Relevant For: Business owners dealing with private company loans, who need to ensure compliance with tax laws to avoid costly mistakes. Key Points: Division 7A treats loans from private companies to shareholders/associates as dividends unless conditions are met. Loans must be repaid by the lodgement day or meet specific conditions to avoid dividend classification. Complying […]
This month for you we have the following Insights & Updates: Business Improvement Insights Navigating the 5 Stages of Growth to Maximise Business Value Business Growth Diagnostic Tax Updates Revised stage 3 tax cuts now law Refresher on deductibility of self-education expenses ATO scrutinising novated leases Paying super on expanded government paid parental leave Small […]
The ATO has been trying to crackdown on the use of trusts for many years and has recently released the following draft ruling, guideline and taxpayer alert relating to trust distributions that have associated reimbursement agreements: Draft Taxation Ruling (TR 2022/D1) – this deals with the ATO’s views on when section 100A will apply; Draft Practical Compliance Guideline […]
A recent Federal Court tax case is a sobering reminder you and your spouse cannot take asset protection for granted. In the Commissioner of Taxation v Bosanac [2021] FCAFC 158, the court made a judgment against the taxpayer for unpaid taxes. It established that a $4.5 million property acquired in the name of one spouse (despite being […]
The expansion of Single Touch Payroll (STP2 / STP Phase 2), significantly increases the amount of payroll information that needs to be reported to the ATO. It is hoped that this additional reporting will assist in ensuring employees are paid correctly as well as reducing the need for employers to report information about employees to […]
A recent ‘Exit Story’ Panel Discussion was held at Perth-based co-working space Flux. The panel participants were Glen McIvor of Solv, Stephen Langsford of TyreConnect, Olivia Humphrey of Kanopy, and Doug Fitch of Agworld. The interviewer was Derek Gerrard of Purpose Ventures. Here are a few of the key points The time between startup and […]
The concept of “negative gearing” essentially means that your property makes a tax loss from renting. As a result, the ATO may effectively pay for some of the rental costs due to an increase in your tax refund (or reduction in your tax liability). Why would anyone want to be negatively geared? There are two main reasons: […]
There are generous tax incentives currently available which are designed to attract and encourage investment into early-stage Australian companies (i.e. Startups & ScaleUps). The Government has announced it will review these tax incentives. These tax incentives include: The Early Stage Innovation Company (ESIC) Tax Offset, which is a non-refundable carry forward tax offset equal to […]
One of the big ones when it comes to Division 7A Mess Ups is underpayment or nonpayment of interest. Failure to satisfy the conditions of a complying Division 7A loan or a subtrust investment arrangement is considered a breach. Underpayment or nonpayment of interest is such a breach. Underpayment can occur by using the wrong […]
Division 7A has all sorts of ways of being triggered and one of the ways is the private use of property and luxury goods. Broadly, the simple scenario is where a company owns a house, car or boat and a family member uses that house, car or boat for private use without paying a market […]
Over the last decade accountants on behalf of their clients have had to deal with the UPE issue. When a trust makes a company entitled to income but does not actually transfer the money to the company to clear out the entitlement, this is called an “unpaid present entitlement” (UPE). If a UPE persists then […]
As a brief preamble, a loan a company made to shareholders or associates before 4 December 1997 (“pre-97 Loan”) and an unpaid present entitlement from a trust to a company made before 16 December 2009 (“pre-09 UPE”) are typically ‘quarantined’ from the ATO’s Division 7A compliance action. In simple terms, if your company has either […]
In recent months we’ve had several people approach us for help with Division 7A due to errors made by their previous accountant. As specialists in Division 7A and WA’s GO-TO in fixing disastrous Division 7A errors, we thought it prudent to publish this series on some of the most common Division 7A Mess Ups. Part […]
What is the downsizer contribution? Since 1 July 2018 it is possible for eligible persons aged 65 or older to make a special “downsizer contribution” into their superannuation fund of up to $300,000! If you are selling a home that you have owned for 10 years or more, then you should consider contributing some of […]
The vast majority of my career of 40 plus years, has been spent in professional services firms. I wouldn’t have had it any other way, because the notion of service is very important, but there have been times when I was tempted to leave the professional life behind, because much of what goes into a […]
AN IMPORTANT MESSAGE TO ALL EMPLOYERS Single Touch Payroll (“STP”) is a new compliance obligation for employers regarding the transmission of payroll information to the ATO (employee name, TFN, wages, tax and super). To satisfy the Single Touch Payroll obligations, employers will either use their own payroll software or engage a third party (e.g. accountant) to […]
Recently I had the pleasure of attending the ASNAF conference in Goa, India. ASNAF is an alliance of accounting firms in various countries across Asia and Australasia; and Munro’s is the only firm in the alliance from Western Australia. Through the ASNAF alliance, Munro’s leverages the local expertise of member firms from countries in Asia […]
Starting a small business usually means taking some financial risks, and for a while, some financial hits. Apart from the initial investment, there may be inefficiencies or errors made during the crucial startup days. According to Dun & Bradstreet, 90% of the small business failures are caused by poor cash flow. For small businesses, the […]
The content in this article is provided for general information purposes and is not tax, legal, investment or other professional advice. Readers should seek appropriate professional advice prior to making any decision. As explained on our Mining page, there are a number of factors to consider in determining the taxation treatment of cryptocurrency mining and forging. This […]
The content in this article is provided for general information purposes and is not tax, legal, investment or other professional advice. Readers should seek appropriate professional advice prior to making any decision. More and more these days Australians have cryptocurrency and are looking at ways to spend it. Some businesses are seeing this as a […]
The content in this article is provided for general information purposes and is not tax, legal, investment or other professional advice. Readers should seek appropriate professional advice prior to making any decision. Some Australians have begun to receive cryptocurrency as part of their salary. This is relatively common for those who have found employment in […]
The content in this article is provided for general information purposes and is not tax, legal, investment or other professional advice. Readers should seek appropriate professional advice prior to making any decision. What happens if a business pays an employee’s salary using cryptocurrency? This is a question likely to come up more and more as […]
The content in this article is provided for general information purposes and is not tax, legal, investment or other professional advice. Readers should seek appropriate professional advice prior to making any decision. Every year Australians save thousands of dollars in tax by investing through superannuation fund accounts. How? Because earnings made within superannuation benefit from […]
The content in this article is provided for general information purposes and is not tax, legal, investment or other professional advice. Readers should seek appropriate professional advice prior to making any decision. You’ve done everything you can to make sure your loved ones know how to access your cryptocurrency when you die. But what about […]
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