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.

Marriage breakdown – Who controls the franking credits?

19th August 2014

Sometimes in marriage breakdowns certain assets owned by family companies are transferred to one of the spouses under a property settlement agreement (for family law purposes). Typically, s... read more

Research and development costs - What happens when the tax offset is not available?

22nd July 2014

Where a company incurs costs on eligible research and development (“R&D”) activities, it may be entitled to a tax offset. However, the R&D tax offset may not be availabl... read more

Minimising interest withholding tax for international inbound investors

24th June 2014

International inbound investors may fund their Australian subsidiary operations partly by way of debt and interest withholding tax should apply on the interest payments in most cases. But n... read more

Small Business CGT concessions and disposals of intellectual property

20th May 2014

The Small Business CGT concessions apply to some, but not all, disposals of intellectual property (“IP”) held by a company. The concessions can apply to disposals of IP that are... 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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