Stage 3 Tax Cuts
In an interview on the ABC’s 7:30 Report last Thursday, the Federal Treasurer stated that while the ALP’s “policy on those tax cuts hasn’t changed” (i.e. the ALP is supportive of the tax cuts), the UK’s current predicament and the IMF statement that “we don’t recommend large and untargeted fiscal packages at this juncture” do give pause as to what is the most appropriate policy to ensure “fiscal and monetary policy working together”.

So, what does this mean for the currently legislated stage three tax cuts which are to apply from the 2024-25 year? While providing tax cuts during a period of rising inflation does not seem fiscally responsible, we will have to wait a bit longer to see which way the Government will go. Some answers may come in the Federal Budget currently schedule for 25th October. Stay tuned for details of Tax & Super’s coverage of Budget night.

Queensland Land Tax
Last week the Queensland Government announced the scrapping of the state’s controversial multi-jurisdictional land tax, which was designed to tax investors for owning properties interstate. The move comes after the planned tax proved highly unfavourable and was criticised by other states upon whom Queensland would have relied to obtain the information needed to administer the tax.

ATO Advice and Guidance Issue List
The following documents are scheduled to be issued by the ATO this week:

TD 2022/14 If a non-contingent liability to pay a specified amount is included in the cost base of your CGT asset under either subsection 110-25(2) or section 112-35 of the Income Tax Assessment Act 1997 and you deduct or can deduct that amount, does subsection 110-45(2) of that Act apply?
This Determination sets out that the law does not permit ‘double counting’ of certain amounts by way of inclusion in the cost base of an asset and claiming a tax deduction for the same amount. The ATO’s preliminary view was originally released as Draft Taxation Determination TD 2019/D11 (see Tax Summary 2022-23 para. 12.130).

TD 2022/D3 Income tax: use of an individual’s fame by related entities
This draft Determination covers arrangements where:

  • the individual with fame (for example, media personalities, professional sportspersons, entertainers, actors, artists and influencers) establishes and enters an agreement with a related entity (for example, a company or a family trust) to use their fame, and
  • the related entity then authorises other entities to use the individual’s fame for a fee.

It explains that income derived under the arrangement is the individual’s and not the related entity’s.