You are previewing The Taxpayers' Guide 2013 - 2014, 25th Edition.
O'Reilly logo
The Taxpayers' Guide 2013 - 2014, 25th Edition

Book Description

The one-stop resource for understanding the Australian tax system, from the experts at Taxpayers Australia

The complete guide to understanding the Australian tax system, The Taxpayers' Guide 2013-2014 is packed with tax-savings strategies and helpful advice presented in a clear, easy-to-follow style that makes it essential reading for all taxpayers seeking information and tools to ensure they pay exactly what they owe...and not a cent more. Revised and updated for the 2013-2014 tax year, the book brings together almost a century of expertise from Taxpayers Australia in one comprehensive volume.

Now in its 25th edition, The Taxpayers' Guide is an informative, practical resource that answers even the most complicated tax problems in a well-organized, readily accessible format. Expansive in its coverage, the book addresses income tax rates, deductions for individuals and contractors, superannuation, capital gains, investment property, planning for retirement, investments, small business issues, trusts, payroll taxes, and much more.

  • Fully revised and updated for the 2013-2014 tax year

  • Easy to follow and comprehensive in scope, with coverage of everything from retirement to trusts

Filled with invaluable information, excellent advice, and practical strategies for understanding the tax system and maximizing rebates, The Taxpayers' Guide 2013-2014 is the all-new edition of Taxpayers Australia's trusted tax guide.

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright Page
  4. Preface
  5. Acknowledgements
  6. Taxpayers Australia
  7. Superannuation Australia
  8. TAI Practitioners & Advisers Ltd
  9. Products
  10. Taxpayers Online
  11. Electronic Tax Summary
  12. Chapter 1: Introduction
    1. 1.000 CONTENTS
    2. 1.050 Glossary of abbreviations
    3. 1.500 Tax Office rulings and determinations
    4. 1.700 Tax Calendar
  13. Chapter 2: Tax Rates and Offsets
    1. 2.000 Assessment notice
      1. 2.010 Personal income tax rates 2012-13
      2. 2.011 Income tax ready reckoner 2012-13 (and 2011-12)
      3. 2.012 Income tax ready reckoner with LITO 2012-13
      4. 2.020 Personal income tax rates 2013-14
      5. 2.021 Income tax ready reckoner 2013-14
      6. 2.022 Income tax ready reckoner with LITO 2013-14
      7. 2.030 Reduced tax-free threshold
      8. 2.040 Income derived by minors
      9. 2.050 Medicare levy
      10. 2.060 Medicare levy surcharge
      11. 2.070 Above average special professional income
    2. 2.100 Tax offsets for individuals & family benefits
      1. 2.110 Consolidated dependant (invalid and carer) tax offsets
      2. 2.120 Baby Bonus (maternity payment)
      3. 2.121 Baby Bonus (first child tax offset)
      4. 2.130 Child care tax rebate
      5. 2.140 Family tax benefit
      6. 2.150 Schoolkids Bonus
      7. 2.160 Medical expenses tax offset
      8. 2.170 Zone and overseas defence forces tax offsets
      9. 2.180 Mature age worker tax offset
      10. 2.190 Senior Australian and pensioner tax offset
      11. 2.200 Former pensioner tax offset and senior Australian tax offset
      12. 2.210 Beneficiary tax offset
      13. 2.220 Private health insurance tax offset
      14. 2.230 Delayed income tax offset
      15. 2.240 Medicare levy surcharge lump sum in arrears tax offset
      16. 2.250 Entrepreneurs’ tax offset
  14. Chapter 3: Self-assessment
    1. 3.000 Self-assessment
      1. 3.020 Issues to be addressed by taxpayers
    2. 3.060 Australian Taxation Office
      1. 3.070 Lodging tax returns
      2. 3.080 Elections and notifications
    3. 3.100 Rulings
      1. 3.110 Public Rulings
      2. 3.120 Private Rulings
      3. 3.145 Private Ruling application checklist
      4. 3.150 Oral Rulings
      5. 3.160 Product Rulings
      6. 3.170 Class Rulings
