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Unpaid Present Entitlements

A draft ruling was issued in December 2009 by the Commissioner of Taxation dealing specifically with unpaid present entitlements to companies. The ruling seeks to apply the existing Division 7A rules to amounts of income distributed by trusts to Corporate Beneficiaries that are not subsequently paid. In effect, any amounts not paid to the Company and not subject to a loan agreement meeting the requirements of Division 7A, would be treated as a deemed dividend.

This draft ruling is open for comment from interested parties until February of this year. As the ruling represents a significant change in the way in which these rules are applied in practice the industry bodies are to submit a combined response to the ruling. Once a final ruling has been issued, we will advise further on the impact this may have on your existing circumstances. In the meantime, it is relevant to consider alternative taxation strategies for the 2010 and future years where a Corporate beneficiary has been utilised in the past if the Trust does not have sufficient income to make the required repayments or to transfer the entitlements in full.

Listing alphabetically

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List by latest edition

↓Are Self Managed Super Funds really that super?

This article looks at the the pros and cons of establishing a Self Managed Super Fund (SMSF)

↓ATO focus on 2007 Tax Returns

The Tax Office has advised that it will be paying particular attention to the following in 2006/07:

↓Cash flow - the key to sucess

In reality, cash flow is the key to survival.

Australian Securities & Investments Commission statistics tell us that in 2004 and 2005 there was an average of 18,000 businesses that entered into external administration or insolvency. Furthermore, the Small Business Development Corporation statistics tell us that 60% of small businesses fail in the first three years of operation.

↓Change to calculation of super guarantee from 1 July

The Tax Office is reminding employers that from 1 July 2008 ordinary time earnings (OTE), as defined in the super guarantee law, must be used to calculate super contributions for their employees.

↓Change we can believe in?

What are the implications for investors after the election of Barack Obama?

↓Changes to the CGT concessions for small business – 2006/07 year

If a small business taxpayer disposes of a business, including goodwill, and is able to use the small business CGT concessions, it can potentially reduce the capital gain to nil!

↓Child Care Benefit and Child Care Tax Rebate from 1 July

There has been some significant changes to the Child Care Benefit and Child Care Tax Rebate

↓Christmas Parties and Fringe Benefits Tax

While staff Christmas parties can attract fringe benefits tax there may be exemptions available depending on the venue and cost per employee.

↓Claiming Rental Expenses

The ATO has taken a “prevention is better than a cure” approach to ensuring that taxpayers who own a rental property are aware of the allowable rental property deductions. Recently the ATO has targeted a number of rental property owners in a bid to ensure that the rules regarding deductibility of interest, repairs and maintenance, borrowing expenses and capital works deductions are understood.

↓Coping with redundancy

The last decade has been good for job seekers. Unemployment has been low, and companies have been crying out for good staff. The resources boom continues to shield Australia from some of the problems being experienced in other countries, but parts of our economy are starting to show signs of weakness in the face of higher interest rates and petrol prices.

↓Coping With Volatility

What a Year!
The Australian share market gave investors a bumpy ride last year. At the start of 2007 the All Ordinaries index was at 5,650. It climbed 14.3% by July, plummeted 12.2% over the following month, then put on a massive 20.9% to hit an all-time-high of 6,854 on November 1st. It closed the year at 6,421 before a miserable start to 2008.

↓Current times and the Great Depression

A comparison of conditions today with what happened in the Great Depression.

↓Delegate or Die!

There is not a single management skill more critical to your personal and professional success as an entrepreneur than learning to delegate. But delegating successfully is much more than simply handing out assignments.

↓Energy Audits to save you money

In the current economic climate reducing your direct costs has never been more important.

With the impact of the Global Financial Crisis and increasing energy prices it makes sound financial sense to conduct an analysis of your energy expenditure. Our alliance partner Carbon Planet can conduct an Energy Audit of your operations to identify where cost savings could be achieved.

