The ATO has been trying to crackdown on the use of trusts for many years and has recently released the following draft ruling, guideline and taxpayer alert relating to trust distributions that have associated reimbursement agreements: Draft Taxation Ruling (TR 2022/D1) – this deals with the ATO’s views on when section 100A will apply; Draft Practical Compliance Guideline […]
The expansion of Single Touch Payroll (STP2 / STP Phase 2), significantly increases the amount of payroll information that needs to be reported to the ATO. It is hoped that this additional reporting will assist in ensuring employees are paid correctly as well as reducing the need for employers to report information about employees to […]
The concept of “negative gearing” essentially means that your property makes a tax loss from renting. As a result, the ATO may effectively pay for some of the rental costs due to an increase in your tax refund (or reduction in your tax liability). Why would anyone want to be negatively geared? There are two main reasons: […]
There are generous tax incentives currently available which are designed to attract and encourage investment into early-stage Australian companies (i.e. Startups & ScaleUps). The Government has announced it will review these tax incentives. These tax incentives include: The Early Stage Innovation Company (ESIC) Tax Offset, which is a non-refundable carry forward tax offset equal to […]
One of the big ones when it comes to Division 7A Mess Ups is underpayment or nonpayment of interest. Failure to satisfy the conditions of a complying Division 7A loan or a subtrust investment arrangement is considered a breach. Underpayment or nonpayment of interest is such a breach. Underpayment can occur by using the wrong […]
Division 7A has all sorts of ways of being triggered and one of the ways is the private use of property and luxury goods. Broadly, the simple scenario is where a company owns a house, car or boat and a family member uses that house, car or boat for private use without paying a market […]
Over the last decade accountants on behalf of their clients have had to deal with the UPE issue. When a trust makes a company entitled to income but does not actually transfer the money to the company to clear out the entitlement, this is called an “unpaid present entitlement” (UPE). If a UPE persists then […]
As a brief preamble, a loan a company made to shareholders or associates before 4 December 1997 (“pre-97 Loan”) and an unpaid present entitlement from a trust to a company made before 16 December 2009 (“pre-09 UPE”) are typically ‘quarantined’ from the ATO’s Division 7A compliance action. In simple terms, if your company has either […]
In recent months we’ve had several people approach us for help with Division 7A due to errors made by their previous accountant. As specialists in Division 7A and WA’s GO-TO in fixing disastrous Division 7A errors, we thought it prudent to publish this series on some of the most common Division 7A Mess Ups. Part […]
AN IMPORTANT MESSAGE TO ALL EMPLOYERS Single Touch Payroll (“STP”) is a new compliance obligation for employers regarding the transmission of payroll information to the ATO (employee name, TFN, wages, tax and super). To satisfy the Single Touch Payroll obligations, employers will either use their own payroll software or engage a third party (e.g. accountant) to […]
Recently I had the pleasure of attending the ASNAF conference in Goa, India. ASNAF is an alliance of accounting firms in various countries across Asia and Australasia; and Munro’s is the only firm in the alliance from Western Australia. Through the ASNAF alliance, Munro’s leverages the local expertise of member firms from countries in Asia […]
Starting a small business usually means taking some financial risks, and for a while, some financial hits. Apart from the initial investment, there may be inefficiencies or errors made during the crucial startup days. According to Dun & Bradstreet, 90% of the small business failures are caused by poor cash flow. For small businesses, the […]
Divorce, as we know, is unfortunately all too common. It’s a stressful time with emotions running high, which in turn can lead to significant legal and accounting fees being incurred haggling over the division of assets. I have become recently involved in a divorce matter, whereby it has been dragging on now for over four […]
Sadly, it is not uncommon to hear about fraud affecting small and larger businesses alike. I have certainly heard a few stories over the years! And fraud doesn’t discriminate, it can happen anywhere, anytime, no matter how big or small your business is. For every minute fraud goes undiscovered, your business pays! So what do […]
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