No 14: Government announces reforms to superannuation

On Friday 5 April 2013 the Government announced reforms to the superannuation system. Key reforms announced include: Cap on the tax exemption for earnings on assets supporting a super income stream – from 1 July 2014 earnings in super on assets supporting income streams will only be tax free up to $100,000 a year for each
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No 13: Failure to lodge on time (FTL) penalty increase

Recent changes to the Commonwealth legislation have led to a significant increase in the maximum penalty that the Australian Taxation Office can impose on returns or statements that are lodged late or remain overdue. It is also likely that there will be further increases to the penalties on a regular basis in the future. How
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No 12: Failing to meet minimum pension requirements

In mid 2011 the ATO issued a draft taxation ruling which represented the Commissioner’s preliminary view about the way in which the relevant taxation provisions applied upon the commencement and cessation of a pension or, as it is referred to in the draft ruling, a superannuation income stream. Whilst there are aspects of the draft
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No 11: SMSF Changes to be aware of

In 2009 the Government commissioned an independent review of the governance, efficiency, structure and operation of the superannuation system (the Cooper Review). When the final report was received by the Government in June 2010, it contained a number of recommendations applicable to self-managed superannuation funds (SMSFs). A number of these recommendations have been recently given
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No 10: TFN Reports for Closely held Trusts – due 31 July 2012

As outlined in Client Alert no 6 – TFN Withholding for Closely held Trusts, the government introduced legislation which applies from 1 July 2010 which requires “closely held trusts” to withhold tax from distributions to beneficiaries where the beneficiary has not provided its tax file number (TFN) to the trust and the trust has not
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No 9: Private Health Insurance premiums to be means tested

The government has introduced legislation from 1 July 2012 to means test an individual’s entitlement to the rebate on their private health insurance premiums. Prior to 1 July 2012, individuals who had a complying health insurance policy with a registered health insurer were entitled to a minimum tax offset of 30% and a maximum of
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No 8: Urgent Issues for Trusts – Action required by 30 June 2012

Further to our previous Client Alerts in relation to important tax issues for Trusts, it appears the Australian Taxation Office (ATO) are continuing to increase their strict compliance approach towards trusts. Trustee Resolutions The ATO has just released a fact sheet in relation to Trustee resolutions (refer to link: http://www.ato.gov.au/General/Trusts/In-detail/Changes/Trustee-resolutions-must-be-made-no-later-than-30-June/. The fact sheet highlights that Trustees
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No 7: Trusts – Present Entitlement to Income and Trustee Resolutions

The Government recently passed new Trust Legislation which clarifies the taxation treatment of trust income and the manner in which the trust beneficiaries are taxed when made presently entitled to a share of the trust’s net income. The legislation rewrite puts to rest the debate that arose after the ATO released its Practice Statement regarding
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No 6: TFN Withholding for Closely held Trusts

The government has introduced legislation which applies from 1 July 2010 which requires “closely held trusts” to withhold tax from distributions to beneficiaries where the beneficiary has not provided its tax file number (TFN) to the trust and the trust has not reported the TFN to the Australian Taxation Office (ATO) within a specified time
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No.5: Clarification regarding streaming 2011 Federal Budget Update

You may be aware that the Australian Taxation Office recently challenged the validity of trustees using streaming clauses within discretionary trust Deeds to enable different classes of income to be distributed to different beneficiaries (e.g Franked income, capital gains, interest income etc). Following the 2010 High Court decision in Bamford v F C of T,
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