The High Court decides in MBI Properties

On 3 December 2014 the High Court handed down its decision of Commissioner of Taxation v MBI Properties.

The earlier decision of the Full Federal Court had created significant confusion within the property industry. Pleasingly however, the High Court’s decision has removed this confusion and resulted in a return to the generally accepted GST consequences for sellers and purchasers of properties sold subject to a lease (known as a reversionary interest). continue reading

Partnership basics

Partnerships are an unusual animal under the tax law. Under that law, a partnership includes not only an association of people who carry on a business as partners (the general law partnership) but also includes persons in receipt of income jointly (a tax law partnership). This means that owning a rental property or shares jointly causes a partnership to exist.

In the event that an arrangement gives rise to general law or a tax law partnerships, what tax obligations arise as a result? continue reading

A promise to provide a service can be a GST taxable supply

Commissioner of Taxation v Qantas Airways Ltd

For many people, making a reservation for air travel is as simple as logging in to an airline’s website and choosing the flight that suits their needs. But how many people actually understand (or, for that matter, read) the terms and conditions associated with their reservation; does the average person know what they are buying when they enter their credit card details at the end of the transaction? One might assume that the airline, in accepting a booking, is making a promise to carry the passenger and baggage on a particular flight.

However, the High Court, in delivering its recent decision in Commissioner of Taxation v Qantas Airways Limited, determined that Qantas’s terms and conditions actually promised something less. continue reading

GST and the Supply of a “Going Concern”

The sale of a business may be a supply of a going concern and therefore GST-free.  The concession can assist in providing cash-flow and stamp duty savings to purchasers of businesses.

The cash-flow benefit is the saving to the purchaser in not having to fund the GST payable on the purchase price of the business (although in most cases this GST would be recoverable as a GST input tax credit in a subsequent BAS). The stamp duty benefit of the concession is that duty is calculated on the sale price without GST. continue reading

Not-for-profits and Salary Packaging | Pay-rises for staff, at no cost to the Employer

Recent Federal Budget announcements will affect the fringe benefits tax (FBT) concession available to employees of not-for-profit entities (NFPs).

With the FBT rate increasing to 47% from 1 April 2014 and 49% from 1 April 2015, the Treasurer announced that the $30,000 cap for concessionally taxed benefits will also increase to $31,177 from 1 April 2015 ($17,667 for hospitals and ambulance services). Given these changes this is a good time to review your staff’s salary packaging options. continue reading