FBT Question

Posted On: Thursday, January 19, 2017

 

Question

Could you please advise whether an individual or trust claims depreciation and loan interest paid where a vehicle is owned by an individual, however the business is operated through a trust. Reference to rulings would also be appreciated.

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Holiday Makers Tax Arrangment

Posted On: Thursday, January 05, 2017

 

Question

It is about working holiday maker’s tax arrangement. ATO recently stated a 19 per cent tax rate started from 01/01/2017. Could you tell me on which tax rates can be applied for them for the period between 01/07/2016 and 31/12/2016?

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Long Service Leave Question

Posted On: Monday, December 12, 2016

 

Question

Can an employee cash in Long Service Leave?

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Tool Allowance Question

Posted On: Friday, December 02, 2016

 

Question

Can an employee salary sacrifice their tool allowance to purchase tools used at work?

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Corporate Events FBT Question

Posted On: Wednesday, November 23, 2016

 

Question

Corporate boxes/corporate events (i.e. golf day) and travelling employees - can I please confirm that travelling employees are not exempt from FBT for either of the above examples?

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INDUSTRIAL RELATIONS UPDATE – September 2016

Posted On: Friday, September 09, 2016

TAX SMART IR UPDATE

 

New Rules on Annual Leave for Employees Covered by Modern Awards

There have been some recent reforms to the modern award system which applies to all employers covered by the Fair Work Act 2009 (Cth) in relation to the taking and using of leave by employees.

The reforms are the result of lengthy debate in the Fair Work Commission and will provide an increased level of flexibility for both employers and employees where the taking of leave is concerned.

Most mainstream awards covering approximately 1.3 million employees have had these new provisions added.

The changes took effect from 29 July 2016 and they cover:

Cashing out of annual leave -where as long as the following conditions are met an employee may cash out some of their annual leave entitlements;

  • A signed written agreement which specifies the amount of leave to be cashed in, the payment to be made to the employee, and the date the payment is to be made, must be made on each occasion between the employer and the employee
  • The employee must retain a balance of at least four weeks’ annual leave after cashing out any annual leave
  • The amount of leave that can be cashed out at any one time during a 12-month period is a maximum of two weeks’ leave

Managing excessive annual leave balances - excessive annual leave determined under these new rules is at least eight weeks leave (or ten weeks for a shift worker).

Where an employee has accumulated excess leave and no agreement can be reached over the taking of this leave after genuine attempts to reach agreement, the employer can now direct the employee in writing to take annual leave at a future date to be set by the employer.

Under these circumstances at least eight weeks’ notice or more (but not more than twelve months) must be provided to the employee of when the leave will commence.

The employee must retain at least six weeks of paid annual leave after the directed leave is taken.

The employee cannot be directed to take less than one week’s leave.

Taking of annual leave in advance - employees covered under these new provisions may be able to take annual leave before it has been accrued where the employer agrees in writing to this request which contains how much annual leave is being taken in advance, when it will commence and the signatures of both the employer and employee.

Payment of annual leave - Most modern awards previously stated that annual leave had to be paid in advance before the leave commenced.

Under the new provisions an employee who is currently paid by electronic funds transfer may continue to be paid during their normal pay cycle during their annual leave.

General-

As with any new changes to the modern award system it is important to closely adhere to all of the conditions attached to the amendments and to ensure that all of the required conditions are met when using these new provisions.

Not all modern awards have been varied and there are still deliberations continuing over the application of these award changes to the maritime and black coal awards so it is important to check if your award has been varied by visiting the Fair Work Commission website.

These amendments will provide more flexibility to both employers and employees where the taking of annual leave is concerned and it will allow employers to reduce excessive leave balances which can continue to grow and increase in accruals that must be accounted for and costed each year.

A summary of this decision entitled 4 yearly review of modern awards - Annual Leave AM2014/47, 2016 FWCFB 3177 is available on the Fair Work Commission website.

National Wage Increase – Additional Information

As you should all be aware by now, the FWC awarded a National Wage Increase of 2.4% taking effect from July 1 2016.

