Category: Taxation
Who is assessable on interest income? Those who “benefit”
It is a fairly well-established and welcome act for an aunt or uncle or of course a parent to start a savings account for a new addition to the next generation. It is not so common however, among the warm and generous emotions that accompany such a gift to factor in the taxation obligations that...
Company tax franking implications
The recent cut to the tax rate for incorporated businesses that turnover less than $50 million a year, while generally welcomed, can bring with it some important considerations when it comes to distributing franked dividends. The rate change to 27.5% is to be staggered, starting with companies that turnover up to $10 million a year,...
Business costs, and the deductibility of interest expenses
If a business racks up an interest bill from borrowing funds to pay for the expenses of running the business, or to acquire other income-producing assets or investments, this expense is generally allowed as a tax deduction for the relevant year. For business taxpayers under the accruals accounting method, a claim can be made for...
Are personal carer travel costs claimable? It depends
A recent court decision, and subsequent appeal, has ramifications for taxpayers with disabilities, and who are in need of a personal carer. The decision centres around what is or is not acceptable as a tax deduction in relation to the costs that arise with regard to that carer under certain conditions. The circumstances of the...
Selling up your business? Don’t forget the “going concern” GST exemption
The concept of a “going concern” exemption for the purposes of the goods and services tax (GST) can still cause confusion when businesses are sold. The sale of a business may be GST exempt if the enterprise is deemed to be a “going concern” — which refers to an enterprise’s ability to continue trading. The...
The CGT implications of subdividing and building on the family property
Given the state of the property market in Australia these days, a not-uncommon situation can arise where a residential property owner seeks to demolish and subdivide the block containing the family home and build residential units. If you have the available land of course, this is a solid strategy. However it can cause headaches from...
BONUS The facts about bad debt deductions
A debt to a business that is unpaid and deemed to be a “bad” debt can be an allowable deduction as long as it was included as assessable income in the present or even a previous income year, and that it is written off as “uncollectable” in the same year that a deduction is claimed....
BONUS Rental property owners can get regular ATO attention on “initial repairs”
The ATO frequently re-focuses its attention on claims that investment property owners make for repairs to rental residences that it deems to in fact be “improvements”. The scenario where investment properties have work done on them often happens shortly after the property is purchased, and has led to the term “initial repair” being commonly used...
Simplified depreciation and the small business pool
The simplified depreciation rules are attractive for small businesses as they allow an immediate write-off for assets costing less than $20,000. In contrast, tax paying entities that do not qualify as a small business must use the general depreciation rules (also known as the uniform capital allowance rules), where assets costing more than $100 need...
Getting deductions for clothing and laundry expenses right
The ATO allows certain taxpayers to claim a deduction for the cost of buying and cleaning occupation-specific clothing, items of protective wear and for certain unique, and usually distinctive, uniforms. To claim a deduction it is generally expected that you will be able to provide evidence that you purchased the clothing concerned, and will have...