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The Tax Consequences of Inheriting Assets Beyond the difficult task of dividing up your assets and determining who should get what, it’s essential to look at the tax consequences of how your assets will flow through to your beneficiaries.  When assets pass from a deceased individual to a beneficiary of the estate, the tax impact will generally depend on the nature of the asset and the tax characteristics of the beneficiary, such as their residency status.
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Own an investment property or an expensive lifestyle asset like a boat or aircraft? The ATO are looking closely at these assets to see if what has been declared in tax returns matches up. The Australian Taxation Office (ATO) has initiated two data matching programs impacting investment property owners and those lucky enough to hold expensive lifestyle assets.
You login to your myGov account to find that your activity statements for the last 12 months have been amended and GST credits of $100k issued. But it wasn’t you. And you certainly didn’t get a $100k refund in your bank account. What happens now? In what is rapidly becoming the most common tax scam, myGov accounts are being accessed for their rich source of personal data, bank accounts changed, and personal data used to generate up to hundreds of thousands in fraudulent refunds. For all intents and purposes, it is you, or at least that’s what it seems. And, the worst part is, you probably gave the scammers access to your account.
Breaking up is hard to do. Beyond the emotional and financial turmoil divorce creates, there are a number of issues that need to be resolved. What happens when there is a family company?
For couples that have assets tied up in a company, the tax consequences of any settlements paid from the company will need to be assessed. Settlements paid out by a corporate entity can sometimes be treated as taxable dividends and taxed at the relevant spouse’s marginal tax rate. The Tax Commissioner has successfully argued that more than $1.6m deposited in a couple’s bank account was assessable income, not a gift or a loan from friends. The case of Rusanova and Commissioner of Taxation is enough for a telemovie. The plot features an Australian resident Russian couple ‘gifted’ over $1.6m in unexplained bank deposits, over $67,000 in interest, the Russian father-in-law seafood exporter, a series of Australian companies, and the generous friend loaning money in $20,000 tranches.
The main residence exemption exempts your family home from capital gains tax (CGT) when you dispose of it. But, like all things involving tax, it’s never that simple. As the character of Darryl Kerrigan in The Castle said, “it’s not a house. It’s a home,” and the Australian Taxation Office’s (ATO) interpretation of a main residence is not fundamentally different. A home is generally considered to be your main residence if:
What does 24/25 look like for business in Australia? What’s ahead for 2024-25? Will 2024-25 be another year of volatility or a return to stability? Personal tax & super
As you would be aware (at least we hope so after a $40m public education campaign), the personal income tax cuts came into effect on 1 July 2024. At the same time, the superannuation guarantee (SG) rate increased by 0.5% to 11.5%. Investment Properties & Claiming Expenses If you own an investment property, a key concept to understand is that you can only claim a deduction for expenses you incurred in the course of earning income. That is, the property needs to be rented or genuinely available for rent to claim the expenses.
CRYPTO AND YOUR TAX RETURN Over the last few years, we have seen an increase in our clients investing in cryptocurrencies. And now, so have the ATO!
The ATO considers crypto investments as an asset for tax purposes. Transactions involving crypto may be subject to Capital Gains Tax (CGT). If you dispose of any crypto, you may be required to pay CGT on any capital gain. The ATO also requires you to keep accurate records of acquiring the crypto and any other associated costs. UPDATE ON ATO PRIVATE GROUPS TAX PERFORMANCE PROGRAM AND HOW IT MAY EFFECT YOU On 3 November 2023, the ATO announced details about its new audit and review program.
It is called the “Next 5,000 Tax Performance Program”. |
AuthorHansens is a team of accounting professionals that love what we do. The observations and opinions in the articles written here, aim to challenge, inspire and provoke change into making your business better! Archives
February 2025
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