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Hybrid Mismatch Rules

Hybrid Mismatch Rules   The hybrid mismatch 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 a...

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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...

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Private Ruling

Private Ruling

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

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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...

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Part IVA

Part IVA What is 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...

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Debt and Equity Rules

Debt and Equity Rules   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...

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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,...

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Hybrid Mismatch Rules

Hybrid Mismatch Rules   The hybrid mismatch 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 a hybrid mismatch. The hybrid mismatch rules are contained in Division 832 of...

Unpaid Present Entitlement (UPE)

Unpaid Present Entitlement (UPE)     What is present entitlement? 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...

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

Private Ruling   A private ruling is written advice from the Australian Taxation Office (ATO) 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...

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 What is 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...

Debt and Equity Rules

Debt and Equity Rules   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 involves a...

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 & Closure Deductions

Business Commencement & 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...

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 not recognise a capital gain or...

TOFA

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 taxation of...

NANE Income

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

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

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

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...

Testamentary Trust

Testamentary Trust     A testamentary trust is 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

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...