Truck Driver allowed deductions re work expenses
If you are receiving an allowance from your employer and claiming deductions against it, please advise your employer to clearly state what type of allowance it is. In the case of Gleeson v FCT, the FCT had denied the truck driver’s claims for food and drinks as the PAYG did not classify the allowance. However, after contacting the payroll manager of the truck driver, it had become apparent that the allowance was in fact a travel allowance and the tax payer was allowed a deduction. If you receive an allowance, please ask your employer to clearly state what type of allowance it is, so the deductions you claim are not denied.
Early Access to SMSF money assessable
A taxpayer had taken out $62,500 from their Self-Managed Superfund (SMSF) which represented 90% of the funds assets. The money was then used to complete the purchase of a home that she had bought after she was made redundant from her job. Although the taxpayer was above 55 years, attaining the ‘preservation of age’ condition requires the amount to be withdrawn as a pension of annuity. As the funds were not taken out as a pension, the taxpayer had argued the funds were a loan to her as she was incurring hardship. However, the taxpayer’s argument was not satisfactory as there was no formal loan agreement. Furthermore, failing to meet the deposit requirement for a purchase of a new home does not constitute hardship. Please think twice before taking out funds from your SMSF as you may violate the conditions of the SMSF.
CGT Liability Arises on Transfer of Land
Please note if you are intending to adjoin your land with others with the intention to commercially develop the combined lots and sell them off, the adjoining of lands is subjected to capital gains tax and possibly liable to pay stamp duty.
ATO updates its compliance in focus 2013-14
The ATO has updated its Compliance in Focus 2013-14 Document to be current as at 19 December 2013 to include final 2012-13 results and 2013-14 plans. Key focus areas and activities for the ATO for 2013-14 include:
- Large business income tax (including tax consolidation issues, CGT outcomes, complex structuring and scrutiny of financial arrangements) – the ATO plans to conduct 250 risk reviews and 60 audits.
- Profit shifting – Large business and medium enterprises – the ATO plans 125 risk reviews and 26 audits.
- Advance pricing arrangements and mutual agreement procedures – The ATO will review 35 cases.
- Trusts task force and trusts lodgement compliance – The ATO plans 5,000 data matching cases, and around 700 income tax reviews and audits (over the next four years).
- Activity related to tax havens (the ATO says data has revealed extensive use of complex offshore structures by wealthy individuals, companies and their advisers) – the ATO plans 680 reviews and 115 audits.
- Medium enterprises – Income tax (including CGT, consolidation, trusts, private company schemes and fraudulent phoenix activity) – the ATO plans 1,000 reviews and audits, and 2,500 contracts to verify information or provide advice.
- Highly wealthy individuals (those controlling net wealth greater than $30m) – the ATO plans 500 income tax reviews and audits, and 750 contacts to verify information or provide advice.
- Wealthy individuals (those controlling the net wealth between $5m and $30m)- the ATO plans 1,000 income tax reviews and audits and 3,000 contacts to verify information or provide advice.
- GST – Checking business systems taxpayers use to determine GST payable. Focus will be on specific industries, including mining, financial and insurance services. The ATO will check 2,050 cases.
- Property developers- Engaging in phoenix behavior (failing to report the sale of developments and using liquidation to avoid GST obligations) – the ATO will review 150 cases.
- Individuals and small enterprises including contractors – Omitted income (including capital gains, government grants and payments, interest and dividends) – the ATO plans 1,670 CGT reviews and 790 government grants.
The ATO has amended the deductions rates for motor vehicle cents per km deductions for this financial year.
You can check out the ATO website for more information; or alternatively – if you’d like to speak with an experienced and knowledgeable accountant with regard to any of the above information; please don’t hesitate to get in touch with the team here at Fortis Accounting Partners. You can reach us on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com.
