It may seem fairly obvious whether a person is in business or not, but the distinction can be important for other reasons. Your client may be having fun AND making money. But is it a business or a hobby? For example, if you are not carrying on a business, the option to deduct losses from...

March 31 and the end of the FBT year is around the corner, so to help taxpayers get things right, the ATO has made public the fringe benefits tax issues that attract its attention. Broadly (not just in relation to FBT), the ATO says the following behaviours and characteristics tend to raise a red flag:...

A question that surfaces now and then in regard to capital gains is whether the main residence exemption extends to additional land acquired after the time of acquisition of the residence. The short answer is yes — provided that certain requirements are met. It should also be noted that where the exemption applies upon satisfaction...

A general law partnership is formed when two or more people (and up to, but no more than, 20 people) go into business together. Partnerships are generally set up so that all partners are equally responsible for the management of the business, but each also has liability for the debts that business may incur. Partnership deduction...

It is very often the case that unpaid debts owed to a business can have a significant impact on cash flow and the ongoing profitability of a business. In a taxation context the characterisation of a particular debt as either “doubtful” or “bad” is key as to whether or not the writing off of that...

The superannuation rules stipulate that an employee’s earnings base must be the amount on which minimum superannuation contributions are payable to avoid the superannuation guarantee charge (SGC). This earnings base is determined as “ordinary time earnings” (OTE). In general terms, this seems self-explanatory — that is, OTE is what an employee earns for their day-to-day...

As a tax concept, “entertainment” can be relevant not only to fringe benefits tax (FBT), but also to income tax and even goods and services tax (GST). For a business, whether a business expense is “entertainment” will generally also determine whether the cost is deductible. If the expenditure can be shown to be directly connected...

A profit that arises from the carrying out of a profit-making undertaking or plan (that is, one with a profit-making intention) will be assessable as statutory income where the proceeds of the profit-making undertaking or plan are not otherwise assessable as ordinary income. Any capital profit on the disposal of assets acquired before 20 September...

Have you ever gone to pay for your coffee or lunch and saw the tip jar at the local café counter, and wondered how (or if) the business and/or its staff accounts for tax on that money? Depending on a number of factors, this can add up to quite a sum over a year, assuming...

Business owners of private companies often borrow money from their own companies for all sorts of reasons. However there is an area of the tax law that seeks to sanction against situations in which private companies dole out money to those within a business, in a form other than salary or dividends, that needs to...