What You Need to Know About Personal Services Income and Part IVA
There is a complex set of tax rules that deal with what is known as personal services income (PSI). PSI results from the efforts of human beings, where the income is mainly a reward for the personal efforts and skills of an individual. Many occupations derive personal services income. These include both so-called professionals and tradespeople. In the […]
Is It Bad to Want to Save Tax? A Look at Tax Planning vs Tax Evasion
Is it bad to want to save tax? We hear in the news and from politicians about big companies and individuals avoiding their tax responsibilities. These businesses are often portrayed in a negative light, with the implied suggestion that their actions are bordering on criminal activity. But is it wrong to want to save tax? If you […]
Capital Gains Tax on Inherited Property: What Happens When You Inherit a Home?
One of the most frequently asked capital gains tax questions concerns the situation where a person dies, leaving their home to beneficiaries of their will. Unfortunately, depending on the circumstances, the answer to the question can be very complex especially when it comes to capital gains tax on inherited property. An example of capital gains tax on inheritance Susan and Doug […]
When to Rethink Your Business Structure
The entity or way in which a business is operated can be referred to as its business structure. This could be through a sole proprietorship, a partnership, a company or a trust. Also, there can be multiple entities set up for different reasons. What a business restructure can look like Many businesses, at some point in their existence, will go through […]
Employee vs Contractor: Understanding the ATO and the Practical Compliance Guideline
An issue that never seems to go away is determining whether an individual working for a business is engaged as an employee or as an individual contractor. The distinction is very important because a number of tax obligations hinge on the decision. The Tax Office has had its say on the issue with two important documents: Taxation Ruling TR 2023/4 and the Practical Compliance Guideline PCG […]
How to Stay Compliant with Christmas Gift Tax Deductions This Festive Season
It’s Christmas. So much to do. There is the office Christmas party to organise. Gifts to buy for the whole team. Hampers and other Christmas gifts for key clients and suppliers. But wait! My accountant says that some of this might not be tax-deductible. Some of it might be subject to Fringe Benefits Tax (FBT). Here are […]
Small Business Tax Compliance: How a small business got into trouble with the ATO
This is the story of a case decided in the Administrative Appeals Tribunal (AAT) in April 2024. Dennis and Nina, a Queensland couple, were partners in a building partnership that carried out construction and maintenance work. They also owned a private company, Beta Leigh Pty Ltd, which was involved in land development, building and selling […]
Understanding a Division 7A Loan Agreement and Minimum Yearly Repayments
If you have a private company and it has made a loan to a shareholder or an associate of a shareholder, don’t forget your obligations to either repay the loan in full or make a minimum yearly repayment under a Division 7A Loan Agreement. Let’s say that you, as a shareholder in a private company […]
Is a Self-Managed Super Fund Right for You?
When it comes to planning for retirement, many Australians are exploring the benefits of Self-Managed Super Funds (SMSFs). These funds offer more control and flexibility than traditional super options, but they also come with increased responsibility and complexity. Below, we explore the key pros and cons to help you determine if an SMSF is the […]
Is It Time for a Business Restructure?
The entity or legal arrangement through which a business operates is known as its structure. This could be a sole proprietorship, a partnership, a company, or a trust. In many cases, businesses also set up multiple entities for different purposes. What a Business Restructure Can Look Like Many businesses will undergo a business restructure at […]