Message from the 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.

Rosheen Garnon

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

(@drohnro) kudos icon +

Sweating the small stuff

Indirect Value Shifting Provisions - Consequential Amendment trending idea

The recovery provision in section 727-250 (all references are to ITAA97 unless stated otherwise) is designed to prevent the operation of the indirect value shifting rules when the gaining entity receives assessable income or a dividend. The issue identified relates to the change of dividends being exempt income to non-assessable non-exempt income in 2004 without a consequential amendment in section 727-250(2).

In summary,... more »
(@testaan) kudos icon 3

Can government fix it

Minor assets write off trending idea

The instant asset write of rules are great for eligible businesses, but larger corporate entities are still having to capitalise and depreciate low value assets for tax that are often expensed for book purposes. At a minimum, it would be beneficial to simply allow an immediate tax write off for minor assets that are expensed for accounting purposes (ie, those that fall below the asset recognition threshold).

Current... more »
(@scott.young) kudos icon +

Can government fix it

Australian Skills Share - Journey out of Covid

There are currently 3.5million Australians receiving the Job Keeper subsidy, and 1.3 Million receiving Job Seeker. Within those 4.8 Million Australians currently displaced, we have a lot of individuals who are highly skilled and educated outside of their occupation.

For example, the below indicates different occupations that if given the Platform, could connect with each other. And either use their primary skills, or... more »
(@penny) kudos icon +

Tell it to the Tax Office

Job Keeper

I wasn't sure where to raise this issue but I think there is a big flaw in job keeper payment and that is that it is being paid to children still in high school doing their HSC who live at home with mum and dad and may typically work only a couple of shifts a week. I know an example of one girl who works 3 hours a week in a coffee shop and is now getting $750 per week because she is over 18. I think to alleviate the problem... more »
(@anita.wildman) kudos icon +

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) kudos icon 1

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) kudos icon +

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) kudos icon +

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) kudos icon +

Tell it to the Tax Office

Superannuation Salary Sacrifice. trending idea

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 »

Voting

4 votes
4 up votes
0 down votes
(@iraspin) kudos icon +

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) kudos icon +

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) kudos icon +

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) kudos icon +

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) kudos icon +

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 »