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Division 7A Explained

Division 7A Explained

One of the high risk areas of tax and one that the Australian Taxation Office is continuing to monitor, is Division 7A.  What is Division 7A you say?  We have summarised below some of the situations where Division 7A may apply to you and the tax consequences or these arrangements. Read more…

Client Alert for February 2014

Business sale earnout arrangements back in spotlight

The Coalition government has decided that it will proceed with a long-standing proposal to improve the current tax treatment of earnout arrangements.

Earnout arrangements are a common way of structuring the sale of a business. Under a standard earnout arrangement, business assets are sold for a lump sum plus a right to further payments that are contingent on the performance of the business for a specified period following the sale. Read more…

Data Integrity

Data integrity refers to maintaining and assuring the accuracy and consistency of data over its entire life-cycle. Wright Partners advises its clientele to regularly back up and ensure safe storage of their daily workings and file maintenance.

December 2013 BAS

If you haven't received your December quarter Activity Statement as yet, don't panic. The ATO inform us that there are currently delays in the dispatch. All Activity Statements will be issued by the end of January 2014, well before the 28/2/2014 due date.

HELP Voluntary Repayment Bonus

HELP voluntary repayment bonus: take advantage before 1 January 2014

The ATO reminds taxpayers that the Government has proposed to remove the 5 per cent HELP voluntary payment bonus which applies to payments of $500 or more from 1 January 2014 (subject to the passage of legislation). It says taxpayers who make a voluntary payment of $500 or more before 31 December 2013 will still receive the bonus. For taxpayers who want to take advantage of the discount before 31 December 2013, the ATO advises that they should allow sufficient time for their payments to be processed.

Client Alert for December 2013 - January 2014

Tax changes following carbon tax and mining tax repeal

The Abbott government has introduced into Parliament proposed legislation to repeal the carbon tax and the mining tax. Read more…

Small Business deductions

Last chance to access small business immediate deductions

Small businesses thinking of acquiring a depreciating asset costing less than $6,500 or a motor vehicle need to do so by 1 January 2014 before the concessions available for capital purchases are removed. This was one of the surprises to come from the release of draft legislation by the Government to repeal the minerals resource rent tax (MMRT) from 1 July 2014.  As part of the repeal, the Government will also unwind certain concessions that were intended to be funded by the MMRT.  For small businesses, the $6,500 instant asset write-off and upfront accelerated deductions for motor vehicle purchases are concessions that will no longer be available.  The Bill relating to the repeal of the MMRT was introduced into the House of Representatives on 13 November 2013. Read more…

Client Alert for November 2013

Residency requirement for CGT home exemption failed

The Administrative Appeals Tribunal (AAT) has denied an individual's claim that an exemption from capital gains tax (CGT) should apply to a property that he and his ex-de facto partner had sold. The individual had purchased land in 2002 with his then partner, and construction of a house on the land commenced in April 2004. However, the couple ended their relationship in September 2004.

Despite this, the individual argued that they had moved into the house in around May or June 2005 to meet the requirements under the law to sell the property without being subject to CGT. The AAT found that the evidence before it failed to establish that the house became the individual's main residence "as soon as practicable" after construction was completed, and failed to establish that the house continued to be his main residence for at least three months after that. In this case, both requirements had to be met in order for the exemption to apply.
Read more…

Client Alert for October 2013

Beware of artificial trust arrangements to avoid tax
The ATO has issued an alert to warn taxpayers that it is aware of arrangements where a discretionary trust is used to effectively funnel large capital gains to a newly incorporated company that is then wound up to avoid paying taxes.

The ATO says these arrangements concern situations where a trust has generated a small amount of income and a large capital gain during the year. The trust then distributes funds generated by the capital gain, tax free, to one beneficiary, while the newly incorporated company receives the tax liability, but does not have the funds to pay the tax. A liquidator is then appointed to wind up the company.
Read more…

Financial Advice Available

We are happy to announce that we can now offer our clients a full range of financial advice through our affiliation with Goldenwest Financial Solutions.

Garry Burton, proprietor and financial adviser, from Goldenwest Financial Solutions will be working out of our office each Monday afternoon offering a range of services which include:

  • Personal financial Management
  • Retirement Planning
  • Business and Personal Superannuation
  • Redundancy Packaging
  • Personal Insurance (Income Protection / Life & TPD)
  • Share Trading
  • Investment Management
Please ring our office to arrange an interview.
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