Some points to note in regards to this increase and its effect on employee rates of pay are:

1.Check your applicable award for the new weekly rate

Do not rely on a true addition of the percentage rise – the FWC will mostly round weekly figures up, e.g. the old rate of $714.60 x 2.4% = $17.15 + $714.60 = $731.75, however, the FWC has put the new weekly rate at $731.80

Whereas, the old weekly rate of $764.90 is now $783.30 ($764.90 x 2.4% = $18.37 + $764.90 = $783.26, rounded to .30c).

There are also instances of rounding down, e.g. one weekly rate rounded down by one cent to equal $799.00 instead of $799.01.

2.Allowances may also rise

Be aware that allowances may also rise, particularly those that are paid as a percentage of the Standard rate.

As a result of the wage increase, the applicable standard classification pay level will increase, therefore any allowances based on this Standard Rate will also rise.

Some examples of these allowances are: First Aid Allowance, Industry Allowance, Leading Hand Allowance.

At this time, flat rate allowances such as Meal and Tool Allowances, will also rise - you will need to refer to your applicable award for the new rates because these do not seem to increase by the same percentage as the wage increase.

Definitions of Wage Rates:

Base Rate: The flat hourly rate paid after dividing the applicable weekly wage of the award classification level by 38 hours (the average number of ordinary hours a full-time employee works per week) 

Ordinary Rate: The Base Rate plus any applicable loadings/allowances (e.g. 25% casual loading, Industry allowance) = Ordinary Rate. This rate is used to determine the percentage rates of some allowances.

Standard Rate: Based on the minimum hourly wage of a specific classification in your applicable award, (currently $783.30 for this financial year - clerical type awards seem to sit at Lv 2.1), the Standard Rate is used to determine the percentage rates of most allowances. You will need to check the Definition of the Standard Rate in your award to determine which classification is used to set the Standard Rate.

Always remember, when in doubt, refer to your Award, ensuring you have the latest version of the Modern Awards.

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INDUSTRIAL RELATIONS UPDATE – JULY 2016

Posted On: Wednesday, July 06, 2016
INDUSTRIAL RELATIONS UPDATE – JULY 2016
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Super Contributions Question

Posted On: Wednesday, June 22, 2016

 

Question
My query is regarding non-concessional contributions. I am self funded retiree, 70 years old. I made non-concessional contributions up to $450,000 in past years and notice that now the annual cap has increased to $180,000 a year, total $540,000 over three years. Would I be able to make contribution of $300,000 a year for the next three years to bring my total to $540,000?
 
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FBT Question

Posted On: Thursday, June 16, 2016

Question

 

We have a scenario where as part of their contract the Senior Management Team reimburses 40% of the total expenses of the vehicle to Council through salary sacrifice towards their motor vehicle and they have full private use and their vehicle is not a pool car.
In the above scenario does the employer have to pay FBT on those vehicles? If so, do we need to deduct the Manager’s contribution from Gross Taxable Value to arrive at right Taxable value for FBT calculation?
 
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CGT Question

Posted On: Monday, June 06, 2016

Question:

 

My question regarding trust distribution relates to a discretionary trust that makes a capital gain on the sale of a negative geared rental property, but has carried forward losses from the negative gearing.
Example: In 2016 the Trust will sell a rental property for a $100,000 gain (before discounts), have a rental loss for 2016 of $2,000 and has a $80,000 carried forward trading losses from previous years (due to the negative geared rental property). Assuming the property is owned longer than 12 months and is eligible for the 50% general discount and that one adult beneficiary will receive the accounting a taxable distribution:
•What is the Taxable Distribution from the trust for the 2016 financial year or is it $100,000 - $2,000-$80,000 and then apply any discounts;
•Or is it $50,000 ($100,000 less discount) - $2,000 carried forward losses up to $48,000 to make taxable income $0.
•What is the Accounting Distribution from the trust for the 2016 financial year?
•Are there any other considerations to be aware of?
•How would the above change if the gain was $200,000?
 
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