New threshold for capital gains withholding

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From the 1 July 2017, all transactions involving the disposal of real property with a market value of or over $750,000, will need the consideration of whether a clearance certificate is required.

Where a foreign resident disposes of Australian real property that has a market value of and over $750,000, the purchaser is required to withhold 12.5% of the purchase price and forward it to the ATO, unless the seller provides a variation. However, Australian resident vendors who dispose of Australian real property with a market value of $750,000 or above will need to apply for a clearance certificate from the ATO to ensure amounts are not withheld from their sale proceeds.

 

ATO warning regarding work-related expense claims for 2017

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Increasing attention is being placed on work-related expenses this tax year.

 

The main message from the ATO was for taxpayers to remember to:

n          Declare all income;

n          Do not claim a deduction unless the money has actually been spent;

n          Do not claim a deduction for private expenses; and

n          Make sure that the appropriate records are kept to prove any claims.

ALP announces potential changes to trust taxation

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Bill Shorten, The Leader of the Opposition, has announced that if Labor Government were to be elected, they will introduce a standard minimum 30% tax rate for discretionary trust distributions to 18 years and over.

The ALP recognises that many individuals and businesses use trusts for legitimate reasons, for instances business succession and asset protection, it is targeting those that use it purely for tax minimisation.

Labor’s policy will only apply to discretionary trusts, so other trusts – such as special disability trusts, deceased estates and fixed trusts – will not be affected by this change.

Labor’s policy will also not apply to farm trusts and charitable trusts, and other exemptions will apply, such as for people with disability (the Commissioner of Taxation will be given discretionary powers to manage this).