5 minute tax updates: October 21 – 25

Tax agents are not “abusers” of the tax system
SMSF status report
No discount capital gain after share disposal post roll-overs
Redundancy concession age aligns to pension age; Farmer, tourism LCT refunds; Interest on ATO super
Disclosing business tax debt
Anti-money laundering amendments introduced
Bankstown target of Black Economy taskforce
ATO giddyup on October TBC documentation
FASEA guide to adhere to looming code of ethics
AUSkey to be decommissioned soon, so get ready for myGovID
Jail for illegal early access via SMSF

Tax agents are not “abusers” of the tax system
News editor at online publication Accountants Daily, Jotham Lian, writes that the TPB’s plans to target those it labels “high risk” tax practitioners who “overclaim” work expenses are misguided. He spoke to Tax & Super Australia’s tax counsel John Jeffreys.

SMSF status report
The ATO’s Self-managed super fund quarterly statistical report – June 2019 is now available. Highlights include that there are now more than 1.125 million SMSF members, 599,678 funds, a total estimated asset total of $748 billion. Average assets sit at $1.3 million per fund, and $679,000 per member.

No discount capital gain after share disposal post roll-overs
The Full Federal Court has dismissed an appeal where trustees sold shares and made capital gains (with various roll-overs before sale of the shares) whether the appellants were entitled to a “discount capital gain” under Subdiv 115-A of ITAA97, and whether the relevant provisions operated such that the trustees could be deemed to have held assets for at least 12 months.

Redundancy concession age aligns to pension age; Farmer, tourism LCT refunds; Interest on ATO super
A bill to align genuine redundancy payments and early retirement scheme payments with the Age Pension age has passed both houses and is set to become law. Treasury Laws Amendment (2019 Measures No.2) Bill 2019 means that concessional tax treatment will be afforded those made redundant or retiring before pension age, applying from 1 July 2019.

The bill also increases luxury car tax refunds for eligible primary producers and tourism operators up to a cap of $10,000 (also from 1 July), and allows payment of interest on ATO-held super that is reunified with a taxpayers super account (applying one day after Royal Assent).

Disclosing business tax debt
As noted elsewhere on this website, the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019, has passed through both houses with Senate amendments approved. Within this bill is a measure that will allow ATO officers to disclose tax debt information to credit reporting bureaus where certain criteria are met.

An example of this is a business that has owned at least $100,000 in tax for more than 90 days with little or no engagement with the ATO to deal with the debt. At present it is an offence punishable by up to two years in prison for an ATO officer to disclose “protected information”. The change relieves officers of this but they must notify the taxpayer 21 days prior and consult with the IGT.

Anti-money laundering amendments introduced
Legislation just introduced to Parliament contains a range of measures to strengthen Australia’s capabilities to address money laundering and terrorism financing risks, and generate regulatory efficiencies.

These include, among other amendments, expanding the circumstances in which reporting entities may rely on customer identification and verification procedures undertaken by a third party, and to explicitly prohibit reporting entities from providing a designated service if customer identification procedures cannot be performed.

Bankstown target of Black Economy taskforce
A spike in tip-offs from the public has spurred the ATO to send its Black Economy taskforce swarming over Bankstown in Sydney’s inner west. The ATO says about 400 businesses are to be visited.

Accusations include paying staff in cash, not withholding tax, not paying the superannuation guarantee, refusing to provide tax invoices for sales and not declaring some income. Also uncovered is a high incidence of overdue tax returns (some for two years) and outstanding activity statements.

ATO giddyup on October TBC documentation
The ATO has reminded SMSF trustees/members that excess transfer balance determinations and commutation authorities issuing in October will have a due date that falls during the Christmas/New Year period.

It is therefore encouraging trustees to respond early to this correspondence to avoid adverse consequences, such as being able to respond to excess transfer balance determinations or timely actioning of commutation authorities.

Note that quarterly TBAR lodgement is due 28 October, and that spreadsheet lodgement will not be available from 1 November onwards.

FASEA guide to adhere to looming code of ethics
The Financial Adviser Standards and Ethics Authority has issued a guide to help stakeholders in understanding, interpreting and applying its code, which comes into effect on 1 January 2020. The code is a compulsory code of ethics for all relevant providers who provide financial services to retail clients. It also applies to provisional relevant providers.

AUSkey to be decommissioned soon, so get ready for myGovID
Practitioners have been reminded by the ATO that they should prepare for the loss of AUSkey in the near future, from 31 March 2020. Replacement services will be myGovID and the closely tied Relationship Authorisation Manager (RAM).

Jail for illegal early access via SMSF
A 51 year old Sydney man has been given a three year custodial sentence for setting up a scheme to get early access to superannuation savings. Rollovers were made to an SMSF called Tot Form Super Fund totalling about $700,000, with the operator of the scheme keeping a significant amount, which he told clients went as “tax”.

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