      7. 3.180 Practice Statements
      8. 3.200 Objections
    4. 3.270 Self-amendments and Tax Office amendments
    5. 3.300 Reviews and appeals
      1. 3.305 Process for Federal Court tax disputes
      2. 3.360 Small Taxation Claims Tribunal
      3. 3.380 Settlement of taxation disputes
    6. 3.400 Tax audits
      1. 3.405 Audits and access
      2. 3.410 Know your rights
      3. 3.420 Taxpayers’ Charter
      4. 3.430 Lodging a complaint against the Tax Office
      5. 3.450 Inspector-General of Taxation
      6. 3.460 Privacy Commissioner
      7. 3.485 Accounting working and advice papers
    7. 3.500 Anti-avoidance rules
      1. 3.510 Income tax anti-avoidance rules
      2. 3.520 GST anti-avoidance rules
      3. 3.530 FBT anti-avoidance rules
    8. 3.600 Penalties
      1. 3.630 Reasonable care
      2. 3.650 Calculation of penalties and interest
      3. 3.660 Interest
      4. 3.680 Fines
    9. 3.700 Tax records
  15. Chapter 4: Tax collection systems
    1. 4.000 Tax file number system
      1. 4.040 Applying for a tax file number
      2. 4.050 Tax file number privacy rules
    2. 4.100 Australian business number
    3. 4.200 PAYG withholding
    4. 4.300 Types of withholding
    5. 4.400 Payers’ obligations and other matters
      1. 4.410 Declarations and PAYG withholding variation
      2. 4.420 Payers’ obligations
    6. 4.500 HELP and SFSS
      1. 4.510 Higher Education Loan Program
      2. 4.520 Student Financial Supplement Scheme
    7. 4.600 PAYG withholding tax tables
    8. 4.700 PAYG instalments
      1. 4.730 Amount of PAYG instalments
    9. 4.800 Activity Statements
      1. 4.840 Completing an Activity Statement
      2. 4.850 Common problems with Activity Statements
  16. Chapter 5: Companies
    1. 5.000 Companies
      1. 5.100 Definition of a company
      2. 5.150 Public unit trusts taxed as companies
      3. 5.200 Debt/equity provisions
      4. 5.300 Loans, payments and debt forgiveness
      5. 5.350 Loans: Pre-December 1997
      6. 5.400 Carry forward losses
      7. 5.500 Tax consolidation
      8. 5.600 Bad debts
      9. 5.700 Lodgements
      10. 5.800 Dividend imputation system
      11. 5.820 Franking account tax return
      12. 5.850 Distribution statement
      13. 5.900 Anti-avoidance rules
  17. Chapter 6: Trusts
    1. 6.000 Trusts
      1. 6.150 Comparison of trust structures
      2. 6.170 Trustee distribution resolutions by 30 June
      3. 6.200 Family trusts
      4. 6.300 Trustee beneficiary reporting
      5. 6.350 TFN trust withholding rules
      6. 6.400 Service trusts
      7. 6.500 Trading trusts
      8. 6.600 Calculating trust income
      9. 6.700 Taxing trusts and beneficiaries
      10. 6.800 Other CGT consequences
      11. 6.900 Trust losses and bad debts
      12. 6.950 Deceased estates
  18. Chapter 7: Partnerships
    1. 7.000 Partnerships
      1. 7.100 Definition of partnership
      2. 7.110 Jointly derived income
      3. 7.120 Existence of a partnership
      4. 7.200 Tax treatment of a partnership
      5. 7.300 Partnership changes
      6. 7.400 Tax returns
  19. Chapter 8: Comparison of structures
    1. 8.000 Comparison of structures
    2. 8.020 Overview of structures
    3. 8.050 Tax rates
    4. 8.200 Pooled development funds
    5. 8.300 Early stage venture capital limited partnership
    6. 8.400 Clubs, societies and associations
    7. 8.500 Bodies corporate
  20. Chapter 9: Small business entity framework
    1. 9.000 SBE framework
      1. 9.100 Overview
      2. 9.200 Eligibility
      3. 9.230 Grouping provisions
      4. 9.300 Small business entity concessions
      5. 9.400 Accounting methods and transitional measures
      6. 9.500 Simplified trading stock rules
      7. 9.600 Simplified depreciation rules
      8. 9.700 Prepayments
      9. 9.750 Temporary investment allowance deduction
      10. 9.800 Entrepreneurs’ tax offset abolished
  21. Chapter 10: Assessable income
