Legal news
We have previously discussed the Full Federal Court decision in Addy v FCT [2020] FCAFC 135 here. In this case, the court held that Ms Addy, a working holiday maker, was not entitled to benefit from the tax-free threshold as she was not an Australian tax resident. The so-called ‘backpacker tax’.
On 11 March 2021, the Australian Taxation Office (ATO) released Draft Taxation Ruling TR 2021/D2 on the operation of personal services income (PSI) rules and the personal services business (PSB) tests.
Land transfer duty is calculated on the dutiable value of the property. In Commissioner of State Revenue (Vic) v 1043 Melton Highway Pty Ltd [2020] VSC 820, the Supreme Court considered default interest is included in ‘consideration’ for the transfer of dutiable property.
In the recent decision of AWF Prop Co 2 Pty Ltd and Ararat Wind Farm Pty Ltd v Ararat Rural City Council and Valuer General Victoria [2020] VSC 853, the Supreme Court of Victoria ruled in favour of the wind farm owners and determined the various wind farm assets (such as wind turbines) to be chattels rather than fixtures.
Many state and federal taxing provisions provide different tax outcomes on the trustees of trusts depending on what type of trust is involved. One example of this is contained in the NSW land tax rules which provides for a land tax surcharge on unit trusts that are “special trusts” rather than “fixed trusts”.
Our international tax series predominantly discusses Federal tax issues relating to non-resident (foreign) beneficiaries or non-resident trustees of a trust. This seventh article of the series focuses on the CGT main residence exemption (CGT MRE) for non-resident beneficiaries of deceased estates.
In CCSR v Benidorm Pty Ltd [2020] NSWCA 285, the NSW Court of Appeal found that a ‘declaration of trust’ did not trigger duty on the basis that it merely acknowledged the existence of an existing trust.
Many states now have foreign land tax surcharges that apply to foreign persons including trustee of foreign trusts. As a result many trustees will consider amending their trust deeds to ensure that they don’t inadvertently trigger such surcharges.
While SMSF trustees should be aware of the ATO’s concerns in relation to property development (for example, as outlined in SMSFRB 2020/1), a recent Full Court of the Supreme Court of South Australia has highlighted the commercial risks of such arrangement.
Under the Superannuation Industry (Supervision) Act 1993 (SIS Act) a disqualified person cannot be a trustee or director of a corporate trustee of a self managed superannuation fund. Where a person is disqualified because of a conviction, they can apply for a waiver of the disqualification status within 14 days from the date of conviction.
An employment agency contract involves a contract between two parties where one of the parties (the employment agent) procures the services of a person for a client. The relevant test is whether the employment agent provided individuals who would comprise, or who would be added to, the workforce of the client for the conduct of the client's business.
As we discussed in Coelho v FCT [2020] AATA 2474, different tax rates apply to residents and non-residents. Further, under Pt III of Sch 7 to the Income Tax Rates Act 1986, a working holiday maker pays tax at 15% on the first $37,000 of income in Australia. Commonly referred to as the ‘backpacker tax’.
An individual in Australia for more than 183 days for an income year, whether continuously or intermittently, is an Australian tax resident unless the Commissioner of Taxation is satisfied the individual’s usual place of abode is outside Australia and the individual does not intend to take up residence in Australia.
