Tax legislation and regulations change rapidly. It can be easy for busy professionals to miss an issue and/or run out of time to thoroughly research multiple tax headlines received.
Here you can access Tax News and Snapshots to quickly and efficiently assess how relevant recent key issues are for you.
A Tax Astute Snapshot is designed to provide a brief overview of a sometimes complex new tax issue in under 2 pages of text and/or a 3 to 4 minute recording. This allows busy professionals to quickly assess how important this issue is for them.
Of course Tax Astute clients receive the benefit of all of the practical issues, questions and answers and extensive further information behind the Snapshot in their Tax Astute training session and full reference notes.
On 8 February 2018, Treasury released Draft Legislation to implement a backdated Div.152 ITAA 1997 Small Business CGT Integrity Measure. The proposed measure was announced (in broad terms only) in the May 2017 Federal Budget and will impact the application of the Small Business CGT Concessions to CGT Events (e.g. sales) regarding shares or trust interests which occur on or after 1 July 2017.
On 7 February 2018, the Treasury Laws Amendment (2018 Measures No. 1) Bill 2018 was introduced into Federal Parliament to implement new requirements for residential property supplies made from 1 July 2018 (subject to some transitional rules), comprising:
(1) a GST withholding requirement for purchasers/recipients of taxable supplies of most new residential premises and potential residential land; and
(2) a supplier notification requirement for suppliers of all residential premises and potential residential land.
The Treasury Laws Amendment (Housing Tax Integrity) Act 2017 received Royal Assent on 30 November 2017, following a lengthy passage through Federal Parliament since its introduction in September 2017.
The new Act introduces various important Federal Budget measures regarding residential property including a new Commonwealth Foreign Person Vacancy Fee Regime which creates potentially substantial penalties for “foreign person” owners of Australian residential land (including various Australian tax resident entities) should they fail to comply with the new regime. “Foreign person” status is a particular risk for structures involving Australian tax resident discretionary trusts where the trust has even one potential beneficiary who is neither an Australian Citizen nor a Permanent Resident nor a Special Category Visa holder).
Under the new Act, various Australian tax resident structures which own residential property and are in fact “foreign persons” could face a minimum penalty of >$50,000 p.a. per property if they fail to lodge an ongoing annual Vacancy Fee Return with the ATO. Understanding potential “foreign person” status and its associated obligations under the new regime is therefore important.
The Treasury Laws Amendment (Housing Tax Integrity) Act 2017 received Royal Assent on 30 November 2017, following a lengthy passage through Federal Parliament since its introduction in September 2017. The new Act introduces the following important Federal Budget measures regarding residential property:
1. introduction of a Federal foreign person vacancy fee regime creating a risk of substantial penalties for “foreign person” owners of Australian residential land (including various Australian tax resident entities); and
2. removal of all travel deductions and some depreciation deductions for residential property investors from 1 July 2017 (unless a specific exception applies).
On 18 October 2017, the following related items were released regarding access to the lower 27.5% corporate tax rate:
(1) the Treasury Laws Amendment (Enterprise Tax Plan Base Rate Entities) Bill 2017;
(2) the ATO’s TR 2017/D7 “When does a company carry on a business within the meaning of s.23AA of the Income Tax Rates Act 1986”; and
(3) the Minister for Revenue and Financial Services’ Media Release “Passive Investment Companies Excluded from Lower Tax Rate”.
The above items represent the culmination of various, sometimes conflicting, ATO and Treasury announcements during the current calendar year regarding access to the lower 27.5% company tax rate, and finalises previous draft legislation that was released on 18 September 2017. This Tax Astute Snapshot explains the interaction between the above items and their likely practical effect when determining whether a company should apply the 27.5% or 30% corporate tax rate for tax payable and imputation/franking purposes.
On 21 July 2017, the Exposure Draft Housing Tax Integrity Bill 2017: Capital gains tax changes for foreign residents was released by Treasury to implement both of the following measures as announced in the 2017 Federal Budget:
(1) Complete removal of the Main Residence Exemption for taxpayers who are non-residents for income tax purposes at the time of their CGT Event (usually sale contract date)- generally where the CGT Event occurs from 1 July 2019 ; and
(2) Expansion of the Principal Asset Test for non-resident CGT Events regarding membership interests (e.g. shares or units) held in multi-tiered structures with potentially adverse implications for both CGT and the 12.5% asset withholding tax – with backdated effect from 7:30 pm AEST on 9 May 2017.