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.

CGT roll-over relief can destroy small business CGT concessions

17th July 2013

Often taxpayers access the scrip for scrip roll-over relief when selling their company to a purchaser for an issue of shares. Whilst no CGT should be payable, you may have lost yo... read more

Tax savings from outbound "transparent" structures

18th June 2013

The traditional outbound structure of an Australian holding company owning a foreign subsidiary is appropriate in a lot of circumstances. But consider using a "transparent" struct... read more

Trust resolutions - The importance of purpose

13th May 2013

It's that time of year when advisers are starting to think about what their client's trust resolutions should say to ensure tax-efficient trust distributions. And it's getting m... read more

SMSF non-arm’s length income rules and unit trust structures

15th April 2013

Ungeared and / or unrelated unit trust structures held by SMSFs can allow more things to be done in the concessionally taxed SMSF environment – fantastic! But, you need to ensure the ... 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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