear development plan can help map out the course of your career both within and outside your organisation.If it’s your first review at the company, put your anxiety at ease b…

SMSF structuring strategies and issues

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Utilising SMSF structures to fund investment opportunities is always a subject of keen interest for business owners and tax practitioners.

There can, of course, be good structuring and bad structuring approaches for SMSF asset purchases.

It’s important to know the difference between the two, or substantial penalties can apply, particularly where borrowed funds are used.

At the upcoming Private Business Tax Retreat on the Gold Coast, Andrew Ward, CTA, will consider a number of case studies to draw out the key structuring strategies and issues associated with SMSF structuring strategies and related issues.

We spoke to him for this post.

“I hope delegate will leave my session with a greater understanding of utilising SMSF structures to purchase larger assets - either through co-investing with other SMSFs or utilising limited recourse borrowing arrangement (LRBA) structures, including related party LRBA.

Andrew will cover the potential purchase of a business within an SMSF, look at issue…

July – what happened in tax?

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The following points highlight important federal tax developments that occurred during July 2019.

Each month, these developments are considered in detail in the 'Tax News' column of Taxation in Australia, the Institute's member journal.

Taxable payments reporting system

The Commissioner has made a legislative instrument that exempts entities that meet specific criteria from having to prepare and lodge reports with the Commissioner relating to payments to third-party contractors for courier, cleaning, information technology, security, investigation, surveillance or road freight services (TPRS 2019/1).

Commissioner’s general administration powers 

The Commissioner has issued a revised practice statement that outlines (for the purposes of ATO staff) issues that arise in relation to his powers of general administration (GPA), including the circumstances in which the Commissioner’s GPA may be properly exercised (PS LA 2009/4).

Employees guide for work expenses

The Commissioner …

Tackling the exercise of the Commissioner’s discretionary powers

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This post is an excerpt from the paper 'Tackling the exercise of the Commissioner’s discretionary powers paper, this month's free technical paper for members.

In his paper, Michael Flynn, QC, CTA-Life, challenges the exercise of the Commissioner’s discretionary powers.

This topic is important, as State taxation legislation vests the Commissioner with numerous discretions, many of which affect the determination of a taxpayer’s liability.

For taxpayers this topic is important if they find themselves in a dispute with the Commissioner. 
In some jurisdictions courts can only overturn an assessment based on the exercise of a discretion if the Commissioner commits a legal error. In those jurisdictions taxpayers can generally choose as an alternative to challenge the decision in a tribunal, which can conduct a full review of the exercise of the discretion. It is important to understand this before deciding in what venue to commence legal proceedings. 

Professional Development:Internat…

No restrictions to negative gearing? Think again!

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Negative gearing has been a hot-button issue in the recent federal election with significant focus on proposals released by the Opposition.

However, a draft Bill proposed by the government seemed not to attract anywhere near the same amount of attention.

In his article in August's Taxation in Australia, 'No restrictions to negative gearing? Think again!', excerpted in this post, David Krunic, CTA, discusses new concepts proposed to apply from 1 July 2019.

David's article points out that the proposals released by government seek to address tax integrity concerns (para 1.5 and 1.6 of the explanatory memorandum (EM)) involving:

"...some taxpayers ... claiming deductions for costs associated with holding vacant land when it is not genuinely held for the purpose of gaining or producing assessable income.

... there is often limited evidence about the taxpayer's intent other than statements by the taxpayer. The reliance on taxpayer's assertions about their cur…

Estimates and DPNs for GST to combat phoenixing activity

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Written by Bastian Gasser, ATI
Bastian Gasser is a GST Partner in Minter Ellison’s Tax Practice. Bastian chairs The Tax Institute’s National GST Technical Committee.
The recent Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 (the Bill), set to come into effect from 1 October 2019, is a part of the Government's suite of tough new tax integrity measures targeting illegal phoenixing activity. While the Bill is comfortably couched in the rhetoric of 'anti-phoenixing' activities, the Bill has far broader scope than it ostensibly appears. The Bill has also flown under the radar somewhat, these broader implications are finally being discussed in the media and by industry. The Bill, among other things, will make directors personally liable in certain circumstances for a company's actual or 'estimated' outstanding GST liability. Further, the drafting of the Bill could potentially impact legitimate businesses and will have significant implications for all …

7 tips to successfully build your professional self

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Tips designed to help you step up the career ladder.
Finding your place in the world of tax and finance can be tricky business. Technology is taking precedence in almost every profession and as everything around us becomes automated, showcasing your human assets to those around you will help you stand out.

Strong interpersonal, or “soft” skills are more important than ever and together with your technical or “hard” skills, make your ‘professional self’.

Here are our top seven tips on how to successfully find and optimise your ‘professional self’.
1.Visualise the ‘big picture’ Career planning will help you navigate through your professional life. Think about what you want, what you thrive on and what is important to you. This will help to picture your future self and enable you to end up where you want to be.

Think about peers that you consider successful. What is it that you admire about their success? What is it about their career that you would like to emulate? What did they learn,…

Tax Practitioners Board in the spotlight

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Written by Stephanie Caredes, CTA

On Wednesday 3 July 2019, I attended a meeting of the Tax Practitioners Board Consultative Forum. The Tax Institute regularly attends this forum to engage with the Board on behalf of the Institute’s registered agent members. Members would be well aware of the Board’s regulatory and disciplinary functions. Currently, 350 tax practitioners suspected of high-risk behaviour are being investigated by the Board.

Also in the spotlight is CPE. The Board is currently reviewing the CPE records and activities of registered agents to ensure CPOE requirements are being met. The Institute encourages all members registered with the Board to keep a log of their CPE activities.

At the Forum, the Board’s response to the Inspector-General of Taxation’s Review of the Future of the Tax Profession was discussed including the Board’s response to the recommendations made in that review to the Board. The Board has accepted the recommendations made by the Inspector-General. A …

6 ways to manage changes in tax

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Technological advancement, changes in compliance rules; change is here to stay in tax. Verina Morwood, Manager at Deloitte, on how to stay grounded when managing the ever-changing tax landscape. Verina is currently in her last year of a Master of Laws (Tax) at the University of Sydney.
Studying a Master’s degree allows her to deepen her understanding of tax concepts she is already using at work.
She says, “the technical development has been fantastic, and the best bit is that I then get to apply the content on a day-to-day basis at work.”
Along with managing a full-time job and postgraduate study, Verina also manages to remain an invaluable advisor for her clients in a climate where change has become the new constant. 
Any tax professional knows that change is here to stay, whether it be from automation, compliance changes or tax reform. 
Here are Verina’s six top tips to managing the stormy seas of change:
1. Remember the tax basics – don’t forget how important core skills still are.…