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.

A benefit of death – but don’t rush for it

16th August 2016

Where an individual that owns all the shares in a company dies, and those shares are pre-CGT shares, then the beneficiary that inherits those shares should obtain a market value cost base in the ... read more

SMSF investors in unit trusts no longer to result in terrible tax outcomes

31st May 2016

In November 2013 I wrote a Tax Bite regarding unit trusts that carry on a business (trading unit trusts) and the terrible tax outcomes that can arise where the unit trusts were owned 20% or more ... read more

Marriage breakdown – Double taxation re transfer of CGT asset with underlying gain from company

27th April 2016

Where a CGT asset of a company is transferred to a former spouse as part of matrimonial property settlement, the Commissioner’s view is that this is either an actual or deemed dividend (dep... read more

Exemption for foreign equity distributions might be broader than you think

22nd March 2016

An exemption is available for dividends from foreign companies made to Australian resident companies. One of the requirements for the exemption is that the Australian recipient has at least... 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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