Message from the Acting Chair

Welcome to the Sounding Board.

At each of its regular meetings, the Board of Tax considers all new additions to Sounding Board. Although it is not always possible to respond on Sounding Board with the steps the Board is taking in relation to every suggestion, all ideas are actively considered in relation to the Board’s current and future work.

I note that matters raised on the sounding board that have led to substantive work and changes include:

- The FBT compliance review

- Enacted measures related to excess super contributions.

We encourage you to subscribe to Sounding Board, and to join the conversation.

Dr Julianne Jaques

To learn more about Sounding Board and how to contribute, click here.

(@anita.wildman)

Too taxing: reducing red tape

Why cant SBE that are not pooling access the IAWO?

Unless SBE clients are using simplified depreciation s328-180 e.g. pooling they can not access the instant asset write off.

Yet medium sized businesses can access the instant asset write off s40-82.

So what about SBE that have chosen not to use simplified depreciation - they just miss out on the IAWO all together?

The compliance cost of adding all assets to a pool and starting simplified depreciation is a compliance... more »
(@malcolm8)

Can government fix it

Increase the Tax-Free Threshold for small business owners

Increase the tax-free threshold for small business owners on a rising scale up to $120,000 depending on the amount of staff they employ and the amount of GST they generate.
BENEFITS: Owners will be encouraged to show all income as this will improve the bottom line for things like: value of business, getting loans, business more salable.
Reduce the "Black economy".
They will be more likely to employ more staff therefore... more »
(@andra91)

What were they thinking

Anti hybrid rules: related parties in s 832-200

The anti hybrid rules broadly apply to payments between related entities. For most mismatches, whether entities are related is worked out by reference to their participation interest in section 350 of the 1936 Act but excluding any rights to vote or participate in decision-making (section 832-205). However, such rights are not excluded for the purpose of determining participation interest (and therefore whether the parties... more »
(@trudy.hasna)

Can government fix it

Unfair Departing Australia Superannuation Tax Rate

Tax rate of 65% should only be applied only on the period whilst foreign worker is using Work and Holiday Maker visa. It is unfair for those who stayed in Australia for years, yet they got taxed 65% for the whole time they lived in Australia just because they used Work and Holiday Maker visa for some time.

(@chainsaw)

Tell it to the Tax Office

Superannuation Salary Sacrifice.

Ruling needs to be made to instruct employers to forward pre tax salary sacrifice to Suoer funds in a timely manner.
Employers do not have any right to hold on to thousands of dollars of my money for months when it should be in my Super fund adding to my retirement benefits.
SG money can be sent each quarter. Pre tax Salary Sacrifice should be sent at the very least each month if not it should be sent to Super fund with... more »
(@iraspin)

What were they thinking

Partial main residence exemption: section 118-205

There is a defect in the way that the main residence exemption applies where ownership of a dwelling has passed through a number of deceased estates.
Some of the most complicated deceased estate cases occur where a dwelling passes through several persons each of whom dies before a sale is made. The complexity arises because if a partial exemption is being determined, then it may not be appropriate to consider the use... more »
(@iraspin)

What were they thinking

Surviving joint tenant cost base

There is a defect in the way that cost base rules in section 128-50 of the ITAA 1997 apply where a dwelling that was the main residence of a joint tenant passes by survivorship to the other joint tenant(s).

For CGT purposes generally, joint tenants are treated as tenants in common: section 108-7 of the ITAA 1997. However that deeming does not override the operation of the 'rule of survivorship' that apply on death.... more »
(@iraspin)

What were they thinking

Cost base of deceased main residence

There is a deficiency in the CGT main residence exemption relating to deceased estates which has a considerable impact on tax compliance costs.

The deficiency is that the market value cost base rule in item 3 in the table in subsection 128-15(4) of the ITAA 1997 does not literally apply where a deceased's dwelling was used to produce assessable income just prior to death, but this would not have affected an exemption... more »
(@iraspin)

What were they thinking

Partial main residence: sections 118-200

There is a defect in the way that the main residence exemption applies if a deceased person's legal personal representative (LPR) or beneficiary is taken to have acquired the deceased's main residence for market value at the date of death: item 3 in the table in subsection 128-15(4) of the ITAA 1997. The defect is that the rewritten partial main residence rules in section 118-200 of the ITAA 1997 fails to incorporate... more »
(@p.m)

Can government fix it

Updating tax laws for changes to accounting standards

There are a number of areas where the tax law has not been updated to reflect the impact of new accounting standards. Two areas that immediately come to mind are:

1. The new leasing standard AASB 16 brings most leases onto the balance sheet. The tax consolidation provisions, for example s705-56 of the Income Tax Assessment Act 1997, make specific modifications for finance leases. These may need to be extended to all... more »
(@kitmorgan64)

What were they thinking

Incorrect CGT small business entity requirement in 328-430

There appears to be a drafting error in subsection 328-430(1)(d)(ii) dealing with small business entity ['SBE'] rollovers. A SBE is defined in section 328-110 as an entity that has an aggregated turnover of less than $10 million, accordingly it should be possible to roll an asset into a SBE using Subdivision 328-G provided the SBE is either an affiliate of or connected with the transferor (assuming the other requirements... more »
(@kitmorgan64)

What were they thinking

152-70 - How can a Trustee hold a legal and equitable interest?

There is an apparent disconnect between the language of Item 1 in section 152-70, which requires an entity to hold a legal and equitable interest in the shares in a company, and Example 1.2 in the Explanatory Memorandum to the Tax Laws Amendment (2006 Measures No. 7) Bill 2006 - which introduced this section.
While Example 1.2 evidences a clear policy intention that a Trust (via its Trustee) can hold a direct small business... more »
(@anita.wildman)

Can government fix it

FBT and Cars - Logbook applies to a car (not employee)

I can not understand why a logbook is assigned to a car, rather than to an employee.
Eg Salesperson uses car for 6mths 90% business, then admin person uses same car for 6mths at 10% business.
Why do we not simply address the provision of each benefit to each employee based on the actual %?
By having to apportion/average the % it is unfair to the salesperson/inappropriate for admin person.
Then it gets more crazy,... more »
(@tanya69) Implemented

Too taxing: reducing red tape

PAYG income instalments - sending to ATO

For payg income instalments, if these are varied and/or it is applicable to choose Option 1 or 2 (due to new income assessment year), the original has to be signed and sent to the ATO by the due date for lodgement . My question is, why in this world of technically and online portals - that this form cannot be digitally signed and uploaded via a link in the business portal to the ATO. Why do we still need to post anything... more »