The Kratzmann case, while often cited, doesn't serve as a reliable precedent for many taxpayers. Here's why:

Some people disagree about whether a taxpayer can give up on a plan to make money. They point to statements from previous court cases like Westfield v FCT and Myer's case. These statements suggest that if a transaction is not part of the usual business and the profit wasn't made in the intended way, then it might not be considered taxable income.

In Tax Ruling 92/3, the ATO talks about whether a profit made from selling real estate needs to happen in the way the taxpayer originally planned for it to count as a profit-making scheme. Unfortunately, the ATO's stance is that if a taxpayer aims to make a profit through one method but ends up making it through a different method, it still counts as a profit-making scheme. This means even if someone plans to make money by selling land but ends up making money through something like the government taking the land, it's still seen as a profit-making scheme.

The ATO listed important things to think about when deciding if a property deal is a regular business transaction or just a one-time thing. Here are some examples:

The ATO released TR 92/3 after the Myer's case, which explains when profits from a one-off transaction are considered income (profit-making scheme). According to this ruling, such profits are typically seen as income instead of capital gains when:

Contributions made under the SG amnesty will not cause/increase a Division 293 tax liability

Under the SG amnesty, contributions made won't trigger or increase Division 293 tax liability for employees. Division 293 tax applies when an individual's income for surcharge purposes plus their low tax contributions exceed $250,000. Low tax contributions include concessional contributions except excess ones.

To prevent Division 293 tax liability from SG amnesty contributions:

1. Contributions made by the Commissioner or the employer under the SG amnesty, to offset SGC liability, are excluded from an individual's low tax contribution amounts if the employer qualified for the amnesty (new S.293-30(4)(c) and (d) of the ITAA 1997).

2. This exclusion ensures SG amnesty contributions don't trigger Division 293 tax or increase it for other low tax contribution amounts.

For example:

Tom's income for Division 293 tax is $240,000, including low tax contributions of $21,000. In June 2020, Tom's employer makes a $60,000 contribution under the SG amnesty to offset their SGC liability. Without the exclusion, Tom's income would increase to $300,000, triggering Division 293 tax liability of $7,500. But since the contribution is under the SG amnesty, it won't be a low tax contribution, keeping Tom's income below the $250,000 threshold.

For further assistance, you can reach out to Tax Ideas Accountants & Advisers at

+61 2 83181545 or book an appointment via live calendar.

ATO's Enhanced Powers: What Employers Need to Know

As the Superannuation Guarantee (SG) amnesty wraps up, the Australian Taxation Office (ATO) is gearing up with more tools to ensure compliance from employers. Here's what's new:

1. Single Touch Payroll (STP)

Employers must now report tax and superannuation info to the ATO through STP whenever they pay salaries or wages to employees, except for limited exceptions.

2. Member Account Transaction Service (MATS)

Under MATS, superannuation funds report contributions received to the ATO through SuperStream. This includes employer contributions, helping the ATO track employer compliance.

3. Direction Orders

The Commissioner can now direct employers to pay unpaid superannuation guarantee, with non-compliance becoming a criminal offense. Employers might also be required to undergo superannuation guarantee education courses.

4. Director Penalty Regime

Directors of companies failing to pay SGC liabilities in full by the due date may be personally liable for the unpaid amount. This applies to SGC liabilities from June 2012 onwards.

5. Security Deposits

The ATO can demand security deposits from entities at risk of ceasing business operations, ensuring future superannuation liabilities are covered.

Implications After the SG Amnesty

If a disclosure is made after September 7, 2020 (the end of the amnesty period), the Commissioner's ability to reduce Part 7 penalties may be limited. Penalties may not be reduced below 100% of the SGC payable if certain conditions are met, particularly if the employer failed to disclose relevant information during or before the amnesty period.

However, exceptions may apply in cases of exceptional circumstances preventing disclosure or for SG shortfalls from April 1, 2018, onwards.

For any questions or assistance, feel free to reach out to Tax Ideas Accountants & Advisers at +61 2 83181545 or book an appointment through our live calendar.