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.

Small Business CGT concessions integrity measures

3rd October 2018

The Small Business CGT concessions integrity measures received royal assent on 3 October 2018 after a welcome amendment from the Senate in which the start date was changed from 1 July 2017 to 8 Febr... read more

Board of Taxation review of Small Business tax concessions

17th May 2018

The Board of Taxation is conducting a review of Australia’s Small Business tax concessions.  This includes the Small Business CGT concessions.  The Board’s review will involve ... read more

Draft legislation introduced re Small Business CGT concession integrity measures

9th April 2018

The Government has introduced draft legislation into Parliament (Treasury Laws Amendment (Tax Integrity and Other Measures) Bill 2018) in relation to proposed amendments to the Small Business CGT co... read more

Redemption of redeemable preference shares out of profits

14th November 2017

Capital reductions can sometimes occur via the redemption of redeemable preference shares under Part 2H.2 of the Corporations Act 2001. A redemption should give rise to CGT event C2 (cancel... 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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