The ATO, after consultation and collaboration with business taxpayers and industry representatives, has developed what it calls a “safe harbour” mechanism for calculating car fringe benefits under the operating cost method. In ATO parlance, a safe harbour is a guideline that allows taxpayers to make use of a simplified and efficient way to calculate their...

The tax rates that apply to income a deceased estate declares depend on the period of time after the person’s death. First three income years For the first three income years, the deceased estate income is taxed at individual income tax rates, with the benefit of the full tax-free threshold, but without the tax offsets...

It is important to understand the differences between a hobby and a business for tax, insurance and legal purposes among other things. For one thing, there will be certain tax and other obligations that start once you are in business. However it’s a myth that there is a dollar threshold to be in a business...

An essential starting point for consideration of trust income and how that income is to be distributed is to look at the trust deed. This very central document sets out the rules and expectations for the governance and operation of the trust and the powers that can be exercised by the trustee. Although it can...

Most people’s “to-do” list when they are planning a trip overseas will likely include items such as travel insurance, phone chargers or taking photos of their passport — but probably the last thing on anyone’s minds will be their likely tax situation before, during or after that trip-of-a-lifetime. However a few simple considerations, taken in...

You are allowed to take issue with the ATO if it disagrees with your self-assessment of your tax position. If you believe the ATO’s assessment is incorrect, the first step is straight forward and fairly informal. You contact us and we start making inquiries. If it still seems the assessment is wrong, or if you...

This tax time, the ATO, as usual, has nominated some tax claim hot spots that it will be paying attention to — and which you should approach with caution when claiming these deductions. For example, the ATO has already flagged that it will be checking returns for taxpayers who take advantage of the exemption from...

When you have plans for starting a new business, one of the central decisions is which business trading structure will work best for your venture. The general problem however can be that there are both pros and cons with the main options available, so considerations need to be given with regard to the overall situation...

The income year of 2019-20 has just ticked over, which is also the first year in which an individual is able to make additional catch-up contributions to super through the application of unused concessional (before tax) contributions. These are “unused” if the fund member made less than the legislated cap on such contributions, which was...

A new ruling has been released by the ATO on the deductibility or otherwise of “penalty interest”. The term penalty interest refers to an amount payable by a borrower under a loan agreement when the lender agrees to an early repayment of a loan. The amount payable is commonly calculated by reference to the number...