Tax Articles

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...

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Bucket Company

Bucket Company

Contents What is a Bucket Company?  How Does a Bucket Company Work?  Tax Efficiency Through Trust Profits  Base Rate Entity  How to Set Up a Bucket Company?  Determining Share Ownership for the...

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Base Rate Entity

Base Rate Entity

What is a Base Rate Entity?  Base rate entities are subject to a reduced tax rate of 25%. This rate represents a 5% reduction compared to the standard company tax rate of 30%.  To qualify as a base...

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Debt and Equity Rules

Debt and Equity Rules

Contents What is debt funding and equity funding? The taxation of debt arrangements versus equity arrangements The rules for classifying arrangements as debt or equity for taxation purposes...

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Company Residency

Company Residency

Contents Context  The definition of a company tax resident Central management and control Complications presented by the central management and control test Voting power controlled by resident...

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Trust Law and Trust Tax

Trust Law and Trust Tax

Contents What is the Income of the Trust Estate?   What is the Net Income of the Trust?  The Interaction of Income of the Trust Estate and Net Income to Determine Tax Outcomes   Issues with the...

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Everett Assignment

Everett Assignment

Contents What is an assignment? What is an Everett assignment?   What is the tax advantage of an Everett assignment?   What about assignments dissimilar to Everett type assignments?     Allowable...

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Taxable Australian Property

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...

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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...

Bucket Company

Contents What is a Bucket Company?  How Does a Bucket Company Work?  Tax Efficiency Through Trust Profits  Base Rate Entity  How to Set Up a Bucket Company?  Determining Share Ownership for the Company  What Possibilities Exist for Funds Held in a Bucket Company?  How...

Base Rate Entity

What is a Base Rate Entity?  Base rate entities are subject to a reduced tax rate of 25%. This rate represents a 5% reduction compared to the standard company tax rate of 30%.  To qualify as a base rate entity a company must meet two criteria. First, its aggregated...

Debt and Equity Rules

Contents What is debt funding and equity funding? The taxation of debt arrangements versus equity arrangements The rules for classifying arrangements as debt or equity for taxation purposes Conclusion What is debt funding and equity funding? There are broadly two...

Company Residency

Contents Context  The definition of a company tax resident Central management and control Complications presented by the central management and control test Voting power controlled by resident shareholders Dual Resident Companies What happens if a foreign company is...

Trust Law and Trust Tax

Contents What is the Income of the Trust Estate?   What is the Net Income of the Trust?  The Interaction of Income of the Trust Estate and Net Income to Determine Tax Outcomes   Issues with the Interaction of Income of the Trust Estate and Net Income  The Ability to...

Everett Assignment

Contents What is an assignment? What is an Everett assignment?   What is the tax advantage of an Everett assignment?   What about assignments dissimilar to Everett type assignments?     Allowable deductions for expenses related to assigned partnership interests...

Business Commencement and Closure Deductions

Contents Introduction Pre Commencement Expenditure Closure Related Expenditure Specific Deductions Blackhole Expenditure Small Business Entity Immediate Deduction Introduction  The most common way a taxpayer will be eligible for a deduction on business related...

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

Contents What is TOFA? Entities required to comply with TOFA rules Opting for the TOFA (division 230) framework What are financial arrangements? Determining profits and losses from financial arrangements Integrity measures TOFA tax timing methods What is TOFA?TOFA...

NANE Income

Contents What is NANE income? Why income is classified as NANE Key categories of NANE income Exclusions from 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...

Exempt Income

Contents What is exempt income? Exclusion of ordinary income from assessable income Consequences of exemption Exempt income for education and training Exemptions for educational payments Defence related payments Welfare and exemptions Compensation for loss of pay or...

Contractor vs Employee

When hiring workers, it is critical to correctly classify a worker as an employee or contractor. If an employer classifies them incorrectly, they may face fines and penalties. However, classifying workers is not as simple as one may think as there are multiple factors...

Employee Share Scheme

Contents What is an employee share scheme? ESS – Employer’s perspective Employer obligations ESS– Employee’s perspective Employer obligations What is an employee share scheme?An employee share scheme (ESS) is a scheme under which shares, stapled securities or rights...

Intellectual Property

Contents What is intellectual property? Entitlement to a deduction for the payment of rights to use ip? Is income derived from ip assessable? What is intellectual property?Intellectual property IP encompasses a range of intangible assets and rights held by a taxpayer....

Allocation of Professional Firm Profits

Contents Gateway 1 – commercial rationale Gateway 2 – high risk features The risk assessment framework Related articles The distribution of profits made by professional firms to the controllers of a business and their associates may present tax complications....

Testamentary Trust

Contents What is a testamentary trust? Distinctive features of testamentary trusts Testamentary trust will vs standard will Who should create a testamentary trust Other specific scenarios where testamentary trusts are beneficial Factors to consider before establishing...

Hire Purchase Agreement

Contents What is a hire purchase agreement? Tax treatment Hire purchase v leasing v outright purchase Limitations under division 240 What is a hire purchase agreement?A hire purchase agreement commonly refers to a contractual arrangement whereby a person or entity...

Tax on Compensation

Compensation payoutsThere are many forms of compensation payouts which may be awarded to taxpayers. This can include compensation in relation to personal injury or illness, damage to reputation, damage to property, lost employment, lost opportunity, or loss of income...