GST Question 

We are an Australian consolidated group registered for GST with a subsidiary company in NZ. An IT firm (Australian Entity) did some work for our NZ business, and have charged out Head Company for the work but with no GST. Is this correct or should they charge us GST?

Answer

Question about Asset Test

We would like to get your opinion on the interpretation in relation to the active asset test.In particular, we want to confirm how the ">50% period that the property is used to carry on the business" is measured.

Please refer to the following scenario:

Active Asset Test requirements.

1. Taxpayer acquired a property to carry on his business on 21/7/2005 [contract date]. Settlement date was 29/11/2005.
2. Taxpayer commenced trading / carrying on the business immediately.
3. Taxpayer ceased his business on 1/12/2011 but kept the property.
4. Taxpayer demolished the property and sold vacant land on 31/10/2017 [date of contract].
5. According to my understanding, the test period according to s152-30 is 4486 days being the time from acquisition 21/7/2005 to the date of the CGT event 31/10/2017]?

To work out whether the building qualifies for the SBE CGT concessions, the asset needs to be an active asset.If the entity owned the CGT asset for less than 15 years, the CGT asset has to be an active asset for at least one-half of the test period and the entity uses the asset, or holds it ready for use, in the course of carrying on a business.

What is the active asset period used in carrying on the taxpayer business?

1. The days from 29/11/2005 (settlement date) to the date the taxpayer ceased business on 1/12/2011?Total active asset period is 2194 days. OR
2. The days from acquisition of the property 21/7/2005 (contract date) to date taxpayer ceased business on 1/12/2011? Total active asset period is 2325 days.

We would like your opinion and please provide reference or example (if applicable).

Questions about FBT & staff loans:

1. If you provide a staff loan, then you must charge the FBT benchmark rate of interest to avoid any FBT liability?
2. If you provide a loan to staff to buy shares as an investment, will the interest be "otherwise deductible" for FBT purposes?
3. Does it make any difference if the shares are in the employers’ company?
4. If "otherwise deductible", can the interest cost be Salary Sacrificed with no FBT applying?  

Question:

I have a question regarding GST on the sale of advertising space to a non-resident entity and whether this qualifies as a GST Export – even if the advertising space is in an Australian medium (e.g. publication etc).

According to what I have read (thus far), it would seem the provision of advertising space would not represent work physically performed (as the advertising space will only display the completed ad provided to the supplier of the advertising space), nor is it in regard to real property (i.e. not related to land) – but is this correct if the sale concerns a specific/individual advertising space?

The supplier is selling the advertising space to a non-resident entity not registered in Australia (nor having a branch or agent in Australia). That non-resident customer may, in turn, on-sell the space to a client who may or may not be registered in Australia for GST, but such a sale would be under a separate contract.

The material I have read thus concludes that it should be GST free. Can I get a second opinion on this?

Question:

My client has a company YellowX Pty Ltd.

John is a director and shareholder of YellowX Pty Ltd.

YellowX Pty Ltd has a liability to pay John of $100,000. I.e. a Credit Loan of $100,000.

YellowX Pty Ltd will never have the funds to pay back John.

What are the implications if, and how does the loan get written off?

Is there no issues to Yellowx Pty Ltd? Is it a capital loss to John?

If John forgives the loan, and does not claim a loss, does the loan in YellowX Pty Ltd have no implications?

Question:

We have a client that has a trust with a corporate trustee.

The business is a family business, with father and son and their spouses working in the business.

The father is 76. He works in the business, full time, and gets a wage.

I believe the employer can only claim a deduction for superannuation up to 9.5% (SGC). The amount that is salary sacrificed is not deductible to the employer.

Is this correct?

Question:

I have a quick question.

I have recently been engaged by a client for casual tutoring services. (18 hours /week).

I travel 3 days per week from my office to the University Campus. The distance is approx. 103klm. I intend using a log book and claim "cents/kilometre" method. A flat rate of $0.66/klm??

Could you advise if I am doing this correctly?

QUESTION

In 1984 we bought a small grocery store unable to pay its lease commitment, from that we grew and expanded. We bought land and built a 700sq m building in 2003 and started trading in the new building in 2004. We transferred the existing business to the new building, for family reasons we sold the business paid the loan on the building, formed a family trust and a Company to operate the trust. The lessees paid lease payments into the trust which distributed its funds in accordance with the trust deed. The trust owes the wife and myself approximately 1 Million $. We did not claim or have received interest payments on the money. Our financial situation has changed considerably early this year.

The lessee went very badly, we exercised the landlord’s right, re-entered the building, spent our funds and borrowed money, and our time without pay to re-establish the business and sold the business to new lessees on the 28-08-2017 on a 10 years lease.

We repaid borrowings to the bank. Because of our changed finances, can the family trust repay part or all the money owing to us without us having to pay tax on that money?

Asset protection issue 0088 on page 9, question 5 you address a similar case, our accountant does not share that opinion. Your answer and direction will be most appreciated.