Tax file numbers (TFNs) are so much an everyday element when dealing with tax and the ATO that many taxpayers won’t give it a second thought when tax return software responds with an “invalid” when a TFN is entered. The common thought will be that it’s human error, so naturally one’s first reaction will be...

Historically, taxpayers may have been able to claim a deduction for the costs associated with setting up a business or raising finance, including the costs incurred in: establishing a company or other business structure converting a business structure to a different structure raising equity for the business defending it against a takeover unsuccessfully attempting a...

After waiting for what seems like an eternity, the government has finally put to Parliament its proposed legislation around two of its proposed schemes, the First Home Super Saver and Contributing the proceeds of downsizing to superannuation.  This legislation is an attempt to bring into action proposals from the 2017 federal budget. The proposals aim...

Have you or someone you know considered taking up ride-sharing (also called ride-sourcing) to earn extra income, or even as an alternative form of employment? When providing ride-sharing services through Uber or GoCatch and other facilitators for a fare, there are things you will need to know, and traps you need to be aware of....

Investment products may be held as trading stock by a taxpayer carrying on a business of share trading or options trading. However, whether a particular parcel should be treated as trading stock must be determined on a case-by-case basis. Generally, the tax issues facing share traders versus passive investors are summarised below. Tax treatment of...

The ATO says its base tax penalty amount may be increased or reduced. The base penalty amount may be increased where the taxpayer hinders the ATO, but it also may be reduced in the following circumstances. Voluntary disclosure The voluntary disclosure to the Commissioner of a tax shortfall will result in a reduction of the...

If you are planning to permanently move out of the country before the end of this financial year, you may be able to have your tax return lodged early. Generally, the ATO only accepts early lodgement of individual tax returns in certain circumstances. If you are a resident of Australia for tax purposes, returns lodged...

Investment returns can be on revenue or capital account. Similarly investment expenditure could also be on revenue or capital account. The distinction between revenue and capital is not always clear and the characterisation of a receipt will ultimately depend on the circumstances that apply to the taxpayer. The distinction between an income and capital receipt...

The law contains an integrity measure to prevent sharemarket investors from engaging in “dividend washing”. Dividend washing results in two sets of franking credits being claimed on what is effectively the same parcel of shares in publicly listed companies. The arrangement being targeted by the government can be illustrated as follows: Investor X holds parcel...

Certain start-up expenses, including costs associated with raising capital, that would otherwise be deductible over five years are immediately deductible (from July 1, 2015) where they are incurred by an SBE or an entity that is not in business. Before this date, business capital expenditure, including start-up expenses, was deductible over five years for all...