We are a not-for-profit registered charity, registered for GST and endorsed for income tax exemption, operating as a church. Another legal entity (also a registered not-for-profit charity) owns the church property. It leases it to our legal entity, which is the local church. The lessee pays property costs (e.g., rates, insurance) as part of the lease agreement. Because the invoices …

In the event of voluntary bankruptcy and SMSF, I presume the director of the corporate trustee must remove themself, and therefore fund must close. What happens to the assets in the fund? Are the funds exposed to the bankruptcy trustee if already bankrupt, and the fund must then close? If the funds remain in the SMSF (cash),  can I close …

I need to make a redundancy payment but need some advice on how to calculate the payment correctly. Answer We take it the payment has been negotiated and that it is only a matter of determining the tax treatment. If it is a genuine bona fide redundancy, then the following tax treatment applies. No tax will be payable on $11,341 …

For example (his wife and brother-in-law ) are planning of purchasing the late sisters’ property as an investment property. They intend to keep their sisters legacy at the same time as an investment for him and his wife for future generations. They will be using their own personal funds (husband and wife) for the purchase. The sale proceeds can be …

An employee leaves working for a large chain as an area manager, takes a new position at an associated subsidiary being an area manager. The employer’s ABN changes, but he rolls his AL, LSL, and SL to the new employer, as it’s the same parent company. As part of the package at the large chain, he gets a salary packaged car …

Our preschool is currently in the LGA with a snap lockdown. I am just curious if we have no children turn up to preschool – and no jobs to be done at preschool, can I send my staff home with no pay? Do I use their sick pay? If they don’t want to come to work due to mental health, …

If a family member lends funds for another family member to purchase an investment property and charges interest on the loan, is the interest deductible for the member/owner of the property? I assume if one claims a deduction, the other member declares the interest in their tax return. What rate of interest should be charged against the loan? Answer The …

Can an employee take carers leave for home-schooling during a Covid-19 lockdown? Answer The answer is no. Careers leave only applies and is taken when the person they are caring for is sick, ill, or injured. A business can pay it if they wish, but they are not obligated.

Would you please help with the following questions?  There is a Holding company and Trading company under a dual company structure.  The Holding company owns 100% shares of the Trading company and has no other business activity. Only the income for the Holding company will be the dividend income if the Trading company pays the franked dividend in the future. …

Question: Background The taxpayer is a family trust which has owned a small shopping centre with 5 shops for 25 years. All shops have been leased out for the last 25 years. One shop has been leased to a related entity. The family trust sold the shopping centre in August 2020 with a profit of 2 million dollars. Tax Issue …

Question: Scenario:  The seller has been in practice as a sole trader for over 27 years, just turned 60, and starting to prepare for semi-retirement. A colleague has had discussions about buying 50% of the business and eventually owning 100% down the track so are putting this in place intending to buy in on 1July 2021.  The buyer does not …

Question: Can you please advise if a Family Discretionary Trust  (owned by son) can distribute trading profit to a Company (owned by father)? Answer This is quite possible, but you need to refer to the clause of beneficiaries in the trust deed to determine if the father’s company is an eligible beneficiary.

Question: Could you please confirm what company rate is applicable on the following? Distribution from a Family Trust to a Company. All income is from a trading business within the Trust. As more than 80% of the income, being distributed from the discretionary trust to the company is not passive income. Can you please advise what tax rate is applicable …

Question: My client has a superannuation fund with defined benefits and member contributions with an employer. The employer proposed to merge with another super fund with an accumulation merger fund. My client question from me is : What is advantage and disadvantage of merging proposed fund? Answer We assume your client has a choice. Usually, a defined benefit fund has …

Question: An employee that has handed in their resignation and I am after some advice as to whether they are entitled to a redundancy payment on termination. They are employed under the Building & Construction General Onsite Award 2010 and is currently employed as a trainee surveyor. When they first started with the company they were employed as a Civil …

Question: Scenario: A staff member requires time off for ill-health but has no sick leave accrued and is minus 27 hours. If we do not pay them for this time off, is it recorded as sick leave, even though they are not paid for it? If so, do we then still deduct the sick leave amount from their sick leave …

Question: I have a question regarding personal leave regulations. In the last couple of years, there was a period that paid personal leave for part-time employees was increased to 10 days. Can you please tell me when that started & finished? Answer: The decision was overturned by the High Court so there is no effect moving forward.

