Tax Bites

Tax Bites are regular, short communications containing a snapshot of various common tax issues of interest to professional advisers. Here are some of our previous Tax Bites. Should you wish to subscribe to receive Tax Bites via e-mail, please click on the "Subscribe to Tax Bites" button to the right.

Are you still incorporating companies in NSW or SA – If so please reconsider

17th December 2013

NSW and SA still levy share transfer duty on transfers of shares in unlisted companies incorporated / registered in those jurisdictions at the rate of 0.6%. Both States previously announced... read more

Unit trusts that carry on business – Terrible tax outcomes for all where SMSF investors involved

19th November 2013

Unrelated geared unit trusts (UGUT) are becoming more common as vehicles SMSF’s invest in. The advantages typically relate to the “flow-through” income tax treatment and t... read more

Forming a tax consolidated group on acquisition can offer flexibility on subsequent sale

15th October 2013

There can be many benefits of forming a tax consolidated group when acquiring a target company. One of the key benefits that most taxpayers consider is whether they will get a tax cost upli... read more

Top-hatting for long-term asset protection

20th August 2013

Many taxpayers carry on their businesses through companies. Those companies may hold valuable assets (including land, plant & equipment, goodwill, brand names etc) which are exposed to operat... read more
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About Tax Bites

Tax Bites are general in nature and are not a substitute for specific advice. They are the opinion of Tax Advisory Specialists, and the ATO or the Courts may take a different view. They are not updated for changes in the law or the interpretation of the law since publication.

 

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Latest Tax Bite

ATO’s Private Groups Justified Trust program

Tax Advisory Specialists recently attended a workshop with Deputy Commissioner Tim Dyce and Assistance Commissioner Gregory Dick on the ATO’s Private Groups Justified Trust program.
 
In broad terms, Justified Trust is an approach by the ATO to build and maintain community confidence that taxpayers are paying the right amount of tax.
 
The Justified Trust program is aimed towards large private groups, market leaders and groups of specific interest.  However, the principles of Justified Trust are also applied to medium sized and emerging private groups (including where net wealth is as little as $5 million).
 
So the ATO’s approach to Justified Trust will most likely apply in some way or another to your larger clients.
 
For justified trust to be established across a private group, the following four elements need to be met:
  1. Effective tax governance demonstrated;
  2. Risks flagged to market are not present or appropriately mitigated;
  3. Tax outcomes from new and significant transactions are explained; and
  4. Differences in accounting and tax results are explained.
Effective tax governance is a critical element.  It comprises the following principles:
  1. Accountable management & oversight;
  2. Recognise tax risks;
  3. Seek advice;
  4. Integrity in reporting;
  5. Professional and productive working relationship;
  6. Timely lodgement and payments; and
  7. Ethical and responsive behaviour.
It is worth thinking about how your private group clients would rate against the above criteria.
 
And if you need to seek specialist tax advice, remember we are here to help.

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