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Employment Essentials - 2nd Edition

Employment Essentials - 2nd Edition

This month we bring you the latest newsletter from the Employment, Industrial Relations & OHS team, Employment Essentials.

Employment Essentials reports on topical issues in HR and brings you the latest updates in employment law. Plus much more.

If you would like further information, want to ask a question or subscribe to receive Employment Essentials via email, contact us at employmentessentials@sladen.com.au.

If you would like further information, want to ask a question or subscribe to receive Employment Essentials via email, contact us at employmentessentials@sladen.com.au

Sladen Snippet - The Fair Work Ombudsman targets Accountants

Sladen Snippet - The Fair Work Ombudsman targets Accountants

A Melbourne accounting firm is being prosecuted by the Fair Work Ombudsman (FWO) for its alleged involvement in the underpayment of two Taiwanese backpackers working for one of its clients, who operated a fast-food outlet.

The accounting firm provided payroll services for its client.

According to the FWO, the workers were paid a flat rate of $16.50 an hour, which was below the minimum hourly rate payable to the workers under the Fast Food Industry Award 2010 (Award). The workers were also not paid a casual loading or penalty rates when they worked on weekends, evenings and on public holidays. In just a little over 6 months, this resulted in an alleged underpayment of $9,549.

Sladen Snippet - Sladen Legal Principal, Daniel Smedley, named one of Australia's Best Lawyers

Sladen Snippet - Sladen Legal Principal, Daniel Smedley, named one of Australia's Best Lawyers

On February 26, 2016, the Australian Financial Review named Sladen Legal Principal, Daniel Smedley as one of Australia's Best Lawyers of the Year in the taxation practice area.

The list is compiled by United States peer-review company Best Lawyers from close to 700,000 evaluations, and 2,870 lawyers were chosen from more than 280 law firms nationwide.

Sladen Snippet – non-commercial LRBA loans must be rectified with effect from 1 July 2015

Sladen Snippet – non-commercial LRBA loans must be rectified with effect from 1 July 2015

In our previous Sladen Snippet, we confirmed that the Australian Taxation Office (ATO) will not take active steps to review non-commercial limited recourse borrowing arrangement (LRBA) loans prior to 30 June 2016, but that such LRBA loans should be put on arm’s length terms by 30 June 2016. If that occurs then the ATO has stated that it will not actively review such non-commercial LRBAs in prior years.

Sladen Snippet - Capital proceeds vs “market” value for the Maximum Net Asset Value test

Sladen Snippet - Capital proceeds vs “market” value for the Maximum Net Asset Value test

In Miley and Commissioner of Taxation, the Administrative Appeals Tribunal (AAT) held that, for the purposes of the maximum net asset value (MNAV) test in s 152-15 of the Income Tax Assessment Act 1997, the market value of the taxpayer’s shares was not his share of the sales proceeds ($5.9 million), but the actual market value of his shareholding in the company just before the share sale.

Sladen Snippet - New Tax Incentives for Start-up Investors – Consultation Paper

Sladen Snippet - New Tax Incentives for Start-up Investors – Consultation Paper

On 15 February 2016 the Federal Treasury released a consultation paper on new tax incentives for early stage investors, which is part of the National Innovation and Science Agenda (NISA) announced by the Government on 07 December 2015.

The Treasury has indicated that the new tax incentives for start-ups will provide investors with:

  • a 20 per cent non‑refundable tax offset based on the amount invested either directly in the qualifying startup or indirectly through a fund, up to an offset cap per investor of $200,000 per year;
  • for direct investment, a capital gains tax (CGT) exemption on those investments, provided they are held in the qualifying company for at least three years; and
  • for indirect investment through a fund, a CGT exemption on distributed capital gains provided the underlying investment was held for at least three years.

Asset Protection Strategies

Asset Protection Strategies

On 16 February, 2016 Sladen Legal delivered a presentation on Asset Protection Strategies.

Topics presented were:

  • Protecting distributions, gifts and loans including the use of gift and loan arrangements – by Rob Jeremiah;
  • Super contributions and asset protection – including the bankruptcy clawback rules – by Phil Broderick;
  • Secured intra-family group loans and the Family Court – by Daniel Smedley.

Handouts from the presentation are now available to download.

Further information on SMSFs and Asset Protection are available from a presentation delivered by Phil Broderick, on SMSFs and Asset Protection, as part of the Television Education Network’s 3rd Annual Asset Protection Conference, on 15 October 2015.

Small Business Restructure Roll–Over and Discretionary Trusts

Small Business Restructure Roll–Over and Discretionary Trusts

The Tax Laws Amendment Bill (Small Business Restructure Roll–Over) Bill 2016 (Cth) (the Bill) was introduced to Parliament on 4 February 2016. 

The Bill amends the Income Tax Assessment Act 1997 (ITAA 97) to allow small businesses to defer the recognition of gains and losses arising from the transfer of active business assets as part of a genuine restructure of their ongoing business that occurs on or after 1 July 2016.

The Bill extends capital gains tax roll-over relief to transfers to and from a range of different entity types, including transfers of assets from a company to a sole trader, partnership or trust. The small business roll-over (the Roll-Over) is in addition to current roll-over relief available for individual sole traders, partnerships and trusts that convert to a company structure (Division 122 and Subdivision 124-N ITAA 97). 

The Trust Structures Guide 2016 (11th Edition) has now been released

The Trust Structures Guide 2016 (11th Edition) has now been released

Sladen Legal is pleased to announce that the 2016 version of the Trust Structures Guide (written by Sladen Legal and published by The Tax Institute) is now available.

The Trust Structures Guide has long been considered to be invaluable guide for professionals advising on structuring and tax matters relating to trusts.

CGT issues when creating and dealing with UPEs

CGT issues when creating and dealing with UPEs

In December 2015, an article written by Sladen Legal's Sam Campbell was published in the Tax Institute’s Journal, Taxation in Australia.

The article discusses the tax issues raised when creating and dealing with unpaid present entitlements by trusts, including CGT issues, which should always be carefully considered before embarking on a proposed transaction.