When will land be considered ‘vacant land’? (1)


Deductions: Expenses incurred to keep the business running

Q: I have a sole trader client who has been audited for claiming high expenses. He is registered on an accruals basis. He did a job for a restaurant in the 2015 financial year in which he invoiced but did not get paid (he was required to report it as he invoiced his client). He still has not been paid to date. The restaurant owner was about to claim bankruptcy as they had too much debt until they both came to an agreement that our client would fund the restaurant in the hope that it would succeed, sell for a profit in the future and hopefully recoup his money The ATO states that he needs to pay GST and penalties on that.

Any requirement that company could carry forward losses

Q: A client stopped/paused operating his company for just over a year due to his employment commitment. The company’s ABN was cancelled for the period and no company’s return was lodged. The company has started operating again with the same manner after the one-year pause, and nothing has been changed. Will the company be able to carry forward those losses in future years?

The roll-over of the business run by a family discretionary trust

Q: We have a client that runs their current business through a family discretionary trust. They are looking to roll the business into a company or unit trust with the intention to take on additional business partners. We understand that there are roll-over provisions for a trust to a company. Are there any rollover provisions that would apply if we rolled the business from a discretionary trust to a unit trust? The intention is to roll 100% of the business over to this alternative structure and our client will own 100% initially. With the view that down the track he would either transfer unit/shares to other business partners (and ultimately have a CGT event) or issue new shares (if we go into a company).

Business-related capital expenditure & preservation value of goodwill

Q: Torres and Baker carried on a business together in partnership in Mosman, NSW. The partnership – Pets R – provided dog washing services. Torres decide to leave the partnership and start his own dog washing business as a sole trader.

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