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.

At call loans – Non-deductibility of interest and increased tax liabilities from deemed debt forgiveness

19th March 2013

At call loans from shareholders to a related company are common in the SME environment. Where interest is charged, the interest rate may be below 75% of an arm’s length rate (given th... read more

Non-commercial loss rules and salary sacrificed expenses

18th February 2013

Some taxpayers are salary sacrificing “otherwise deductible” expenses in an attempt to get under the $250,000 non-commercial loss rules’ income requirement test. This stra... read more

Liquidation and Tax Consolidation liabilities

29th January 2013

Insolvency practitioners are rightly concerned about personal liability arising from being appointed as liquidator. If you are appointed as the liquidator of a company that is a member of a... read more

Property acquisition with a syndicate of investors

21st January 2013

Acquiring property in a Self-Managed Super Fund (SMSF) can be great from a tax perspective.  But what if you are investing with a syndicate of investors and the use of a SMSF isn't viabl... 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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