    1. 10.000 Assessable income
      1. 10.005 Characteristics of assessable income
      2. 10.010 Calculating taxable income
      3. 10.020 Residency
      4. 10.030 Deriving income
      5. 10.050 Employment income and allowances
      6. 10.060 Non-cash business benefits
    2. 10.100 Frequent flyer, reward programs & club benefits
    3. 10.200 Lump sum payments on termination of employment
      1. 10.210 Employment termination payments
      2. 10.220 Transitional termination payments
      3. 10.230 Directed termination payments
      4. 10.240 Genuine redundancy & early retirement scheme payments
      5. 10.250 Invalidity payments
      6. 10.260 Unused annual leave
      7. 10.270 Unused long service leave
    4. 10.300 Investment income
    5. 10.400 Interest
    6. 10.500 Rental income
    7. 10.600 Royalty income
    8. 10.700 Dividends
      1. 10.740 Franking credit trading rules
    9. 10.760 Other assessable income
      1. 10.770 Profit-making undertaking
      2. 10.780 Land sold under conditional or instalment contracts
      3. 10.790 Income from leasing arrangements
    10. 10.800 Life policy bonuses
    11. 10.850 Employee share schemes
      1. 10.860 Former Division 13A rules
    12. 10.900 Exempt income
      1. 10.910 Organisations exempt from income tax
    13. 10.950 Non-assessable non-exempt income
  22. Chapter 11: Capital gains tax
    1. 11.000 Capital gains tax
      1. 11.010 Step 1: Did a CGT event happen?
    2. 11.020 The CGT events
      1. 11.050 Step 2: Did the CGT event involve a CGT asset?
      2. 11.070 Step 3: Does an exemption or concession apply?
      3. 11.090 Step 4: Is there a capital gain or capital loss?
      4. 11.160 Step 5: Calculating the capital gain or capital loss
      5. 11.190 Step 6: Does a rollover provision apply?
      6. 11.200 Step 7: Maintain appropriate CGT records
      7. 11.250 Special CGT rules
      8. 11.300 Exemption for main residence
      9. 11.350 Joint tenants and tenants in common
      10. 11.450 Rolling over assets
      11. 11.455 Involuntary disposals
      12. 11.460 Marriage breakdown
      13. 11.465 Strata title conversions
      14. 11.466 Superannuation funds
      15. 11.468 Scrip for scrip rollover
      16. 11.470 Tax relief for demergers
      17. 11.472 Demutualisation
      18. 11.475 Business reorganisation
      19. 11.510 Asset transfers between certain group companies
      20. 11.515 Value shifting
      21. 11.525 Small business CGT concessions
      22. 11.535 Capital losses transferred within a wholly-owned group of companies
      23. 11.550 Partnerships and CGT
      24. 11.600 Trusts and CGT
      25. 11.650 CGT and estate beneficiaries
      26. 11.675 Listed investment companies and CGT
      27. 11.700 CGT and foreign residents
      28. 11.750 Leases
      29. 11.800 Investments: Shares, rights and options
      30. 11.840 Controlled foreign companies and CGT
      31. 11.900 Renewal or disposal of statutory licences
      32. 11.925 Liquidators’ distributions
      33. 11.950 Compensation
  23. Chapter 12: General deductions
    1. 12.000 Checklist of employment-related claims
    2. 12.100 Substantiation
      1. 12.120 Written evidence
      2. 12.140 Overtime meal allowances
      3. 12.145 Minor work expenses ($300 threshold)
    3. 12.160 Travel expenses
      1. 12.180 Travel claims within Australia 2013-14
      2. 12.185 Travel claims within Australia 2012-13
      3. 12.187 Claims by long distance truck drivers
      4. 12.190 Overseas travel allowances
      5. 12.200 Travel claims: Overseas 2013-14
      6. 12.205 Travel claims: Overseas 2012-13
      7. 12.210 Summary of substantiation requirements
    4. 12.220 CAR expenses
      1. 12.225 Car expense substantiation
      2. 12.260 Log book method: Worked example
      3. 12.265 Exemptions from substantiation
      4. 12.280 Disposal of car
      5. 12.290 Car parking expenses
