Medicare Surcharge

James Murphy Tax

A client has a Medicare levy exemption for 339 days. Being a foreign resident and not entitled to Medicare. His taxable income is $190,000 for the whole year. He has no private health insurance. Is he liable for the Medicare levy surcharge? Answer If he is subject to the Medicare levy for only 26 days, the same should apply to …

Self-Education Costs

James Murphy Tax

I have a quick question. Can international students on a student visa claim self-education costs or only when their visa status changes to temporary or permanent? My client has been told by her friends that she can claim her fees, and I said no because she is not working as a nurse, only a personal carer. Only when she starts …

Cost Base Calculation

James Murphy Tax

A married couple purchased a house in Carlton for $481,750 (incl. stamp duty) On 10/8/2000, this house was their PPR until 10/8/ 2010. At that time, they sold a 65% share of the Carlton property to their son and his partner for $550,000. The married couple purchased another property that became their new PPR, which they are still living in. …

Rural Property – Future Set Up

James Murphy Tax

I intend to purchase 200 acres of rural residential property within two years. Hopefully, the family will sell it off in 20 acre lots in 10 – 15 years. My idea is to register Ltd Company to our discretionary trust- holding seven-way membership – 10% self, 20% each for my son and daughter and 12.5% each for 4 X grandchildren. What …

Calculating CGT Liabilities

James Murphy Tax

Can I please get your assistance in this complex matter as my client is considering selling a property he acquired from his father? In this case, my client, the son, entered an agreement with his father to be added on to his father’s principal residency property “title” back in 2011 for $130,000. My client already owned another property at the …

CGT 15-Year Exemption

James Murphy Tax

Hi, this is a CGT query and whether the respective “partners” are entitled to use the small business 15-year CGT exemption and/or contribute the assessable gain into their respective super funds to gain CGT exemption. The respective “partners”, say A & B via partner A’s family trust and B via his private company, each hold 50% of the units in …

Franking Credits

James Murphy Tax

The company has excess franking credits accumulated from payment of tax at a 30% income tax rate and has not previously paid dividends. What franking credit would be applied to a fully franked dividend paid in the 2022 financial year? Answer We assume your company is a base rate entity with a turnover of less than $50 million. As of …

Stamp duty concession

James Murphy Tax

My client received a $7,000 first homeowners grant (FHOG) on his first principal place of resident property purchase in 2010. This property was purchased for $700,000, and full stamp duty was paid as there was no stamp duty concession at the time for first-time buyers (just the FHOG grant). Since this time, he has married, and his wife owns no …

Testamentary Trust – Distributions

James Murphy Tax

Details A client has passed away. Will states cash distributions to the client’s two sisters and the balance to be left to the client’s son as a testamentary trust. Cash distributions to sisters have been paid. Trust has not been set up as yet per the Lawyer. Assets of the estate include: 3 Motor Vehicles BMW Jaguar Aston Martin – …

UPE – Dividends

James Murphy Tax

Further to my conversation about UPE’S, what is the time frame for these dividends to be paid? I was under the impression that the payment had to take place within five years. Maybe I am wrong? Answer There is no 5-year requirement for the dividends. The real issue is the UPE between the discretionary trust and the company. You have a year …