Client Alert for March 2013

No splitting of rental income for couple

Winery losses cannot offset other income

TIP: Under the tax law, an individual conducting a business (either alone or in a partnership) may offset losses from the business against income from other sources, such as wages, but only if certain tests are met. If the individual does not meet any of the tests, the individual may seek the Tax Commissioner's discretion to allow him or her to claim the loss. Note that there are exceptions for primary producers and artists under the rules. Please contact our office or the ATO if you have any questions.

Property developers denied GST margin scheme

TIP: The use of the margin scheme can provide a lower GST cost to the supplier than would normally be the case under the general GST rules. However, in addition to meeting various eligibility requirements, there must be an agreement in writing between the supplier and recipient that the margin scheme is to apply. Please contact our office or the ATO for further information.

Superannuation top-up brings on 93% tax

TIP: This case highlights the importance of managing the timing of all concessional contributions against an individual's contribution caps for each financial year.

As if this was not challenging enough, the concessional contributions cap has been frozen at $25,000 for 2012–2013 and 2013–2014, regardless of age. This unfortunately sets a trap for the unwary that could generate unexpected tax liabilities if contributions intended for June in a particular financial year are not "received" by the fund until July in the following financial year.

GST and residential premises

In-house fringe benefits – rule changes on the way

TIP: This proposed change means that employees will lose their ability to pay for in-house benefits with pre-tax salary without their employer incurring FBT.

However, it is essential to note that the concessional treatment of in-house benefits will be retained where the benefits are not provided via salary sacrifice. If you have any questions, please contact our office or the ATO.

Goods taken from private stock