CLASS ACTIONS: Things to know

Published by Law Society of New South Wales

In the current economic climate it is not surprising that investor class actions are receiving increased attention.

There is some suspicion and confusion about class actions. Some people have an enduring belief that they must be taking on an unacceptable level of risk if they get involved. Equally, some may just have an aversion to continuing in a claim commenced without their express consent, despite the fact that it could benefit them financially to do so.

Read the rest of this entry »

TRUSTS: Blow the dust off that deed

Published by Law Society of New South Wales

Many clients are totally unaware of the limited life of trusts.

Trust deeds can sit in safe custody for years without being looked at. But if you are planning to do something with a trust, it is important to check the trust deed first. You may be in for a shock if you find that the date when the trust will mature is coming up soon.

Read the rest of this entry »

SEAL THE DEAL: Signing contract documents legally in the e-age

Published by Law Society of New South Wales

Often, not enough attention is given to the procedure for executing contractual documentation when finalising an agreement. This is increasingly an issue as the number of parties involved in transactions increase, parties often do not execute contracts in the same physical location, and frequently parties are required to execute signature pages and return them by email.

In a recent court case a tax consultancy operated a taxavoidance scheme for some of its clients. The revenue authorities suspected that the scheme had been dishonestly implemented and sought warrants to search for  documents at a number of client premises.

Read the rest of this entry »

Super Funds: Maintaining a sole purpose

Published by Law Society of New South Wales

Superannuation funds may be looking for more novel ways of accumulating wealth. People may want to accumulate wealth in a super fund by carrying on a business, but the tax office takes the view that this is not acceptable.

An alternative is for the fund to acquire shares in a private company or units in a unit trust which carries on a business. The tax office, however, will most probably say that this does not assist a trustee in avoiding the sole-purpose test.

Read the rest of this entry »

Law Reform: Less Australia/New Zealand legal divide

Published by Law Society of New South Wales

The Australian and New Zealand governments have signed an agreement to make it easier to enforce certain judgments and sanctions between the two countries. It is also intended to streamline the process for resolving civil proceedings that cross the Tasman.

The direct result of this reform will be that parties in Australia or New Zealand with decisions not involving money that are captured by the trans-Tasman law reform will have more options for enforcement and a higher likelihood of success in enforcing when the defendant is in the other country or has property there.

The majority of civil proceedings will be able to be served in the other country without separately seeking permission from a local court, excluding such civil proceedings as dissolution of marriage, enforcement of maintenance obligations and enforcement of child support.

Read the rest of this entry »

Landholder Duty: Tax base expands

Published by Law Society of New South Wales

New state revenue laws create a new model for imposing duty on land.

Since 1987, NSW has had a tax system which imposes duty on the acquisition of interests in private companies and unit trusts that hold land in NSW.

Prior to 1 July, the rules applied where a “relevant acquisition” was made of a “land-rich” landholder. A private company or trust was considered land-rich if 60 per cent or more of its total assets comprised land or interests in land in all places, and $2 million worth of it or more, needed to be in NSW.

Under the new system, provided the entity holds land worth $2 million or more in NSW, it is irrelevant what proportion of its value is in land.

This expands the tax base to acquisitions of many non landfocused entities, such as in the manufacturing and service sectors. Duty at a top rate of 5.5 per cent must now be calculated not only on the unencumbered value of NSW land, but goods in NSW held by the entity as well.

Read the rest of this entry »

Removal of same sex discrimation federally

The Federal Attorney General has announced that legislation to remove same-sex discrimination from a wide range of Commonwealth laws will be introduced in the Winter Sittings of Parliament. This reform follows the report of HREOC, Same-Sex: Same Entitlements, which focused on financial and work-related legislation.

Areas where discrimination will be removed include:

• Tax
• Superannuation
• Social security
• Health
• Aged care
• Veterans’ entitlements
• Workers’ compensation
• Employment entitlements
• Other areas of Commonwealth administration

The Government has begun introducing legislation in the Winter Sittings of Parliament. In areas such as social security, tax and veterans’ affairs, the reforms are expected to be phased in - to allow time for couples to adjust their finances, and for administrative arrangements to be implemented.

All of the changes are expected to be implemented by mid-2009.

If you have any queries relating to Family or Relationships law please do not hesitate to contact any of our Family and Relationships Law Team at Mullane and Lindsay: Mark Sullivan, Vivien Carty, Kristy Davis and Ashleigh John. Kristy Davis is present at our Tea Gardens office on Wednesday afternoons by appointment. (Tel: 4928 7300).

MANAGING SUPER FUNDS: Breach of rules can lead to imprisonment

A fund must be deemed a super fund under the superannuation laws for contributions to be tax-deductible and the fund concessionally taxed.

The strategy of tax planning through super funds is a simple one - you contribute as much as possible to a super fund whose income is then subject to, at most, 15 per cent tax, and in due course withdraw the contributions and income as a tax-free pension or lump sum.

However, the government imposes a quid pro quo. It expects that the super fund will be managed in accordance with its rules. The tax office regulates self-managed super funds. If a fund fails to comply with the requirements and becomes a non-complying fund, it will lose its ability to accept tax-deductible contributions and will not be taxed at concessional tax rates. Penalties can also be imposed on trustees and others.

Read the rest of this entry »

TAX LAW: Longer to appeal

A recent court of appeal decision affects the future conduct of state tax appeals generally, whether they concern stamp duty, land tax or payroll tax in NSW.

The court of appeal has found that where the Chief Commissioner of Tax refuses to give permission to lodge an objection to a decision after the 60-day period allowed in the tax laws, an objection may still be lodged under another part of the law.

For the person in the case, it kept alive his right of objection and appeal for earlier tax years 1997 to 2004 when he had lodged objections against his assessment for land tax after the 60-day period.

Contact your solicitor for further advice.