Question: An employee started on 29.5.12 then become permanent 27.8.12. When calculating LSL what date do I calculate from? Answer The Long Service Leave Act 1955 (the Act) provides full-time, part-time, and casual workers (or any combination of these throughout the period of service) in NSW to 2 months (8.6667 weeks) paid long service leave on completion of 10 years’ …

Question: We have a staff member who has been encouraged to have the Astra Zeneca Vaccine. “As recommended by my doctor and due to existing medical condition, I need to have Vaccine (Astra Zeneca).” It is for the entire day so have asked if they can submit the day off as sick leave? If everyone wants a day off to …

Question: Please advise if when using the statutory formula method for calculating FBT payable, if we should be using Type 1 or Type 2. Please provide an extract from the legislation if possible. Answer The difference between a Type 1 fringe benefit and a Type 2 fringe benefit is whether the amount is entitled to a GST credit. Type 1 fringe benefits are a GST …

Question: A quick question on an employee’s termination pay. A staff member worked full time before their maternity leave. Due to the COVID impact and their young child, changed to a different position and worked reduced hours after their return. However, the new role is no longer available, and the business has decided to pay them their redundancy and in …

Question: One of our employees is moving to China and will still work for us remotely. Is there anything we need to consider for tax purposes under this situation? Do we still need to withhold PAYG tax? Although the employee will be in another country, she will still have her TFN and Australian banking account. Answer In the event the …

Question: I know that the small company tax rate will be reduced to 26% from the year 2021/22. So far, the company has franking account balance on 30/06/2020 as below: Total profit $190,000    Tax (27.5%): $52250 all paid. If the company wants to distribute $100,000 profit to its shareholders(two), In this case, it is my understanding that the franking credit …

Question: Two employees have been doing extra days/hours for the entire term 1. Regarding the 2 weeks holidays approaching (in which we do not work) are they entitled to be paid for the hours they have worked during term 1 or do they go back to their normal hours? Also, we have an employee that has been absent (LWP) from …

Question: We have a new client they are a small family partnership. The previous accountant has deferred all the losses from the business activity. I believe this may have built up to approximately $200,000, for both partners. I suspect this was to enable the client to receive the Age Pension. Apart from a small holding of shares and age pension …

Question: Withholding Clearance – House Sold Over $750k Query please – client sold a house and was one day late with the certificate of clearance, so  $50K was withheld. Spoke to the ATO and they said I cannot lodge a 2021 tax return  now (by paper) to recoup the funds – the client needs the money now, not in say …

Question My query relates to Capital Gains distribution in a family trust. Have 3 beneficiaries who are presently entitled and could receive a distribution of CG in the 20/21 year. A – earns $3000 in the year. B – earns $50,000. C – is a foreign resident for tax purposes (no earnings here). Could you please show what would be …

Question We require clarification on an issue we are experiencing with an employee. The individual has not called or reported to work yesterday or today. Their usual workdays are Tuesday, Wednesday & Thursday. Can you advise how long it must be before they have “abandoned” their place of employment? Can you advise if we still must pay them for a …

2021-22 FEDERAL BUDGET TAX OVERVIEW Introduction… The 2021-22 Budget outlines the Morrison Government’s plan for recovery from the impacts of the COVID-19 pandemic focused on growing the economy and creating jobs for Australians. On 11 May 2021, Treasurer Josh Frydenberg handed down his second “pandemic budget” amidst a backdrop of continuing uncertainty. Acknowledging that the virus is a continuing threat …

Question I have a few questions about GST on investment property transfer as below: My individual client bought a brand-new house from the developer. She then leases it back to them (for them to use as a display unit) for two years. After that she plans to sell the house immediately. Will there be GST on the sale price? My …