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Showing posts from March, 2019

Federal Budget 2019 – unveiling our brand new website

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The Tax Institute’s CEO Giles Hurst has some big news about the 2019 Federal Budget.

“I am thrilled to announce the launch of the Institute's first dedicated website in support for the Federal Budget,” says Giles.
“We're going to be showcasing the very best talent The Tax Institute has, with some great interviews with members that have played a big part in volunteering for us, some over many years, some more recently.
“We're also going to be allowing people to have deep-dive analysis from our Senior Tax Counsel, Bob Deutsch, CTA on the night of the actual Budget itself.”
“It's a Federal Election year, it's Budget time. The Tax Institute is at the forefront of everything that's going on right now, and so it should be. We're here to represent you, our members.”
You need to be informed
A Federal Election and Federal Budget are big ticket events for tax professionals in Australia. “Because there is so much going on, you're going to need to be informed, you&…

Labor’s negative gearing restrictions – how might they work?

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Originally published 16 November 2018

Written by Professor Bob Deutsch, CTA, Senior Tax Counsel The Federal opposition’s plans to introduce restrictions on negative gearing for investors, if elected next year, have received some much-needed clarification.  Last week, I was able to confirm with the Labor Party that their proposed changes to negative gearing would apply across the board to all investments. Previously it was thought that Labor’s negative gearing restrictions might only apply to property investment.  With this knowledge, the Tax Institute issued a media release outlining the good and bad news for investors.  Shortly after the media release was issued, I received feedback from Member 372 (see below) who suggested that “it is not the Institute’s business to act as spokesman or apologist for a political party”.  I thank Member 372 for their comments. However, with all due respect to the member, to suggest that by examining these measures, I am acting as an apologist for the Labor …

5 steps to solving complex client problems

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Tax Partner and lecturer Andy Milidoni, CTA, reveals how to solve complex client problems and provide first-class client advice.
Partner at Johnson Winter & Slattery, Andy is also CTA3 Advisory lecturer at The Tax Institute.

Why tax? We asked.
“I always wanted to do tax,” he says.
“I didn't sort of fall into it. At university, I picked up all the tax subjects and then went into the graduate program at the ATO”.
“I then worked in tax groups through the firms I was employed in.”
When asked what his greatest achievement has been, Andy says, “Some of my greatest career achievements include the private ruling application outcomes, APA advance pricing agreements and negotiating audit outcomes with the ATO prior to anything going to litigation.
“All of these have been because of the skills that I’ve honed over the last 20 years of my career. “It’s a great achievement for any tax practitioner, indeed lawyer, if we can keep our clients out of court and achieve really mutually acceptable …

Business succession – The current state of play

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It is important for all businesses to have a succession plan or exit strategy for their owners.

There are a number of factors that need to be considered in determining the best exit strategy for business owners including, what industry does the business operate in? is there more than one principal? can the business operate independently of the principals? what type of purchaser would offer the principals maximum value for the business? and so on.

In his paper, ‘Business succession – The current state of play’, presented at the recent South Australia Succession Planning Day, Michael Chrisohoou, CTA, looked at the key elements of a Buy-Sell Agreement, common structures for such agreements, and many of the issues and considerations involved.

Michael’s paper, excerpted in this post, noted that some of the possible options for exit include:
engaging in a competitive sale process through the assistance of a corporate advisor or business broker. This may ultimately result in: - offering the …

Research and development – A sleeping giant should be woken!

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Written by Bob Deutsch, CTA, Senior Tax Counsel
I have previously written about the Research and Development (R&D) tax offset contained in Division 355of the ITAA 1997 (TaxVine No. 27 - 28 September 2018).
That preamble was written specifically in the context of an AAT decision in Moreton Resources Ltd and Innovation and Science Australia [2018] AATA 3378.
Today, I take the opportunity to address more generally the R&D tax offset, particularly in the context of where we currently stand on all this in Australia.
As mentioned in my previous piece, the legislation in this area is complex and convoluted, running as it does to 21 pages of detailed technical content and includes a fairly complex definition of core R&D activities and supporting R&D activities. Whether it is consistent with what was originally intended or with what most might think of as “research and development” is open to argument.
My real concern is that the current legislation and its administration h…

Tax Director on keeping up with change

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Amy Hockey, Tax Director at Deloitte, says great leadership has never been more important in the face of change. 
“Great leaders that I've worked with have been confident, they keep it real, are great mentors, make time for the team, grab a hold of opportunities, are great teachers, but most importantly, they make tax fun,” she says.

“Tax is constantly changing,” says Amy.
“So, it's definitely very important to keep on top of your education and to continue learning in tax.

“After university, I did my CA and then my Masters of Taxation.

Membership:Harness the power of connections - apply for the 2019 Young Practitioners Mentoring Program. Applications close 31 March.
“I think what you need to do it to stay relevant,” she adds.

Her advice to tax practitioners for keeping up with change is to be open, be flexible, and to be a driver for change. 

When asked what advice she would have given herself when she started in tax, Amy says, “Focus on yourself and your own path. 
“I think people a…

Interest Withholding Tax – Common Issues

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Australia imposes interest withholding tax (IWT) of 10% on interest paid by Australian resident borrowers not acting at or through a permanent establishment outside Australia; or non-resident borrowers carrying on business in Australia at or through a permanent establishment in Australia (together, Australian Borrowers).

It is imposed on the interest paid by these Australian Borrowers to either non-resident lenders not deriving interest in carrying on business at or through a permanent establishment in Australia; or Australian resident lenders deriving interest in carrying on business at or through a permanent establishment outside Australia (together, Offshore Lenders).
IWT can also apply to interest paid in relation to other relationships, for example, interest paid by an Australian guarantor to an Offshore Lender or interest paid by an Australian debtor to an offshore supplier.
Education:Give your clients the best tax advice - become a CTA. Enrol into education developed and delive…

Division 7A and UPEs – The Road Ahead

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The tax and regulatory environment for small and medium sized businesses continues to evolve at a rapid pace with Treasury releasing a consultation paper proposing changes to Div 7A in October 2018.  
Scheduled to commence on 1 July 2019, we spoke with Chris Wookey, CTA, about the proposed Div 7A changes.
In recent times, Chris has participated in confidential consultation sessions with representatives from Treasury, the Board of Taxation and the ATO about the upcoming changes to Div 7A as well as being a member of the Board of Taxation’s reference group for its review of small business tax concessions.
When asked what he believed the blind spots where in this area, Chris explained that ‘at a technical level, they include the interposed entity rules (s109T) as well as those involving trusts with UPEs owed directly or indirectly to corporate beneficiaries’. 
At a practical level, he believed ‘the biggest blind spot would have to be the cash flow crunch in a couple of years’ time if the ch…

How mentoring could be key to your career success

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Trying to do great things is difficult. Trying to do them alone is, often, impossible. That’s why all great leaders have mentors. 
Most people who are successful end up that way because they’ve sought out mentors who share knowledge, skills and provide the networks to reach the top. In this post, we look at why finding the right mentor can be so valuable to your career progression, and provide some tips for getting the most out of a mentoring relationship. The benefits in working with a mentor Some people view a mentor as a kind of workplace guardian – someone who can not only warn you against making short-sighted moves that could damage your career and instead encourage you to do those things that may be uncomfortable at first but will reap great rewards in the future.

Experience is a valuable thing. And while there’s no substitute for earning it the hard way, there’s also no rule against leveraging the wisdom of others.

A good mentor will provide honest feedback on how you’re performing…