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.

Taxation disputes with the ATO – AAT vs the Federal Court

7th September 2017

So you have a taxation dispute with the ATO.  You may have received the ATO’s initial decision and also their subsequent objection decision.  If you still have a genuine taxation ... read more

Employee Share Scheme rules can apply to transfers of shares and not just issues of shares

15th November 2016

The Employee Share Scheme (ESS) rules apply where an employee acquires an ESS interest at a discount under an employee share scheme. In this regard, an ESS interest is broadly a beneficial ... read more

Pre-CGT assets of a company that are deemed post-CGT assets and liquidator’s distributions

25th October 2016

A liquidator can distribute capital gains from pre-CGT assets as returns of capital instead of as deemed dividends. This can result in preferred taxation treatment either as a result of the... read more

Small Business CGT concessions and “cleaning up” different classes of shares

20th September 2016

In order to access Small Business CGT concessions on the sale of shares in a company or unit trust (or for the company or unit trust to access the 15-year exemption), there needs to be a “s... 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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