Trust asset ownership

Who owns the assets of a trust?

It's not uncommon for people to put assets such as their family home into a trust, particularly professionals working in litigious fields or family groups wanting to protect assets. 

trustA recent case highlights some of the tax problems that can occur.

The taxpayer in this case had become the owner of their main residence as a result of a Family Court order. At that time, they caused the property to be held in the name of a trust (with a corporate trustee of which the taxpayer was a director).

4 years later when the property was sold, the taxpayer sought to access the main residence exemption to exempt the property from capital gains tax (CGT). After all, it was their main residence. 

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Single touch payroll exemption

Single touch payroll exemption for directors and family members

The ATO has provided a concession from single touch payroll for payments by small employers to closely held payees.

payroll wages salarySingle touch payroll (STP) was extended to cover all employers on 1 July 2019. For directors of their own company or for family businesses employing family members, there are some practical problems with STP - sometimes they don't know exactly what their salary or wages are for the year until just after the end of the financial year. STP however demands that payments are reported to the ATO in real time.

A new concession allows payments made by small employers with 19 or less employees to closely held payees, such as directors and family members, to be exempt from STP until 1 July 2020. Payments to arm's length employees will need to be reported using STP.

FBT and taxi travel

ATO advice re employee travel

Employers must pay fringe benefits tax (FBT) on certain benefits they provide to their employees in respect of employment. 

employee travelHowever, some benefits are exempt from FBT or receive concessional treatment.

Taxi travel by an employee is an exempt benefit if the travel is a single trip beginning or ending at the employee's place of work.

Taxi travel can also be an exempt benefit if it is a result of sickness or injury and the whole or part of the journey is directly between:

  • the employee's place of work
  • the employee's place of residence
  • any other place that it is necessary, or appropriate, for the employee to go as a result of the sickness or injury.

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Super, insurance and exit fees

Super, insurance and exit fees: The 1 July changes

From 1 July 2019, new laws prevent superannuation providers from eroding member balances with unwanted or unnecessary insurance and exit fees. 

JulyPlus, inactive accounts with low balances will be moved to the ATO to try and unite the unclaimed super with its owner.

These changes do not apply to self-managed superannuation funds or small APRA funds.

Insurance inside your fund
Up until 30 June 2019, superannuation providers were required to provide members with appropriate life and total and permanent disability (TPD) insurance inside superannuation on an 'opt out' basis. That is, the insurance was automatically put into place when you became a member of the fund.

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Tax Office targeting

How to Prepare for a Tax Office Visit

The Tax Office is actively targeting geographic areas for special visits as part of a nationwide crackdown on the black economy.

cash paymentsA consistent theme this tax time is overclaiming and under reporting. With the Australian Taxation Office (ATO) getting more and more sophisticated in its data matching approaches, taxpayers can expect greater scrutiny where their claims are more than what is expected. We take a look at the key issues for you, your business and your SMSF.

This financial year, the ATO has visited 22 regions with another four in progress. Next financial year they plan on visiting over 10,000 businesses.

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