↓Fixed interest – demystifying the jargon

With stock market volatility there has been an increased interest in fixed interest investing. Do you understand what terms like yield curve or coupon mean ?

↓Frozen mortgage trusts

Why have mortgage trusts frozen redemptions?

↓Greenwashing

Now that the corporate world has woken up to the fact that going green is good for business, it’s no surprise that the rush is on for brands to establish themselves as the greenest choice.

↓Henry Review

Dr Henry delivered his report on the tax system to Treasurer Wayne Swan in December 2009. Mr Swan has indicated that he will release the report before the May budget. As a result, the commentary below is merely speculation based on information reported in the press which has not been confirmed by government. Once the report is made public, we will provide a full in-depth analysis of the implications should any of the measures be adopted by the government.

↓IMPORTANT DEVELOPMENT REGARDING THE TAXATION OF TRUSTS

Early last year the Full Federal Court handed down what could be a ‘landmark’ decision regarding the taxation of the beneficiaries of trusts.

↓Investing after Garnaut

The recently released Garnaut Climate Change Review follows in the footsteps of the Stern Review, and emphasises that the costs of preventing climate change will be far less than the costs of adapting to it.

↓Is it time to gear?

Many investors will be looking at the current fundamentals of investment markets and asking themselves, “Is now the time to gear?”

↓Is Self Managed Super Right for you?

Your super is your investment for your retirement. A self managed superannuation fund (SMSF) is great for some people but they don't suit everyone. We are please to provide you with four key questions from the Australian Securities and Investments Commission (ASIC) and the Tax Office could help you decide whether self managed super is the right decision for you.

↓Life Under Labor

During last year’s election campaign, Labor strived to reassure the electorate that, in government, it would maintain the same general approach to economic policy that we have experienced over the last 11 years. It was a key part in the new government’s electoral success.

↓Location! Location! Location!

For sale: well presented 3 BR family home. Convenient location just 45 km from CBD and 10 km from adequate public transport. Four car garage.

A desirable residence? If petrol was under $1 a litre, and with a car space for mum, dad and each of the kids, it might be very desirable. However, as petrol closes in on $2 a litre, it’s a different story.

↓Managing employees working from home

We are pleased to be able to provide a summary of some of the key management issues that need to be considered when offering staff the opportunity to work from home or off site.

↓Moving forward on reverse mortgages

The Australian Bureau of Statistics (ABS) estimates that between 1999 and 2031, the population aged 60 years and over will double. According to recent data, over 2.6 million Australians, or 13% of the population, are over the age of 65, as the 'baby boom' cohorts move into retirement.

If you have purchased an investment property, ensuring that you use every available concession can make a significant difference to your bottom line....|READMORE|

↓New Workplace Relations Laws - Things You Must Know

From 1 January 2010 there are several important changes in Australia’s workplace laws that affect all employers and employees in the national workplace relations system. The changes include the introduction of new National Employment Standards (NES), many employers in New South Wales, Queensland, Tasmania and South Australia moving into the national system, and the commencement of modern awards. Employers and employees need to be prepared for these changes.

↓Outlook for 2008

2008 could be one of those years when emotion overrules reason as the most powerful influence on the economy. The crisis in confidence owes its origins to the sub-prime crisis in the US. The resulting housing slump and lower consumer confidence sparked fears of a US recession, with many people worrying that this could spread beyond US shores.

↓Powers of Attorney

An important component of any financial plan.

↓Private Ancillary Funds

Private Ancillary Fund (PAF) is the new term for what was previously known as a Prescribed Private Fund (PPF).

↓Problems with car fringe benefit records

The Tax Office has warned that some employers are using inaccurate methods in dealing with the FBT obligations resulting from providing car benefits to their employees.

↓R & D Concession Reform

A recent consultation paper released by Treasury designed to provide information about the new R & D tax concession has highlighted the nature of the changes that will apply when the new legislation commences from 1 July 2010.

↓Rational behaviour?

