Division 7A is part of the Income Tax Assessment Act 1936 and is intended to prevent profits or assets being provided to shareholders or their associates tax free. The operation of Division 7A A payment or other benefit provided by a private company to a shareholder (or their associate) can be treated by the ATO...

Tax Planning 2017 How important is it to you to know what your tax bill will be before its due, and how you can minimise it? We suggest that a review of your tax situation is advisable.  This will ensure you can take advantage of any opportunities to minimise tax and adequately plan for any tax...

The provision of cars by employers to employees remains an issue that continues to create confusion for some business taxpayers. A not-uncommon situation is where the employer fails to identify that a car fringe benefit has been provided. This is typically found in family companies or trusts where a car bought by the business is...

A not-uncommon conundrum for many SMSF trustees is what to do when the fund is found to have breached the in-house asset rules. There are also some common misconceptions about these regulations that keep resurfacing. What does the ATO say in relation to the in-house asset rules? Recent ATO statistics on the SMSF sector show...

Salary sacrifice can be a great way to get a part of your remuneration in a form other than cash – and not personally pay tax on it. Salary sacrifice (or salary packaging) is where you agree to take part of your wage as a benefit of some kind, equal in value to the salary...

Mum and dad investors in receipt of dividends from their share portfolio often benefit from investing in blue chip shares because they usually have franking credits attached. As a general rule, an Australian resident shareholder is assessed for tax on dividends received plus any franking credits attached to those dividends. The shareholder is assessed on...

The concept of a “sharing economy” has been around for long enough now to have had a very real impact on how we transact.  Think Uber, think Airbnb. By now, most people will have realised that the “sharing” part of the concept does not refer to an absence of any monetary exchange, but rather to...

The ATO has issued guidance on making claims for mobile phone use as well as home phone and internet expenses. Substantiation for mobile, home phone and internet costs It says that if a taxpayer uses any of these for work purposes, they may be able to claim a deduction if there are records to support...

One investment option that has surfaced relatively recently, and that SMSF trustees may consider as a part of their strategy to grow their fund, is investing through peer-to-peer lending. Peer-to-peer lending involves an investor – a trustee of the SMSF in the current case – providing funds to an online lending platform. This platform, which...

From January 1, 2017, the assets test free area and taper rate for pensions increased. The assets test works by reducing a person’s age pension payment for every dollar of assets owned over a certain value. The test takes into account most assets, including any property (except your primary home) or possessions owned, or partly...