Welcome to the November edition of our client newsletter. This month, we’ve compiled a selection of timely and practical insights across tax, superannuation and financial planning – helping you stay informed, confident, and in control of your financial decisions.
In this edition:
1. ATO Is Chasing “Land Banking” by Foreign Investors
If you are a foreign resident and you have acquired vacant land in Australia with Foreign Investment Review Board approval, and you have not met a condition of that approval (namely, building a dwelling or dwellings on that land within the required time), then be careful.
2. Selling Real Property? Declare Any Gain in the Right Income Year!
A recent Federal Court case showed the importance of the rule that a capital gain is assessable in the income year in which the contract for its sale is entered into, even if settlement occurs in a later income year (perhaps several years later).
3. Receiving Loans or Other Benefits From Your Company? Beware!
Earlier this year, the High Court handed down an important decision about the operation of Division 7A (Div 7A). This is the rule in the tax law that, broadly, treats company loans made to shareholders (or their associates) as a deemed dividend in the hands of the shareholder.
4. Super Death Benefit – ATO Rules Adult Child Is Not a Dependant Despite Disability
Adult children are not usually dependants for tax purposes. A recent private ruling shows that even a serious disability may not be enough for an adult child to satisfy dependency. In the private ruling the adult child had severe medical conditions from childhood and needed 24-hour support for life.
5. Part IVA – Where Tax Planning Crosses the Line
You’re entitled to arrange your affairs to pay less tax. Choosing a business structure or timing an asset sale is ordinary planning. But Part IVA of the Income Tax Assessment Act 1936, Australia’s general anti-avoidance rule, lets the ATO cancel a tax benefit where the dominant purpose is to get that tax benefit. That can happen even when every step follows the law.
6. What Happens to Your Age Pension if You Retire Overseas
If you retire overseas, you may still be able to receive the Age Pension, but some things change. The Pension Supplement and Energy Supplement stop the day you leave, and your Pensioner Concession Card is cancelled. After 26 weeks, your pension can be cut if you lived in Australia as a resident for less than 35 years between age 16 and Age Pension age.
Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.
ATO Key Dates
To view the ATO’s key dates for November, please click here.
