Personal Tax
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    Personal Tax

    ATO to target false laundry claims this Tax Time

    The ATO will take strong actions against false clothing and laundry work-related expense claims this Tax Time. Assistant Commissioner Karen Foat said although many Australians claim clothing and laundry expenses, it is unlikely that half of all taxpayers are required to wear uniforms, protective clothing or occupation-specific clothing to earn their income.

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    Tax changes for 2018/19 for individuals

    A low and middle income tax offset (LAMITO) was introduced on 1 July 2018. The offset will run in conjunction with the low income tax offset as a targeted reduction of income tax for Australian residents.

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    Proposed increase for individual tax offsets

    With the 2019 federal budget, the treasurer announced that the federal government intends to increase the low and middle income tax offset (LAMITO). If enacted, the increase would begin in the current 2018/19 income year.

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    Self-education expenses allowed for ‘part’ of course

    Self-education expenses generally are deductible under ITAA 1997 s 8-1 when two elements are met. The first of which is that the expense is from a “prescribed course of education”.

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    CGT exemption for main residence from deceased estate

    The ATO has released a draft practical compliance guideline providing a safe harbour approach for beneficiaries or trustees of deceased estates seeking to claim the CGT exemption for disposal of a deceased persons’s main residence within two years of their death.

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    Foreign resident capital gain withholding and the tax return

    A credit may be refunded in the relevant tax return if they don’t have to pay capital gains tax on the sale of the property (for example, because it was their main residence).

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    Deceased Estates – Full capital gains tax exemption if dispose of the pre-CGT property within 2 years from date of death

    Did you know of the capital gains tax exemption available for the disposal of pre-CGT properties (originally acquired by the deceased before 20 Sep 1985) within 2 years from the deceased date of death?

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    Tax and residency – arrivals and departures

    The law treats residents and non-residents differently, where residents are taxed on all worldwide income but non-residents are taxed only on Australian sourced income.

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    Car claims to be closely examined by ATO in 2017-18

    Recently, the ATO has issued a point of emphasis for the upcoming tax lodgement season. They will be employing additional audit resources along with updated data analytics to scrutinise large car expense claims.

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    Lump sum payments for healthcare practitioners – Income not Capital Gains

    In the healthcare services industry, it is now common for some practitioners to operate from healthcare centres run by third parties. This frequently occurs without any stated partnership or employment relationship between the third party and the practitioner.

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    Foreign resident capital gains withholding tax

    From 1 July 2017, those who purchase Australian real property or interests in such property valued at $750,000 or more from a non-resident vendor would be obliged to withhold a 12.5% non-final withholding tax from the purchase price and pay this to the ATO.

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    Meals when travelling not work-related expenses

    Recent media releases from the Australian Taxation Office (ATO) have stated that they intend to audit more people this coming year over work-related expenses.

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    Truck drivers' new approach for meal expenses

    Employee truck (and other transport) drivers who have been required to sleep away from home overnight due to work have new rules relating to travel expense claims. These new rules take effect from 1 July 2017, meaning the drivers affected need to make adjustments as soon as possible.

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    Uber drivers' reporting obligation – tax deduction examples

    Are you considering driving your car for Uber to earn extra money on the side? If so, this worked example below will help to illustrate how Uber driving will impact on your tax obligations.

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    Self-education deductions for presentation skills

    Self-education expenses are deductible where the expenses have the necessary connection with the production of the taxpayer’s assessable income. However, a deduction will be denied for the first $250 of certain kinds of self-education expenses.

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    Beneficial ownership extends to real property

    A taxpayer has learned that no capital gains tax event would occur on the transfer of real property from themselves to a family member. A recent private binding ruling highlights that a beneficial ownership of an asset doesn’t solely relate to shares in a company or beneficiaries of trusts and can occur to real property owned by individuals.

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    Events-based reporting for SMSFs

    From 1 July 2017, all superannuation funds, including SMSFs, will be required to report Transfer Balance Cap (TBC) credits & debits to the Australian Taxation Office (ATO) on an ‘events’ basis.

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    ATO warns against incorrect claims for work-related expenses

    The ATO is warning taxpayers to avoid incorrect claims for work-related expenses. Assistant Commissioner Kath Anderson noted that the ATO is using real-time data comparing taxpayers in similar occupations and tax brackets, which will enable them to identify higher-than-expected deductions claims.

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    2016/17 year end – tax changes for individuals

    As 30 June 2017 is fast approaching, we have briefly summarised the important tax changes to remember when collating your tax information.

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    Cleaners' tax deduction guide

    With 30 June fast approaching, we revisit our series on tax deductions for employees in specific industries. We explore the common tax deductions for employees working as cleaners.

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    Travel deductions for rental properties removed

    Deductions for travelling to a residential rental property will no longer be allowable for individuals after 1 July 2017. This removal is for individuals travelling to collect rent, maintain the property or complete an inspection.

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    Foreign resident capital gains withholding rate variation application

    The ATO has updated its instructions to vendors seeking a reduction in the withholding rate that will apply to the sale of certain taxable Australian property. The relevant foreign resident capital gains withholding variation application form provides the details of the vendor, the asset and the reason for a variation. The variation may reduce the withholding rate to nil.

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    Review of tax deduction rules for non-compulsory uniform expenses

    The government has released a consultation paper on its review of the tax deduction rules for non-compulsory uniform expenses. Division 34 of ITAA 1997 provides that employees can only claim a tax deduction for non-compulsory uniform expenses, where employers have the uniform designs approved and entered on the Register of Approved Occupational Clothing by the Secretary of the Department of Industry, Innovation and Science.

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    ATO issues warning on unusually high deductions

    The ATO has issued a warning that they are paying extra attention to taxpayers claiming higher than expected deductions for the 2015/16 income year. Assistant Commissioner Graham Whyte stated that the ATO’s ability to check work-related expense claims has become more sophisticated through use of technology and data analysis.

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    Teachers' tax deduction guide

    Continuing our series on tax deductions for employees in specific industries, the following are common deductions for teachers.

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    Nurses, midwives and direct carers' tax deduction guide

    It’s the start of the new financial year, which means that it’s a good time to review the common tax deductions for employees in specific industries and occupations in order to maximise tax deductions and get into good record-keeping habits at the beginning of the new financial year.

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