Economics is a bit of a mixed bag. Part science, part psychology and, many of us might suspect, a fair bit of guesswork as well. Economists do a great job of telling us what has happened and why, but their predictions of the future often fall wide of reality.

↓Recontribution vs. Anti-Detriment

With the government implementing Simple Super legislation on 1 July 2007, many strategies have been compiled regarding recontributing into your superannuation fund with the result of avoiding the 16.5% tax on death benefits. However this may not always be beneficial as paying no tax may result in no anti-detriment payment being received.

↓Reduction In Regulatory Burden Facing Australian Companies

The package of reforms contained in the Corporations Amendment (Corporate Reporting Reform) Act 2010 and accompanying Regulations, will deliver much needed relief from red tape for Australian Companies and implement a number of other important refinements to Australia's corporate regulatory framework.

↓Simple strategies to minimise tax on superannuation death benefits

The popularity of superannuation as a low-tax environment within which to grow wealth, coupled with longer life expectancies, will result in an increasing number of financially independent people receiving a superannuation death benefit from a parent.

↓Small Business Superannuation Clearing House

A Small Business Superannuation Clearing House has been implemented by the Australian Government that aims to reduce the burden of costs for small business associated with meeting their super guarantee obligations. This facility allows them to pay their employee superannuation contributions to a single location. This is a free facility and is suitable for employers with less than 20 employees.

↓SMSFs now No 1 in Superannuation

In September 2008 the ATO released its long awaited SMSF statistics for the June 2008 income year. They proved that the SMSF industry is leading the way and is beginning to overpower all other forms of superannuation including retail superannuation funds, industry based superannuation funds and public sector superannuation.

↓Some Common Mistakes made by Investors

There has been a lot of discussion in the media recently on the lack of retirement savings of many working Australians. Whether its your superannuation or other investments, mistakes along the way can lead to significant reductions in the returns your receive from your investments. This article looks at some common mistakes that can have an impact of your long term investment returns.

↓Super contributions - too much super can mean extra tax

Do you know that your superannuation contribution could be subject to additional tax if it is above the cap ?

↓Super remains a super option for your financial future

While it’s never too late to start creating the financial future you dream of, it’s always better to start as early as possible because small amounts added to your superannuation when you are young can make a big difference to the size of your savings pool upon retirement.

↓Superannuation Contribution and Payment Limits 2010/2011

These are the key rates and threshholds that apply in relation to superannuation contribution and benefit payments for the 2010/2011 financial year.

↓Take care with lower interest rates

People desperate for an easing in interest rates had their wish granted when the Reserve Bank unexpectedly cut interest rates by 1%, but not for reasons we can cheer about.

↓Tax benefits with insurance

Building a financial plan without adequate insurance is like building a house on flimsy foundations. Comprehensive insurance cover can be a significant expense. However, the out of pocket cost of insurance can be reduced by taking advantage of the tax deductions that apply to specific types of insurance, and to some methods of implementing insurance.

↓Tax tips for small business

The Tax Office has some useful tips and information to help businesses start the new year on the right foot.

There are some important things all small businesses need to remember, including good record keeping practices, meeting GST obligations, reporting, paying tax and superannuation.

↓Using trusts to manage family wealth

A trust can benefit the creation and preservation of family wealth

↓Will this year be different?

The holidays are over but will 2008 be different financially for you? You can be sure that if you do what you did in 2007, this year will be much the same. Here are ten tips so that next Christmas you can look back with pride at your accomplishments.

↓Winners and Losers with Higher Interest Rates

Reading the newspapers, it seems that everyone hates higher interest rates. There’s good reason for that. Higher interest rates are supposed to reduce our spending power. But it’s a bit like medicine – a bitter taste now to make us feel better in the future.

↓‘Lifestyle assets’ owned by companies

Recent Government announcements bring under the spotlight the issue of private companies which own so-called ‘life-style’ assets, for example cars, boats and real estate.

The contents of this Bulletin are general in nature. We therefore accept no responsibility to persons acting on the information herein without first consulting us.