    5. 12.300 Work-related clothing
    6. 12.400 Superannuation deductions
    7. 12.500 Entertainment expenses
    8. 12.600 Home office expenses
    9. 12.700 Self-education expenses
    10. 12.800 Donations and gifts
    11. 12.900 Tax-related deductions
    12. 12.950 Carry forward tax losses
  24. Chapter 13: Business deductions
    1. 13.000 Checklist of business deductions
    2. 13.050 Business deductions
    3. 13.170 Prepayment of expenses
    4. 13.190 Negative gearing
    5. 13.200 Trading stock
    6. 13.400 Debt forgiveness
    7. 13.450 Losses from non-commercial business activities
    8. 13.600 Capital protected borrowings
    9. 13.700 Forestry managed investment schemes
  25. Chapter 14: Deductions for capital expenditure
    1. 14.000 Capital allowance write-offs for non-SBE regime taxpayers
      1. 14.010 Depreciation (decline in value)
      2. 14.020 Depreciation flow chart
      3. 14.030 Depreciating assets costing $300 or less
      4. 14.040 Low-value pool
      5. 14.050 Software development pool
      6. 14.060 Selection of depreciation method
      7. 14.070 Balancing adjustment events
      8. 14.080 Rollover relief for certain CGT events
      9. 14.085 Luxury vehicles
      10. 14.088 Leases of luxury cars
      11. 14.090 Primary production
      12. 14.100 Mining, infrastructure and environmental protection
    2. 14.110 Blackhole expenditure
    3. 14.160 Effective life tables for depreciating assets
    4. 14.180 Temporary investment allowance deduction
    5. 14.200 Capital works
    6. 14.500 Research and development
    7. 14.600 Environmental expenditure
    8. 14.700 Australian film investments
    9. 14.800 Capital allowance clawback
    10. 14.900 Tax breaks for green buildings
  26. Chapter 15: The personal services income rules
    1. 15.000 The personal services income rules
      1. 15.100 Personal services income
      2. 15.200 Personal services business
      3. 15.300 Effect of the PSI rules
      4. 15.400 PSI earned through PSEs: The attribution rules
      5. 15.500 PAYG withholding obligations
      6. 15.600 Application of the general anti-avoidance provisions to PSBs
  27. Chapter 16: Investments
    1. 16.000 Investments
      1. 16.100 Revenue or capital
      2. 16.200 Investment earnings
      3. 16.300 Capital gains
      4. 16.400 Typical investment products
      5. 16.500 Specialised investment products
      6. 16.600 Common deductions allowable to investors
      7. 16.700 Common mistakes
      8. 16.800 Investment structures
      9. 16.900 Other taxation issues
  28. Chapter 17: Rental income
    1. 17.000 Rental property
      1. 17.100 Assessable income
      2. 17.150 Rental business
      3. 17.200 Deductions
      4. 17.300 Capital works
      5. 17.350 Decline in value of a depreciating asset
      6. 17.360 Residential rental property assets
      7. 17.400 Holiday houses and family arrangements
      8. 17.500 FBT and rental properties
      9. 17.600 GST and rental properties
  29. Chapter 18: Superannuation
    1. 18.000 Superannuation: An overview
      1. 18.001 Summary of key measures announced on 5 April 2013 and Budget 2013-14
      2. 18.002 Contribution acceptance and deductibility table
      3. 18.008 Thresholds
    2. 18.010 Contributions
      1. 18.015 Acceptance of contributions
      2. 18.020 Concessional (before-tax) contributions
      3. 18.030 Non-concessional (after-tax) contributions
      4. 18.040 Contribution caps
      5. 18.050 Excess contributions tax
      6. 18.060 Tax file numbers and superannuation
      7. 18.065 Reportable superannuation contributions
      8. 18.070 Types of contributions
      9. 18.080 Contributions made to non-complying superannuation funds
      10. 18.085 Form of contribution
      11. 18.090 Other amounts
      12. 18.095 Superannuation and fringe benefits tax
    3. 18.100 Superannuation entities and rules
    4. 18.250 Penalties
