Money
Issue No. 41 - June/July 2008
Tax: This year’s six hot topics
Former Australian Taxation Office senior executive Gary Martin, now with BDO Kendalls, outlined Six
Hot Tax Topics for 2008 to kick off the Chartered Accountants Business Forum 2008 conference in Adelaide last month.
Gary says his six chosen highlights could easily have been eight or nine as there is much speculation over how trust income should be handled and how GST applies to motor vehicle sales operations.
1. Minor fringe benefits
The FBT minor benefits threshold has been raised from $100 to $300 per individual item and employees can claim unlimited items under $300.
“The minor benefits exemption does not apply to an in-house expense payment, in-house property, in-house residual or airline transport benefits,” Gary says, which will be subject to a general reduction in taxable value of $1000 for FBT years commencing after 1 April 2007.
“The definition has been relaxed and this is a lot more valuable than it used to be,” he says.
But he notes the very significant catch that the ATO reserves the right to decide whether benefits are regular and therefore taxable under section 58P of the Act.
Gary offered examples of minor benefits – gifts and entertainment – in the context of Christmas celebration, both taxable and exempt.
Another example scenario showed how an employee incentive scheme for reaching a sales target could be taxable if the incentive was awarded regularly.
However, staff rewards for performance could be exempt if the reward was occasional and a reward for good work on a vital project.
In essence, any minor benefit which is part of a formal incentive scheme or salary sacrifice arrangement would not be exempt.
2. Dividend payments amnesty
An amnesty to correct improper payments and loans from private companies to taxpayers was another key issue. Under Div 7A of the Act, deemed dividends paid to taxpayers are liable to be taxed. Non-paying...
