Preparing for the FBT year-end

With the end of the fringe benefits tax (FBT) year fast approaching, business owners need to be aware of the FBT and gross up rates when preparing for their FBT return. The FBT rate increased from 47 per cent to 49 per cent from 1 April 2015. The rate increase was due to the introduction…

Avoiding CGT in your SMSF

It may be beneficial for trustees who buy and sell assets through their self-managed super fund to start a transition to retirement pension to escape the burden of capital gains tax. Capital gains are profits that an SMSF makes on the sale of an asset. Capital gains tax (CGT) is a tax on the profits…

No tax penalty when restructuring your business

Federal Parliament recently passed legislation that will allow small businesses to change the legal structure of their enterprise without incurring a capital gains tax (CGT) liability. Instead, the CGT liability can be deferred until eventual disposal. The legislation, ‘Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016′, will apply from July 2016. It provides an…

Renting out a room can incur CGT

A large number of Australians who rent out a room in their home, whether it be via Airbnb or another avenue, are unaware that the practice can incur capital gains tax (CGT). Many assume CGT is not on the cards because profit made from the family home (or ‘primary residence’) is usually tax-free. However, those…

How do franking credits work?

Franking credits are a kind of tax credit that allows Australian companies to pass on the tax paid at company level to shareholders. Franking credits can reduce the income tax paid on dividends or potentially be received as a tax refund. Where a company distributes fully franked dividends (and those dividends are included in the…

Tax office uncovering Australia’s wealthy

The ATO is currently working with insurance providers in a bid to identify wealthy Australians with policies that cover an expanded range of asset classes. Last month, the office launched a data-matching program, which involves contacting insurers to distinguish policy owners of various classes of insured assets that are often associated with wealth. Insurance policies…

Types of fringe benefits

FBT law includes different categories of fringe benefits and specific valuation rules for each category. FBT is a tax employers pay on benefits they provide to their employees, including their employees’ family or other associates. The benefit may be in addition to, or part of, an employee’s salary or wages. Employers who provide fringe benefits…

Cutting tax on share transfers

While the transfer of shares from an individual to their super fund will trigger a CGT event and therefore capital gains tax, there are ways individuals can minimise this. Individuals can transfer shares to a self-managed superannuation fund (SMSF) by completing an off-market transfer, also known as an in-specie transfer. An off-market transfer is the…