Showing posts from June, 2019

Stay prepared when planning for blind spots – 2019 SA Private Clients Day

Checking blind spots is crucial when advising clients. Here’s a preview of the 2019 SA Private Client’s Day.
The operating environment for private companies is increasingly competitive and complex. Many now investigating how to implement effective structuring and growth strategies, in local and global markets.
Julie Van der Velde, CTA, Principal and Founder of VdV Legal will be presenting at the 2019 SA Private Clients Day at the Adelaide Convention Centre on Friday, 2 August.
Her session will take a practical look at planning for the risk, if a person in charge loses legal capacity - What if your client doesn’t die? Planning for loss of capacity.
Julie has spent over 20 years working with SME businesses in South Australia and interstate, with a focus on family business and intergeneration transfers. Julie has been affiliated with The Tax Institute since 2002, winning The Tax Institute’s SME Tax Adviser of the Year award in 2017.
“Elder laws and problems that arise around loss of capacit…

The BHP case: What amounts to “sufficient influence”?

Written by Ellen Thomas

Ellen Thomas is a corporate tax partner at PwC. She advises on a range of M&A transactions, infrastructure investments and financial arrangements. She is co-Chair of The Tax Institute’s Large Business and International Technical Committee.

The BHP case: What amounts to “sufficient influence”?

There is one particular tax case currently on appeal to the High Court, BHP Billiton Limited (now named BHP Group Limited) v Commissioner of Taxation, that will be significant for all tax practitioners.

The case concerns the definition of “associate” – one of the most widely used terms in the Tax Acts. In particular, the High Court will consider what types of acts amount to “sufficient influence” of a company. 

This is a complex definition that frequently needs to be examined in practice, including in the application of the thin capitalisation regime set out in Division 820 of the Income Tax Assessment Act 1997 (ITAA97), and the application of the debt-equity rules in Divis…

5 things to bear in mind when choosing your learning provider

You’re looking for a learning program. Here are 5 things to consider before making the choice.
1. Does the program support you to meet your goals?
Consider your key personal learning goals. Are they academic, professional or both?

For example:

Academic: Do you want to gain an academic, qualification or are you looking to learn more about specific topics in Australian tax law?

Professional: Is your learning goal around advancing your career or being recognised in your profession with a designation or status? Do you want to build your network by learning with fellow professionals? Do you want to learn from experts in your field? Do you want to develop skills beyond technical elements of the tax law e.g. improving your tax research, advisory communication and business writing skills?

2. What knowledge and skills are you looking to develop?
Success in a professional career these days, requires significant subject matter knowledge But this expertise needs to be complemented by effectivene…

Tax Practitioner’s Board: Maintaining your CPD obligations

Tax is always evolving. It’s important to keep up. In fact, it’s part of your obligations as a tax professional.

This year, the Tax Practitioners Board began reviewing practitioners to ensure compliance with continuing professional education. The Tax Institute will be supporting them with random audits of members.

As a Fellow or Associate, you must complete 15 hours of structured Continuing Professional Development (CPD) a year. For Chartered Tax Advisors, it’s 30 hours.

The TPB has stated that: “In 2018-19 we will undertake reviews of practitioners continuing professional education (CPE) records to ensure compliance with our CPE policy and their renewal requirement. These reviews will provide insights into how tax practitioners are maintaining their knowledge and skills relevant to the services they provide that help us develop targeted guidance and support.”

The Tax Institute requires members to undertake continuing professional development (CPD)

Up-to-date knowledge and skills are …

Why tax technical expertise is just a “ticket to the game”

Queensland State Chair and Partner at Deloitte Private, John Ioannou, CTA says that while tax technical expertise is crucial for success in tax, it doesn’t guarantee a “seat” at the game.
John was admitted as a solicitor in 2002 and is a Partner at Deloitte Private. He has experience in the areas of taxation, structuring, trusts and estate, succession and asset protection planning. He is currently Queensland’s representative on the Institute’s National Professional Development Committee, a member of Queensland’s State Council, and elected 2019 State Council Chair.
We caught up with him at the 34th National Convention in Hobart.
“Some of the insights I've taken away from the Convention, as always, is really the opportunity to see other people’s perspectives on issues that you come across in practice,” he says.
“When you've been in practice for a little while it's not often the case that something takes you by surprise, unless you're dealing with new law.
But I always enjo…

Recent developments in the tax residence of individuals, companies and trusts

Residency has been a hot topic with the Board of Taxation Consultation Guide on the review of the rules for the tax residence of individuals released in September 2018.

In addition, we have seen the full Federal Court decision in Harding’s case in February 2019 (the ATO are seeking leave to appeal to the High Court); as well as the issue of TR2018/5 and PCG 2018/9, concerning the tax residence of companies following the High Court decision in Bywater.

The guidance on the residence of companies also flows over into the residence of trusts.

