Welcome to our specialised Tax newsletter. For more updates, like us on Facebook. There is a ‘Like’ button just over there to the right below the list of blog posts!
Prime Minister and Cabinet (“PMC”) submission
CABEL Partners have made a submission to a public review by the Register of Cultural Organisations (“ROCO”). We made this submission in order to achieve simplification and cost saving for our not for profit clients.
To gain registration on the ROCO, approved cultural organisations must conduct cultural activities for a “principal purpose” such as, the promotion of music, literature, visual/performing art etc.
CABEL Partners considers that there is uncertainty as to which body is to be tested for this “principal purpose” – is it the entity or the fund that the entity operates.
If it is the entity then this means that this entity can not undertake any other activities, otherwise it will lose the requisite “principal purpose”. Whereas, if the fund (e.g. division or bank account) is tested for the requisite “principal purpose” then the entity can conduct other activities and funds as well. This means one entity can conduct numerous other tax deductible funds.
It is expected the review will be completed by the end of October 2011.
Safe Negative Gearing – Phil Browne
I have been struggling with the concept of whether negative gearing is good for my clients and me. The answer is found in last Sunday’s Sun Herald; my source of all information along with A Current Affair and Wikipedia.
The answer it seems lies outside tax and in that other three letter word (probably the only other three letter word which isn’t a TLA) sex.
It seems the answer is that if negative gearing results in you earning less than $88k then this is going to be bad for you. But if your net income is above this amount all is good and by having a property you will continue to please the bank manager and the real estate agent. I now have a new (non-tax) threshold to speak to clients about.
This did lead me to go to our own 2010 tax returns (done almost late of course) and oops I find that moving office, having a tenant vacancy, changing names and taking on a partner (ambiguous isn’t it) have caused me to be below the threshold. But save the sex; Cathy doesn’t know what the taxable income was (who actually reads their tax return) , so all is safe for now.
I will be quickly checking with John my business partner (that’s clearer) how we went in 2011 and if there are any concerns with the threshold, I will be asking him to find some more income , quickly. You never know Cathy might read her tax return this year.
So back to the point at hand. There are lots of issues to think about when contemplating negative gearing, not just tax! By the way a TLA is a Three Letter Acronym – ask my staff!
Residency Case
CABEL Partners have been busy of late testing the bounds of tax residency law. ON behalf of a client, we are taking a case to the Administrative Appeals Tribunal (“AAT”) which will determine whether our client is a resident of Australia for tax law purposes. This case has significant precedent value. If a favourable result is achieved our client will be able to access lower marginal tax rates (for residents) and the $6,000 tax free threshold.
As we are testing the current policy of the ATO there is only status quo, or positive to be gained. If successful the case may be appealed by the ATO as it will have wider application to many other tax payers.
U.S. Property, Interested? Joel Xuereb, BEX Financial
With the Australian stock-market and property market flat, low risk high income generating investments are short on the ground. However, there has been growing interest in investing in the U.S. Property market due to strength of the Australian dollar, bargain prices and high levels of prospective rental returns. As such, we would like to inform our clients with some information regarding such an investment. There are Australian based property consultancy firms that offer the ability to source fully renovated, tenanted and defect free properties in well positioned socio-economic areas in the U.S such New York and the Mid-West marketing prospective income returns between 16.5% and 20% net of ongoing costs. The price of these properties can range in the vicinity of $A200,000 for New York and between $A40,000 to $A50,000 for the Mid West. These property consultancy firms also assist with all set-up, sourcing, compliance, necessary due-diligence, paperwork and post acquisition management arrangements. If there is any interest in such an investment, please let me know.
The next CABEL Tax Talk – 11 August 2011
Coming up on the 11 August at the CABEL Partners North Sydney Office is the next CABEL Tax Talk. This is a 6 weekly event for accountants in practice, solicitors, financial planners and liquidators. The topics this month are as follows:
- What Does CGT Personal Use Asset Mean
- Trust Streaming – Recent Developments
- Capital Loss and Intercompany Loans
- Update On CABEL Partners Matters
If you would like to attend our Tax Talk and you didn’t receive an invitation, please email sandra@cabel.com.au . Spaces are limited.
WHAT’S ON IN SYDNEY?
WINTER FESTIVAL – until 11 August 2011
The Alpine Winter Festivals offers winter activities to satisfy everyone from thrill seekers to culture vultures, young families to the young at heart. Check out the what’s on calendar for information on Sydney Winter Festival events.
HAIRSPARY THE MUSICAL – until 31 December 2011
HAIRSPRAY, the most critically acclaimed Broadway musical to open in Australia in recent times is now playing at Sydney’s Lyric Theatre, Star City for a limited season.
EL CIRCO ! 5 August – 31 December 2011
Slide’s longest running theatrical extravaganza El Circo features aerialists, acrobatic artists, burlesque, magicians, fire breathers and live singers.
Every Saturday Night and selected Friday Night Performances. El Circo is theatre of the unexpected.
