Tax Articles

Hybrid Mismatch Rules

Hybrid Mismatch Rules

The hybrid mismatch rules contained in Division 832 of the Income Tax Assessment Act 1997 (Cth) commenced effect in 2019. The rules are broadly designed to prevent taxpayers from exploiting...

read more
Bad Debt

Bad Debt

A bad debt refers to money owed to a person from a customer or debtor that cannot be recovered. The meanings of bad and debt are worth addressing in further detail as they inform the right of a...

read more
Private Ruling

Private Ruling

A private ruling is written advice from the Australian Taxation Office about the way taxation law may apply to a particular taxpayer arrangement (a scheme), including a proposed future arrangement....

read more
Land Tax

Land Tax

What is Queensland Land Tax? Land tax in Queensland is a state imposed tax assessed annually based on the freehold land possessed as of midnight on June 30 each year. Freehold land refers to land...

read more
Part IVA

Part IVA

Part IVA of the Income Tax Assessment Act of 1936 contains the income tax general anti-avoidance rule (GAAR). The GAAR operates alongside a number of other specific anti-avoidance rules contained in...

read more
Debt and Equity Rules

Debt and Equity Rules

What is debt funding and equity funding? There are broadly two major categories of funding available to a business: debt funding and equity funding.   From a basic legal point of view and in the...

read more
Everett Assignment

Everett Assignment

What is an assignment?   An assignment involves an entity or individual (the assignor) transferring contractual rights and benefits to another entity or individual (the assignee).   For example,...

read more

Hybrid Mismatch Rules

The hybrid mismatch rules contained in Division 832 of the Income Tax Assessment Act 1997 (Cth) commenced effect in 2019. The rules are broadly designed to prevent taxpayers from exploiting differences in the operation of the tax laws of 2 or more countries by way of...

Unpaid Present Entitlement (UPE)

The term present entitlement broadly refers to the right of a beneficiary to a share of trust income.   The present entitlement concept derives from trust law principles and is borrowed under by taxation laws as a way of determining who should be assessed on the...

Bad Debt

A bad debt refers to money owed to a person from a customer or debtor that cannot be recovered. The meanings of bad and debt are worth addressing in further detail as they inform the right of a taxpayer to claim a deduction under section 25-35 and 8-1 of the Income...

Private Ruling

A private ruling is written advice from the Australian Taxation Office about the way taxation law may apply to a particular taxpayer arrangement (a scheme), including a proposed future arrangement. The rules relating to private rulings are primarily contained in...

Land Tax

What is Queensland Land Tax? Land tax in Queensland is a state imposed tax assessed annually based on the freehold land possessed as of midnight on June 30 each year. Freehold land refers to land that is privately owned, excluding state owned land or land leased from...

Part IVA

Part IVA of the Income Tax Assessment Act of 1936 contains the income tax general anti-avoidance rule (GAAR). The GAAR operates alongside a number of other specific anti-avoidance rules contained in Australian tax law. The GAAR is subordinate to the operation of those...

Debt and Equity Rules

What is debt funding and equity funding? There are broadly two major categories of funding available to a business: debt funding and equity funding.   From a basic legal point of view and in the context of capital raising, debt funding refers an arrangement which...

Everett Assignment

What is an assignment?   An assignment involves an entity or individual (the assignor) transferring contractual rights and benefits to another entity or individual (the assignee).   For example, assume John enters into a contract with David. Under the contract, John...

Business Commencement and Closure Deductions

The most common way a taxpayer will be eligible for a deduction on business related expenditure is by satisfying the criteria of section 8-1 of the Income Tax Assessment Act 1997.   That provision provides that a taxpayer can deduct any loss or outgoing to the extent...

Taxable Australian Property

A foreign resident of Australia for tax purposes is generally only subject to Australian tax on Australian sourced income. However, when it comes to capital gains tax, a foreign (tax) resident will not recognise a capital gain or loss on a CGT event which occurs to a...

TOFA

What is TOFA?TOFA (Taxation of Financial Arrangements) is a tax framework that focuses on taxing the gains and losses from financial transactions based on their actual economic impact, rather than just their legal structure. In simpler terms, it ensures that the...

NANE Income

What is NANE income? Non assessable non exempt income (NANE) refers to specific types of income that are defined by tax laws or other Commonwealth legislation in Australia as being neither subject to tax (non assessable) nor exempt from tax. This classification has...

Exempt Income

What is exempt income?Exempt income means any amount of ordinary income or statutory income that is not subject to taxation due to specific provisions in the Income Tax Assessment Acts (Acts) or other Commonwealth laws.Exclusion of ordinary income from assessable...

Contractor vs Employee

An employee is an individual who works under the supervision of an employer as a representative of their business receiving in return wages or other remuneration. While an employee might have some freedom such as flexible hours, the employer has the right to manage...

Employee Share Scheme

What is an employee share scheme?An employee share scheme (ESS) is a scheme under which shares, stapled securities or rights to acquire such shares or securities in a company (known as ESS interests) are provided to an employee, a person in an employee like...

Intellectual Property

What is intellectual property?Intellectual property IP encompasses a range of intangible assets and rights held by a taxpayer. This includes rights held by a taxpayer as the owner or licensor of patents, registered designs, copyrights and so forth. The definition of...

Allocation of Professional Firm Profits

The distribution of profits made by professional firms to the controllers of a business and their associates may present tax complications. Professional firms here refers to professional practices such as accounting firms, architectural firms, engineering firms,...

Testamentary Trust

What is a testamentary trust?A testamentary trust is essentially a trust that is established through a person's last will and testament. Unlike discretionary or family trusts, which are typically created separately during an individual's lifetime through a trust deed,...

Hire Purchase Agreement

What is a hire purchase agreement?A hire purchase agreement commonly refers to a contractual arrangement whereby a person or entity (the lessee) acquires from another person or entity (the lessor), the right to use an asset and a subsequent right or obligation to...