Question: Victoria Jackson is a 55-year-old interior decorator who works for herself and isn't registered for GST. She submitted her income tax return for 2015/16. In 2016/17, her national taxable income was $48,000, which includes a $2,000 donation and a $500 fee to a tax agent. She also paid $1,850 to a private health fund starting from December 1, 2016. Can you figure out her PAYG instalments for 2016/17?
Client: My client travels a lot for work as an executive regional chef. Their employer covers their accommodation costs, but they have to pay for their own meals. Can they claim meal expenses based on the ATO's reasonable meal amounts, even if their payment summary doesn't show any travel allowance?
Client: A private company owned a large piece of rural land. They sold part of it before under a special tax rule for farmland. Now they're planning to subdivide the rest into two parts: one big and one small with an old, unusable house and some farm equipment. The small part has never been used. Here are the questions:
Q: A shareholder own shares in a private company. Three-quarters of those shares were issued to the shareholder when the company was formed. The other shares came from the acquisition of the shares of an outgoing shareholder many years later. The shareholder wishes to sell some but not all of their shares. The issue is that disposal of the shares acquired on issue would not have a CGT cost whereas if any part of the disposal was attributed to the later acquired shares, there would be a CGT cost.
Question: A client of ‘A’ company installs underground fiber-optic cables for internet services in new industrial areas. These cables, which are owned by the client, last about 20 years. Previously, the costs for digging and installation were treated as blackhole expenditures, which is typically a last resort category. However, ‘A’ company thinks these costs should be categorized under Division 40, which deals with depreciable assets. Should these costs be treated as blackhole expenditure or fall under Div. 40? Are these costs considered day-to-day expenses (revenue) or long-term investments (capital)?
Answer: These digging and installation costs are not day-to-day expenses because the benefits from the installed cables last many years; therefore, these are long-term investments, or capital costs. The main issue is whether these costs qualify for tax deductions under Division 40 as capital allowances or if they should be considered blackhole expenditures. It seems clear that these costs should qualify under Division 40 as they are necessary for preparing the cables for use, making them part of the second element of cost in this tax division. The second element includes any spending required to get a depreciable asset ready for use, like the installation costs for these cables.
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Question: Mr. A runs a mortgage broking business through a company with his wife. The company hasn't registered for GST because its turnover is below $75,000. Now, Mr. A is also driving for Uber using the company's ABN but owns the car himself. Does the company need to register for GST now that it's earning from Uber? And does it need to charge GST on its mortgage broking services too? How can the company claim car expenses and GST for Uber driving, and can it pay Mr. A back for those expenses?
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