Contract,

If the payment is for payment of services or “personal exertion” and you are an Australian Resident for tax purposes then you are assessed on income from all sources (regardless of where the income is earned). You should consult a good accountant and determine whether the income is covered by Australian taw laws.

Let’s assume that it…[Read more]

Some good news on the Bankruptcy Laws front. The latest reforms have been withdrawn.

http://www.ag.gov.au/www/ministerruddockhome.nsf/Web+Pages/7F3FC7CDB6C1374ACA256EDA00026EC1?OpenDocument

The assumption is that property will continue to make such capital gains. As the economists are saying property is now at a historically high level i.e. around 9 times earnings and we know that this is not sustainable. Either one of two things are going to happen (or maybe a combination of both). Prices will decrease so that affordability is…[Read more]

Shaun,

I trust that you are being facetious. The bestest buddy ever is something I would sign for charity but “who i couldnt have gotten where i am without your help”. Well unless this is true there is no way I would be signing such a clause. I don’t know if you realise but making such a statement and signing it would legally enable you to…[Read more]

It seems like this is a new puzzle. Aussiemike has won the book by correcting an incorrect variable. WrapAttack is the rightful winner by using the correct variables. Initially Aussiemike has won, then wrapattack wins as well. But WrapAttack doesn’t want his book and offers it to Mel or auction. Meanwhile Aussiemike offers his book to…[Read more]

Steve,

More than happy for my book to go to Auction as well with the proceeds to the Smith Family. They do a wonderful job. Sounds like a good idea.

Hey Steve you can’t even give your book away. This is hysterical.

Given that I seem to have won and the judges decision is final I would like to award my prize to WrapAttack. At the time of posting they came up with the correct answer.

Ive had to change my clients figures so many times I’m just used to it. Seriously though congrats WrapAttack.

I figured that Steve had made a mistake and just taken 1/4 as being 0.5 and therefore used 2.5% to determine the selling costs.

I agree that -1,505 is technically the correct answer but that wasn’t an option. So like all good accountants I just played with the variable I figured was incorrect.

I do think the person that said -1,505 should get…[Read more]

I get the answer to be E

Initial Purchase Price 400,000.00

Plus : Closing Costs 20,000.00
Plus : Selling Costs @ 2.5% 10,950.00

Cost Base of Asset for Tax Purposes 430,950.00

Sales Proceeds 438,000.00

Capital Gain 7,050.00
Note : Not subject to 50% CGT
Discount as held for less than
12 months

Less : Cost of Property for 12…[Read more]

Terry,

The changes to the Bankruptcy Laws are frightening. Did you read Brett Davies Lawyers recent newsletter ?

This is for those that are interested.

There is a very naughty business called Casualife Furniture run by the Guss family. It builds up lots of ATO debt. They then voluntarily wind up their insolvent company. Not to worry. They just…[Read more]

WrapAttack,

I have expanded my response. I am not quite sure what you mean when you say you paid it ? Are you saying that you paid the stamp duty when you transferred the share ?

WrapAttack,

A few issues:-

1. Although the company tax rate is 30% and any capital gains are assessed at that rate companies are also not entitled to the 50% CGT discount. Trusts are entitled to the 50% CGT discount. This could have a significant tax impact. For example if you had a capital gain (after allowing for incidental costs,etc) of…[Read more]

Sounds reasonable to me. My hourly charge out rate when I was in practice was $250 per hour. Given that you had a few phone conversations (say 3 @ 10 minutes each that accounts for 1/2 hr and then another 1/2 hr discussing the trust situation with the lawyer and preparing relevant correspondence would equate to an hour on top of the hour you…[Read more]

Mel,

Certainly not claiming you are evading tax but just a warning for those that think they can understate their tax or commit fraud or evasion and get away with it. Those days are coming to an end.

And if the Tax Office does find that you have committed fraud they can refer it to the appropriate authorities e.g. Police, Centrelink, etc and…[Read more]

Yes and i certainly wouldn’t advise telling the ATO to go and jump.

Remember an administrative penalty of 20 penalty units ($2,200) applies if a taxpayer fails to provide ALL reasonable facilities to a taxation officer who is authorised by taxation law to have access to places, premises, books and other information (TAA Sch 1 sec 288-35 ). These…[Read more]

Krazy is talking about the Australian version of Monopoly which came out 1985. Prior to that Australians had the London version of the game. I think there are over 50 different countries for Monopoly now. Great game.

Mortgage Advisor,

I would seek a private ruling from the ATO on this one.

You may be caught out under a few provisions:-

-the period of interest outgoings before the derivation of relevant assessable income is not so long that the necessary connection between outgoings and assessable income is lost;

(The ATO may consider 2 years to be too…[Read more]

Sooshie,

If you have trouble finding one that agrees then go elsewhere. They are not up-to-date and are not worth the money you are spending on them.

The relevant Taxation Ruling is TR 2004/4.

This ruling deals with the deductibility of interest on borrowed funds incurred before the commencement of, and after the cessation of, business activities. The ruling follows the High Court decision in Steele’s case (99 ATC 4242), and the Full Federal Court decisions in Brown’s case (99 ATC 4600) and…[Read more]