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.

Tax law partnerships and the Small Business Maximum Net Asset Value test

25th February 2016

Maximum Net Asset Value test (“MNAV”) calculations can be complicated, particularly where connected entities and affiliates are involved. In the case of connected entities, wher... read more

Utilising tax losses – An additional requirement for utilisation

28th January 2016

So you want to utilise a tax loss.  It’s as simple as satisfying the loss recoupment rules right? (e.g. for a company the Continuity of Ownership Test or Same Business Test) Wron... read more

Discretionary trust with foreign capital gains distributing to foreign residents

30th November 2015

Where a resident discretionary trust derives a foreign capital gain to which a foreign resident is made specifically entitled you could be forgiven for thinking that the capital gain may not be s... read more

SMSF investments in unit trusts – Control issues

20th October 2015

Assume two unrelated SMSF’s want to acquire an asset of reasonable value (such as a commercial property) together via a 50/50 geared unit trust structure. In such a situation, a key i... 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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