    5. 18.260 Splitting superannuation and family law
    6. 18.265 Superannuation and same-sex relationships
    7. 18.270 Superannuation and bankruptcy
    8. 18.275 Superannuation and insolvency administrations
    9. 18.280 First home saver accounts
    10. 18.285 MySuper
    11. 18.300 Taxing superannuation entities
      1. 18.310 Tax return lodgments for superannuation funds
      2. 18.320 When tax is payable by superannuation entities
    12. 18.500 Superannuation guarantee
    13. 18.530 Superannuation guarantee charge
    14. 18.560 Choice of fund
    15. 18.570 Portability
    16. 18.580 Small amounts of employer superannuation
    17. 18.590 Retirement savings accounts
    18. 18.600 Taxation of superannuation benefits
    19. 18.660 Rollovers
    20. 18.670 Departing australia superannuation payment
    21. 18.680 Terminal illness
    22. 18.700 Income streams
      1. 18.710 Transition to retirement income streams
      2. 18.720 Income stream standards
    23. 18.800 Non-complying superannuation funds
  30. Chapter 19: Retirement
    1. 19.000 Retirement
      1. 19.100 Phases of superannuation
      2. 19.200 Transition to retirement
    2. 19.300 Government incentives
      1. 19.310 Mature Age Worker tax offset
      2. 19.320 Pension Bonus Scheme
      3. 19.330 Salary sacrifice to superannuation
    3. 19.400 Centrelink age benefits
      1. 19.410 Age Pension benefits
      2. 19.430 Means tests
    4. 19.500 Certain other centrelink benefits
  31. Chapter 20: Primary producers
    1. 20.000 Primary producers
      1. 20.100 What is a primary producer?
      2. 20.200 Income of primary producers
      3. 20.400 Livestock
      4. 20.490 Valuing horses as trading stock
      5. 20.500 Deductions
      6. 20.600 Capital improvements
      7. 20.700 Managed investment schemes
      8. 20.800 Farm management deposits
      9. 20.850 Fuel tax credits
      10. 20.900 Averaging income
  32. Chapter 21: International taxation
    1. 21.000 Taxation of foreign income derived by residents
      1. 21.010 Foreign source income – individuals
      2. 21.020 Foreign source income – business
    2. 21.100 Taxation of non-residents
      1. 21.110 Non-resident businesses
      2. 21.120 Non-resident individuals
      3. 21.130 Capital gains and investment returns
      4. 21.140 Withholding tax as a final tax
    3. 21.200 Double taxation agreements
      1. 21.210 Broad concepts
      2. 21.220 Australia’s double tax agreements
      3. 21.230 Certificates of residency
      4. 21.240 Other international agreements
    4. 21.300 Foreign exchange translation
      1. 21.310 Conversion of foreign currency amounts
      2. 21.320 Realisation of foreign currency gains and losses
      3. 21.330 Elections
      4. 21.340 Foreign exchange rates
    5. 21.400 Foreign income tax offsets
      1. 21.410 Entitlement to a foreign income tax offset
      2. 21.420 Foreign losses
      3. 21.430 Transitional rules ending 30 June 2013
    6. 21.500 Conduit foreign income
    7. 21.550 Trust distributions to non-residents
    8. 21.560 Investment manager regime
    9. 21.600 Foreign hybrids
    10. 21.700 Thin capitalisation
      1. 21.710 Key features of the thin capitalisation rules
      2. 21.720 Outward investing entities
    11. 21.800 Anti-tax-deferral regimes
      1. 21.810 Outline of the current system
      2. 21.820 Controlled foreign companies
      3. 21.830 Transferor trusts
      4. 21.840 Accruals taxation reform
    12. 21.900 Transfer pricing
      1. 21.910 The current transfer pricing rules: Division 13
      2. 21.920 Reform of transfer pricing rules
      3. 21.930 Issues paper: implications of the modern global economy
  33. Chapter 22: Goods and Services Tax: Overview
    1. 22.000 Overview of GST
      1. 22.010 How GST works
    2. 22.100 Taxable supply
      1. 22.170 GST on taxable supplies
      2. 22.200 Creditable acquisitions and input tax credits
