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The ATO have recently begun reviewing new legislation regarding a trustee’s ability to distribute trust income across family members with lower tax rates.
We initially discussed these rulings with you in our blog post on 28th March. Since then, the ATO have received a significant amount of feedback from Accountants across Australia in regard to a trust operator’s tax planning.
The ATO's acting commissioner, Jeremy Hirschhorn has reiterated that there is no intention to capture "prudent ordinary tax planning transactions" and that if a beneficiary of a trust gets a benefit, then the ATO have no concerns.
However, the latest guidance suggests that the ATO will be looking to apply section 100A to some arrangements that are commonly used for tax planning purposes by family groups. The result is a much smaller boundary on what is acceptable to the ATO which means that some family trusts are at risk of higher tax liabilities and penalties.
Seeding appears to be well underway for most - if not all - of our farming clients across the region. Given ongoing challenges in relation to sourcing staff, I can imagine many of you are feeling the impact of a lot of work to do in a short window of time. For some valuable advice regarding HR and work health and safety during this period, including some vital information on fatigue management, I recommend reading Processworx latest article here.
Finally, in taking a quick look at the impact of international affairs on grain pricing here in Western Australia, it appears as though high canola prices will persist if Canada’s dry conditions continue. The Russia-Ukraine conflict continues to drive global prices upward.
In coming weeks, as we focus on tax planning for our farming families and small businesses across the region, I’ll continue to provide you with strategies for maximising your profits and minimising your taxation obligations in the lead up to June 30. I’ll also begin looking at strategies surrounding cashflow planning as we head into the new financial year.
All the best,
21st April 2022
A surge of inquiries and concerns about looming changes to the way family trust earnings may be taxed has prompted the Australian Taxation Office to seek more feedback from accountants and financial advisors.
Changes to the tax office's guidance may see tougher scrutiny of how some farm family trusts distribute earnings to young adult members as part of strategies which potentially minimise their parents' tax bill.
Agriculture is a unique industry with employment demands driven by peak seasonal periods like seeding and harvest.
At ProcessWorx we understand that the demands on farmers during these periods are high. Human resources and work, health and safety might not be your first priority when preparing your farm for seeding, but having good processes can save you time, money and hassle in the long run.
IN April last year, our analysis showed that Canada was off to a really poor start.
It required a decent drenching to get the crop ticking along.
That rainfall never really came and the Canadian canola crop ended up in an abysmal state.
If you have any questions for me, or would like me to address a topic specifically, please email me directly at melissa@smithshearer.com.au. Alternatively, complete the form below and I'll be in contact.
If you find this newsletter valuable, please forward it on to your agribusiness contacts.
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