Client Alert for July 2013

Medicare levy increase to fund DisabilityCare Australia

Closing the "dividend washing" loophole

ATO taskforce to target trust structures

Superannuation income stream following death of member

Delivery drivers were common law employees

Losses from farming activities to be deferred

TIP: There are rules in the tax law designed to prevent losses from a non-commercial business activity from being offset against income from other sources, unless the activity satisfies one of the commerciality tests, or the Commissioner exercises his discretion to not apply the non-commercial loss rules. However, there are strict requirements surrounding the exercise of this discretion. Note that there are specific exemptions from the non-commercial loss rules for low income primary producers and professional artists.

Also, since 1 July 2009, losses incurred by individuals with an adjusted taxable income of $250,000 or more from non-commercial business activities have been quarantined, even if they satisfy the relevant commerciality tests. The effect is that these individuals are not able to offset excess deductions from non-commercial business activities against their salary, wages or other income. Please call our office for further information.

Superannuation redeposit during GFC results in tax hit

TIP: Managing an individual's contributions caps for any year is a critical consideration to ensure that any tax benefits of superannuation contributions are not later reversed (and punished) via the imposition of excess contributions tax.

Given the constant tinkering with the contributions caps, extreme care is needed with the amount and precise timing of contributions.