In his recent paper, 'Recent developments in the tax residence of individuals, companies and trusts', Robert Gordon CTA, looked at:
The legislative provisions The cases interpreting those provisions over time, bearing in mind globalisation and the changes in work / travel patterns in more recent times The proposed changes to the legislation for residency of individuals The change in interpretation of the legislation for residency of companies…

Reversionary pension nominations and BDBNs

A member who has made a Binding Death Benefit Nomination (BDBN) who subsequently commences a pension with a reversionary nomination has effectively varied their BDBN, and the BDBN may be undermined.
Under the ATO’s view, set out in TR 2013/5, a member’s pension ceases for tax law purposes on their death unless an eligible dependant is automatically entitled to receive the pension as a reversionary beneficiary.

A nomination will broadly fail to satisfy the ATO’s strict standard of reversion if any element of discretion arises under the governing rules of the fund in relation to the death benefit.

This means, among other things, that the 12-month deferral in the timing of the credit to the recipient’s transfer balance account will not be available.

Naturally, a binding direction in relation to a member’s death benefits can be recorded in various ways.

For instance, nominations in relation to death benefit pensions are commonly recorded in pension commencement documents, reversionary p…

Protecting your clients’ rights to Legal Professional Privilege

Written by Sue Williamson

Sue Williamson is a legal partner with EY, specialising in tax controversy. She chairs the Tax Institute’s Dispute Resolution Committee.

Legal Professional Privilege (LPP) is a cornerstone legal right that is fundamental to the effective operation of the Australian legal system and the administration of justice (refer to Baker v Campbell (1983) 153 CLR 63, 60 (Gibbs CJ)). It is a right that is owned by the client, not the lawyer. As with all client rights, our role as the lawyer is to protect the right unless instructed otherwise. No adverse inference should be taken because a person refuses to hand over a document that is subject to LPP. No person should refuse to hand over a document claiming that it is subject to LPP unless they have positively determined that the document is subject to LPP.

The ATO has expressed concern that ‘reckless and false’ claims of LPP have been made by some tax professionals to avoid disclosure of documents during tax audits (refer t…

Eddy Moussa defines “critical” skills for success in tax

Eddy Moussa, CTA, on which skills are key for success and how membership has impacted on his career.

We caught up with Eddy at the 34th National Convention in Hobart. He is a Partner at PwC and is currently a member of our National Council.

“What I really like about tax and being a tax adviser is it involves problem solving, and it's a way of problem solving which is applying the law to business transactions,” he says.

“And in the place that I work, you need to do that in a team environment.

“So I get to work with great people solving interesting problems for clients.”

Tax as a body of law is massive

Eddy says that building technical knowledge and structured education is imperative for new practitioners.

“Ultimately, we're assisting clients manage their tax affairs and ensuring they're complying with the rules.

“And it's very hard to do that if you don't understand the rules yourself.

“Tax as a body of law is massive. Then, you can overlay ATO guidelines, tre…

Announced but un-enacted measures – everything old is new again

Written by Mark Molesworth

Mark Molesworth is a Partner in BDO’s Tax Division and Chair of the Tax Institute’s SME & Tax Practitioner Technical Committee. He also represents The Tax Institute at the ATO’s Private Groups Stewardship Group.

Announced but un-enacted measures – everything old is new again 

In last week’s TaxVine Tax Counsel Report, Tax Counsel Stephanie Caredes discussed the tax policies that the Coalition Government took to the recent election. This week I thought I would take a quick look at the measures that have been announced, but not enacted at the time that Parliament rose for the election.

Depending upon whether you lump together related measures or split them out, there are up to 107 announced measures that have not yet made it into law. Some were the subject of legislation that lapsed when the election was called, others haven’t been opened for consultation yet. The earliest proposed application date is 1 July 2001 (for a debt-equity integrity measure first anno…

Small Business CGT Concessions – The Good, The Bad and The Ugly

Much like the 1966 Clint Eastwood film, small business CGT concessions can often be Good, Bad or just damn right Ugly.

For clients selling their businesses, the small business CGT concessions can reduce their tax significantly or, in some cases, eliminate it altogether. Recently enacted integrity measures and increased ATO review activity make these concessions an area where extreme caution should be exercised.

Have you wrapped your head around the latest legislation?

Hoping to shed some light on the complex changes to the small business CGT concessions, which came into legislation in September 2018, we interviewed experts Neil Brydges, CTA, Sladen Legal, Adrian Zuccarini, Australian Taxation Office and Matthew Meng, Victorian Bar.

Navigating the Wild West of Small Business CGTs can be a difficult task - “this is a highly technical area” says Matthew, “practitioners really need to track through the detailed requirements in every case”.

Matthew, a practising Barrister, specialisin…

Tax Partner: invest early in your career

Geoff Stein, CTA, Partner at Brown Wright Stein Lawyers, shares why he values professional development events – including the recent Women in Tax Special Budget Edition Lunch in Sydney – why practitioners need to get on top of change and advice he’s followed from the early stages of his career. Geoff has worked as a lawyer in Sydney for over 20 years, specialising in commercial and tax law. He advises clients on tax, commercial, trust, estate planning, wealth management and ancillary legal issues. “Today was a great lunch for Women in Tax,” he says. “We really got down to some hard tax issues, and it was great to see that from not just a female perspective, but to talk about the general issues and to have female voices promoted.” Investing in your own community “The Tax Institute CPD events are fantastic, and I encourage all of our staff to attend as many as we can,” he says. “They are pitched at various different levels, and it means that there's usually something for everybody. “I'…