Question 1

Hi, I have a client that has a question surrounding Australian Tax Residency. His circumstances are as follows:

• Had been an Australian resident since birth
• In 2007 he moved to Indonesia permanently with his spouse & 2 children
• They rented out their Principal Place of Residence for 2 years & then sold it
• In 2012 he split with his wife. His wife & 2 kinds then moved back to Australia
• In 2014 he had a child to his new partner in Indonesia
• In 2016 he started a company in Singapore. (While still living in Indonesia)
• In 2016 he purchased a property in Australia to use when he returns to spend time with family & kids
• In 2017 his Singaporean company obtained some contracts in Australia, which sees him returning to Australia more frequently (But less than 183 days per year).

My questions are: is he an Australian Tax Resident? – If so, at what point? –If not, other than physically moving back to Australia, what would cause him to become a tax resident? Thanks

Mid-Year Industrial Relations Update July 2017

National Wage Increase

Australia's lowest-paid workers will get a $22-a-week pay rise after the Fair Work Commission lifted the national minimum wage to $694.90 in the decision made on June 6, 2017.

The Fair Work Commission has lifted the wage by 3.3 per cent - an increase of 59¢ an hour to $18.29 an hour.

This decision was influenced by the fact that inflation hit 2.1 per cent in the year to the end of March, according to the most recent official consumer price index.

QUESTION 

I am emailing with regard to a tax question. During a storm, sheds were damaged. A payout was received from the insurance company. The payout and other money were used to purchase/build another shed. Is it correct that we are to be taxed on the difference between the payout and the depreciation value?

Question

Our client resigned from his job on the 1^st August 2016, his shares in the company who employed him were then sold. The shares are valued on the 1^st April every year. The Company has stated the “sale date” on the share valuation as at 1 April 2016. We feel the capital gain event occurred on the 1^st August when he resigned so should be included in the 2017 tax return. Please confirm our thoughts on this.

The proceeds from the above sale will be distributed to the client over 20 quarterly payments. As the company is based in New Zealand the payments will be dependent on the exchange rate at the time of payment. Should the capital gain be calculated at the 1August 2016 and paid with the 2017 tax return in its entirety or should the capital gain be calculated every quarter and paid over five years? Your answer to the above two questions will be greatly appreciated.

QUESTION 

 Hi, I run an online business from my home. I am the owner of the property. There is one room dedicated for the business, which is around 12 % of the home covered area. I also have other dedicated places where I have placed a file cabinet, a computer server and another desk that is used as part of running the business. How much can I deduct as an office rental for my accounting perspective. Thanks.

QUESTION

Hello, I have a client whose Family Trust owns a house. No RENT received. To date we have been capitalising the expenses for this house. Water, council, land Tax, etc. when the house is sold are the expenses capitalised taken into account for CGT purposes or are they ignored. E.g. house bought $350,000 sold less fees $450,000 = $100,000 capital gain. If $30,000 in unclaimed outgoings, do they reduce the profit to $70,000 or are they ignored. If ignored I assume they form part of beneficiaries distribution.

QUESTION

I have a client who has had a property for 19 years and the last 4 years it has been rented. She is about to sell the property and is wondering the best way to account for the capital gains.

Industrial Relations Update 2017

Penalty Rates and Loadings

On Thursday 23 February, 2017 the Fair Work Commission handed down its long awaited decision on penalty rates.

The decision reduces the overtime payments to staff employed in the Hospitality, Retail, Fast-food and Pharmacy industries.

The decision has determined that the penalty rates in these industries will be changed to:

Question

In June 1985 we agreed with a commercial company to buy a vacant block and build a warehouse upon it to their specific requirements and lease it to them upon completion. On 3/07/1985 we signed a contract for the land. On 05/07/1985 the company gave to us their “Letter of Intent” to lease and on 21/08/1985 they paid deposit into our solicitor’s trust account as acknowledgement of their intention to sign lease upon completion of warehouse construction. Between 03/07/1985 and 30/10/1985 we proceeded with engaging an architect to draw plans, lodge at council and await approvals. Actual construction i.e. digging of foundations commenced early November ’85. We are now wishing to sell this property and would like to know if there would be CGT on the building component. The agreement to buy land, and lease to that company had commenced before 20/09/1985.