Do you provide car parking to your employees on your business premises? If the parking meets certain conditions you may have to pay fringe benefits tax (FBT) on those and other benefits you provide to your employees. The ATO has commenced a compliance program that looks at employers that use the market value method to calculate the taxable value of car fringe benefits. Specifically, it is looking at employers that have engaged an arm’s length valuer that has produced reports that may not reflect the market value. The ATO has started contacting certain employers that provide car parking fringe benefits to their employees to ensure that all FBT obligations are being met. Generally, car parking fringe benefits arise where the car is: parked on the business premises of the entity providing the benefit; used by the employee to travel between home and their primary place of employment and is parked in the vicinity of that employment; parked for periods totalling more than 4 hours between 7am and 7pm; and a commercial parking station located within 1 km of the premises charges more than the car parking threshold amount.

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Laws limiting foreign residents’ ability to claim the CGT main residence exemption are now in place. This means that if you’re a foreign resident at the time of disposal of the property that was your main residence, you may not be entitled to an exemption and may be liable for tens of thousands in capital gains tax. Some limited exemptions apply for “life events” as well as property purchased before 7:30pm (AEST) 9 May 2017 and disposed of before 30 June 2020.

Foreign residents beware, laws have been passed to restrict your access to claim the CGT main residence exemption on the sale of your home, except in some limited circumstances. This applies to any person that is not an Australian resident for tax purposes at the time of disposal (ie when the contract is signed to sell the property).

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The new year means more help for first home buyers to get on the property ladder. The new First Home Loan Deposit Scheme came into effect on 1 January 2020 and seeks to provide eligible first home buyers on low and middle incomes with a guarantee so they can purchase a residential property with a deposit of as little as 5%. Currently, only 7,000 places are available with 3,000 having already been taken up, but 10,000 more places will be released in July. Eligibility depends on the financial circumstances of the applicants as well as the property value.With the advent of the new year as well as a new decade, a new measure is now in effect to give first home buyers a leg up on the property market. Starting 1 January 2020, couples that earn less than $200,000 combined, and singles that earn less than $125,000, who have never owned a property and are Australian citizens may apply for the First Home Loan Deposit Scheme (FHLDS). Australian permanent residents will not be eligible, and if you’re applying as a couple, both will need to be Australian citizens.

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Running a business and ensuring your employees are paid the correct super can be difficult and inadvertent mistakes can be made from time to time. Previously, a mistake may not be picked up for years after it occurs, but with the advent of single touch payroll, the ATO now has more data than ever to ensure that the correct super guarantee payments are made and impose penalties where the payments are not correct. So, if you make a mistake, what are the conditions that you have to satisfy to obtain a remission of the additional super guarantee charge penalty?

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Leading up to the 2019 festive season, numerous Bills passed through the parliamentary process and became Acts (legislation); these legislative changes affect a wide range of personal finance areas.Notably, regardless of whether you are a wealth accumulator or retiree, you may find that one or more of these legislative changes are of relevance to your financial situation, goals and objectives, now and into the future.

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What will markets bring in 2020? It has been a tumultuous time for our country and our thoughts go out to those that have lost homes and loved ones due to the bushfires that have engulfed Australia.

Calendar year 2019 saw most asset classes generate very strong returns with many delivering double-digits returns. Australian equities, as measured by the S&P/ASX 300 Index, returned 23.8%, while global equities, as measured by the MSCI World ex Australia Index AUD, returned 27.6% for the year. At the other end of the asset classes spectrum, bonds also posted strong returns with Australian bonds, as measured by the Bloomberg AusBond Composite 0+ Year Index AUD, returning a solid 7.3% for the year. These returns were generated despite concerns over US-China trade tensions, Brexit, arguably high asset prices and mixed economic news.

A key factor contributing to this market strength has been the fact that interest rates appear to be on hold in the US and possibly heading lower in Australia. This is making investing in growth and interest rate sensitive assets, such as property and infrastructure, attractive when compared to holding your money in cash. Additionally, some of the economic indicators that were trending down, such as the PMI (Purchasing Manager’s Index), seem to have stabilised and the consumer seems to be holding up.

In 2020 we are paying particular attention to three key themes …

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In 2018, the ATO issued a controversial draft ruling which took a very strict stance on the four-year time limit for claiming input tax credits and fuel tax credits. The ruling had been used by the ATO to deny input tax credits and fuel tax credits where the Commissioner makes a decision on an objection or amendment request outside the 4-year period. However, a recent observation by a judge ruling on a related matter has put the ATO’s strict stance in doubt and as a result, the ruling has been withdrawn. The ATO has recently withdrawn Draft Miscellaneous Taxation Ruling MT 2018/D1 on the time limit for claiming input tax credits and fuel tax credits. Generally, under s 93-5 of the GST Act, the right to claim an input tax credit expires after 4 years and commences on the day on which the entity was required to lodge a return for the tax period to which the input tax credit would be attributable. Section 47-5 of the Fuel Tax Act has a similar provision which limits claims to 4 years after the date which taxpayers were required to give the Commissioner a return.

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As bushfires continue to rage across the country, support for devastated communities are coming from all sides and the ATO is no exception. It has announced automatic deferrals for lodgement and payments for taxpayers in impacted postcodes in the states of NSW, Victoria, Queensland and South Australia. BAS deferrals up to 21 March 2020 may be available depending on the area and additional postcodes may be added to the list once damage assessments have been finalised. As the bushfires that devastated large swathes of the country continue on their destructive path leaving shatter communities in their wake, there are glimmers of hope with efforts to support and rebuild these communities starting to gather pace. In conjunction with these efforts, the ATO has announced automatic deferrals for lodgements and payments for taxpayers in impacted postcodes in the states of NSW, Victoria, Queensland and South Australia.

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Leading up to the 2019 festive season, numerous Bills passed through the parliamentary process and became Acts (legislation); these legislative changes affect a wide range of personal finance areas. Notably, regardless of whether you are a wealth accumulator or retiree, you may find that one or more of these legislative changes are of relevance to your financial situation, goals and objectives, now and into the future. In this article, part one of a two-part series, we cover legislative changes that fall under the Government’s Health and Treasury portfolios: Health portfolio, The Pharmaceutical Benefits Scheme (PBS) and the PBS Safety Net threshold amounts. Treasury portfolio Super Guarantee contributions and salary sacrificing arrangements, Non-arm’s length income (NALI) and limited recourse borrowing arrangements (LRBAs), and Redundancy and early retirement scheme payments eligible for concessional tax treatment.

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