Tax treatment of capital gains

Tax alert: Distributions to non-resident beneficiaries

The ATO's recently released interpretation of the tax treatment of capital gains distributed by an Australian discretionary trust to non-resident beneficiaries will have a significant negative impact for some.

alertTwo new determinations released by the ATO deal with the complex and technical issues that arise when a resident discretionary trust makes a distribution of capital gains to non-resident beneficiaries. The ATO's view is that in some circumstances, non-resident beneficiaries can be taxed in Australia on gains relating to foreign assets, which would not have been taxed in Australia had they been made by the beneficiary directly.

The ATO's position will be counterintuitive for many as there is a Capital Gains Tax (CGT) exemption for non-resident taxpayers for assets that are not classified as taxable Australian property (TAP). This exemption means that in some circumstances, capital gains and losses are disregarded for non-residents.

The ATO's view is that this exemption does not apply to distributions from discretionary trusts even though beneficiaries of a trust are generally treated for tax purposes as if they had made capital gains personally. What this means is that if a resident discretionary trust makes a capital gain, then the ATO expects that this will be taxed in Australia, even if the gain is distributed to a non-resident beneficiary, even if the gain does not relate to TAP and even if the gain has a foreign source. Given that non-resident beneficiaries will be taxed at non-resident tax rates and may not have access to the full CGT discount, it will be important for trustees to consider this carefully when deciding on distributions for trusts that have a mixture of resident and non-resident beneficiaries.

The ATO's determinations do not take into account the possible application of any double tax agreements. This is another issue that would need to be considered to reach a conclusion on how distributions are likely to be taxed in the hands of non-resident beneficiaries.

At Collins Hume we offer a full range of taxation services and work in partnership with you to minimise your tax and help you achieve your key objectives. Call us in Ballina or Byron Bay on 02 6686 3000.

Our Kids Charity Golf Day 2019

It's that time of the year for the annual Our Kids Charity Golf Day

Last year the funds raised helped purchase a new Ultrasound Machine for the Women's Care Unit. 

Our Kids Charity Golf DayOver the past eleven years the Our Kids Charity Golf Days have been a great success and so far have been able to fund the purchase of over $165,000 worth of equipment for the Special Care Nursery.

This year's fundraising will help purchase a Giraffe Resuscitaire, an intensive care open crib to resuscitate newborn and babies. It provides open access for the paediatric medical team while resuscitating the sick little one. This equipment is to go in the ED at Lismore Base Hospital with an estimated cost of $19,200. 

This year, fundraising efforts will be combined with the Local Government Golf Day, run by Anthony McGarry from Lismore Workers Golf Club to make sure this equipment can be obtained as soon as possible.  Read more…

2019 Footy tipping results

We can call correct weight on the final results of the tipping comp 

I was expecting a Canberra-led High Court challenge on the Grand Final result, but it appears the result is final.

winnersAs we said at the start, rather than cash prizes this year our winners get the chance to make a difference and do some good by making donations to Buy 1 Give 1 (B1G1). Paid for by Collins Hume of course!

In the spirit of the Grand Final, I think it's fitting that we also donate another $50 for the tipper that finished 6th and 66th as 6 again seems to be a hot number in the NRL at the moment.

Congratulations to our winners:

  • brighton75 - First prize $300 worth of B1G1 Giving Impacts via B1G1
  • sstevol - Second prize $100 worth of B1G1 Giving impacts
  • Ronald1945 - Third prize $50 worth of B1G1 Giving impacts
  • RT88CH - Knockout Comp Winner $100 worth of B1G1 Giving impacts
  • Graeme D - 6th place $50 worth of B1G1 Giving impacts
  • Mightyeagles - 66th place $50 worth of B1G1 Giving impacts

Lastly – a huge thanks to the 110 brave souls who entered this year, another year of banter and fun!

Jamie Doyle aka SSTID (Managing Partner)

Super Guarantee Amnesty Resurrected

The Government has resurrected the Superannuation Guarantee (SG) amnesty 

This gives employers that have fallen behind with their SG obligations the ability to "self-correct." 

superannuationThis time however, the incentive of the amnesty is strengthened by harsh penalties for those that fail to take action.

Originally announced in May 2018 and running between 24 May 2018 until 23 May 2019, the amnesty failed to secure its passage through Parliament after facing a backlash from those that believed the amnesty was too lenient on recalcitrant employers.

Since the original announcement, the Government reports that over 7,000 employers have come forward to voluntarily disclose historical unpaid super. The SG tax gap is estimated at around $2.85 billion in late or missing SG payments. 

Read more…

Collins Hume named NSW Northern Rivers Business Awards Finalists

2019 Northern Rivers Regional Business Awards Finalists

The NSW Business Chamber has announced its finalists for the 2019 Northern Rivers Regional Business Awards.

regional finalistsCollins Hume is thrilled to have been shortlisted as finalists in three Northern Rivers categories – Outstanding Employer of Choice, Outstanding Business Leader and Excellence in Business.

"Collins Hume is one of our region's high performing financial advice businesses, offering a range of services in business, financial, tax and accounting consultancy," said Partner Peter Fowler. "With offices in Ballina and Byron Bay, it's high praise to be recognised for our ongoing endeavour with our clients and our team in the Northern Rivers region."

Being Small Business Month, the awards make time to celebrate the success of small businesses and the role we play in our communities.

The Employer of Choice award recognises businesses with strategies and initiatives that create stimulating and supportive workplace environments that positively impact employees and the organisation as a whole.

Read more…

Collins Hume
is a CPA Business