    3. 22.300 Input taxed supplies
      1. 22.400 GST-free supplies (Division 38)
      2. 22.410 Exports (Subdivision 38-E)
      3. 22.420 GST and travel
      4. 22.430 Health goods and services (Subdivision 38-B)
      5. 22.440 Education and childcare
      6. 22.450 Charitable activities (Subdivision 38-G)
      7. 22.460 Supply of a going concern (Subdivision 38-J)
      8. 22.470 Religious services (Subdivision 38-F)
      9. 22.480 GST on food (Subdivision 38-A)
      10. 22.490 Other GST-free supplies
  34. Chapter 23: Goods and Services Tax: Administration and special topics
    1. 23.000 Registration, tax periods and GST accounting
      1. 23.100 How to account for GST
      2. 23.130 Special rules on attribution
      3. 23.200 Administration
    2. 23.300 Special topics
      1. 23.310 GST groups and joint ventures
      2. 23.320 Partnerships
      3. 23.330 Agency relationships and consignment sales
      4. 23.340 GST and real property
      5. 23.350 GST and non-residents
      6. 23.360 Simplified accounting methods (Division 123)
      7. 23.370 Hire purchase and leases
      8. 23.380 Special GST rules
    3. 23.410 GST and fringe benefits
    4. 23.420 GST and income tax
    5. 23.430 Anti-avoidance
  35. Chapter 24: Fringe benefits tax
    1. 24.000 Fringe benefits tax: overview
    2. 24.050 FBT administration
    3. 24.100 Taxing fringe benefits
    4. 24.150 FBT and GST
    5. 24.200 FBT exemptions
    6. 24.250 Record keeping for FBT
    7. 24.300 Reportable fringe benefits
    8. 24.350 Car benefits
      1. 24.360 Valuing car benefits
      2. 24.370 Using the statutory formula method
      3. 24.380 Using the operating cost method
      4. 24.390 Leased cars
      5. 24.395 Calculating the FBT liability
    9. 24.400 Car parking benefits
      1. 24.410 Taxable value of a car parking benefit
    10. 24.450 Loan benefits
    11. 24.500 Debt waiver fringe benefits
    12. 24.550 Expense payment benefits
    13. 24.600 Road toll and e-tag expenses
    14. 24.650 Housing benefits
    15. 24.700 Board and meals
    16. 24.750 Superannuation and FBT
    17. 24.800 Employees in remote areas
    18. 24.820 Residual fringe benefits
    19. 24.840 Living-away-from-home allowance
    20. 24.860 Property benefits
    21. 24.880 Airline transport fringe benefits
    22. 24.900 Entertainment
      1. 24.920 Entertainment: FBT and income tax
      2. 24.940 ‘Entertainment’ or ‘non-entertainment’
    23. 24.960 Tax-exempt body entertainment
    24. 24.980 Salary sacrifice arrangements
  36. Chapter 25: Payroll tax
    1. 25.000 Payroll tax
      1. 25.010 Definition of wages
      2. 25.020 Allowances
      3. 25.040 In which jurisdiction is payroll tax payable?
      4. 25.050 Objections and appeals
      5. 25.060 Due date for returns
      6. 25.070 Grouping of employers
      7. 25.100 Payments to contractors
      8. 25.160 Reducing ‘amounts taken to be wages’
      9. 25.200 Apprentice wages, rebates and grants
      10. 25.300 Payroll tax rates and thresholds
      11. 25.340 Monthly payroll tax deductions
      12. 25.345 Deduction for interstate employers
      13. 25.350 Payments liable for payroll tax
  37. Chapter 26: Land tax
    1. 26.100 Act land tax
    2. 26.200 Victorian land tax
    3. 26.300 Nsw land tax
    4. 26.400 Queensland land tax
    5. 26.500 South Australian land tax
    6. 26.600 Western Australian land tax
    7. 26.700 Tasmanian land tax
  38. Chapter 27: Duties
    1. 27.100 Australian Capital Territory duties
    2. 27.200 Northern Territory duties
    3. 27.300 Victorian duties
    4. 27.400 New South Wales duties
    5. 27.500 Queensland duties
    6. 27.600 South Australian duties
    7. 27.700 Western Australian duties
    8. 27.800 Tasmanian duties
  39. Chapter 28: Other taxes
    1. 28.000 Other taxes
      1. 28.100 Luxury car tax
      2. 28.200 Wine equalisation tax
      3. 28.280 Carbon tax
      4. 28.300 Fuel tax credits