Details
This book is on taxation from the special perspective of share and property investors, large and small, beginners and more advanced. It will also help students of the subject at all levels. The book deliberately concentrates on broad principles rather than on fine details.
Rational investors today can hardly ignore the current tax regime. This book is updated to 2008 and includes coverage of recent developments. It contains four chapters on capital gains tax and two on dividend imputation, as experience shows that these are areas of great confusion from many investors.
Other subjects covered in the book include useful links on the internet, tax deductions and rebates, the use of borrowed funds, family trusts, share traders, inflation, marginal tax rates, State taxes, social security and the GST. This book of 31 chapters concludes with 11 appendices, a very detailed glossary and a comprehensive index.
Contents
Part I: General Principles
Chapter 1
Introductory
Background
The basic Australian Tax system today
Legislation
Some important features of the system
Tax Year
Tax Returns
Assessable income
Exemption income
Outgo
Inflation
Medicare levy
New Taxes
Tax Offsets
Chapter 2
Income Tax and Taxpayers at Large
Individuals
Special tax scales
Partnerships and trusts
Companies
Some misconceptions
Self-Assessment
Private rulings
Public rulings
Penalties
Pay as you go
Chapter 3
Income Tax and Investors
Investment objectives
The effects of taxation
Marginal tax rate
Retirement aspects
Timing
Taxation Incentives
General Comments
Chapter 4
Capital Gain Tax; Basics
Background
Nomenclature
Legislation
The 1999 rules
Hoax
Administrative aspects
Analysis
Fairness aspects
Indexation
Capital losses
Transaction costs
Transaction dates
Pay as you go
Exempt transactions
Case study
Death
Timing definition
Chapter 5
Capital Gains Tax: Special Situations
Assets left by will or intestacy
Gifts
Bonus shares
Rights issues
Spin-off companies
Options and convertible securities
Expiry of options or warrants
Index funds and exchange traded funds
Partial sales
Partial returns of capital
Buybacks
Overseas assets
Business assets
Reconstructions
Takeovers
Scrip for scrip rollovers
Other rollovers
Switches
Chapter 6
Capital Gains Tax: Record Keeping
Background
The data columns
The calculation columns
The “for tax return” columns
Acquisitions in stages
Generally
The capital gains tax paperwork mess
Records for property trust dividends
Chapter 7
Capital Gains Tax: Other Aspects
General comments
Double taxation
Liquidation of a company
Worthless shares
Failed loan securities
Discounted and deferred interest securities
Traditional securities
Summary of the three approaches
Personal use assets
Dividend reinvestment and dividend election plans
Composite asses
Assts owned jointly
Transfers between spouses
Share traders
Short selling
Trust asset distributions
Change of control
Record keeping
Cash flow aspects
Strategies
Special rulings
Superannuation
Small business
Portfolio reviews
Switches
Equity in wills
Numerical examples
Social security
Economic effects of the CGT legislation
Effect on turnover
Effect on share prices
Further information
Chapter 8
Deductions and Rebates Available to Investors
Background
Rebates
Deductions
Tax losses
Investment outgo
Tax-related expenses
Fines
Interest on life policy loans
Immediate annuities
Non-deductible items
Tax minimisation schemes
Retention of records
Section 51AAA
Charities
Travel expenses
Part II: Taxes on Specific Asset Classes
Chapter 9
Fixed Interest Securities
General comments
Discounted and deferred interest securities
Indexed securities
Cash management trusts
Preference shares
Inflation
Mortgage offset accounts
Home purchase debt reduction
Defaults
Interest from the tax office
Rebates
Withholding tax
Bank bills
Convertible notes
Chapter 10
Shares
Background
Imputation system
The words “imputation” and “franking”
Franked and unfranked dividends
Nomenclature
Rights
Medicare levy
Dividend selection schemes
Dividend yields
Are shares with franked dividends a bargain?
Franking accounts
Tax avoidance and tax evasion
Myth of the falling franking rebate
Sell back rights
Chapter 11
Listed and Unlisted Unit Trusts
Background
The basis of taxing trusts
Components of the trust distributions
Collective investment vehicles
“Tax exempt” distributions
Double taxation
Tax losses
Tax years
Imputation trusts
Chapter 12
Property
Introductory comments
Depreciation
Building allowance
Stamp duty
Specific property taxes: land tax and rates
Landlords and tenants
Alterations and extensions
Bodies corporate
Property trusts
Family trusts
Penal land tax on certain trusts
Marketing aspects
Chapter 13
Foreign Assets and Income
Background
Withholding tax
Income from other countries
Companies
Dividend washing
Scams
Conduit foreign income
Non-residents and CGT
Foreign trust beneficiaries
Persons leaving Australian
Part III: Common Situations
Chapter 14
Dividend Reinvestment Plans
Types of plan
Tax consequences
Chapter 15
Taxation When Borrowed Funds are Used
General considerations
Tax considerations
Negative gearing
Residential property
Other aspects
Borrowing expenses
Related outlays
Invoices
Interest paid in advance
Home loans
Apportionments
Chapter 16
Tax Losses
Losses in general
Corporate tax losses
Capital gains
Imputation credits
Rebates
Trusts
Partnerships
Chapter 17
Income Splitting
Name to be used for registering assets
Some problems
Discretionary trusts
Annuities
Minors
Chapter 18
Family Trusts
Background
Distribution policy
Corporate beneficiaries
Superannuation fund beneficiaries
Child beneficiaries
Child maintenance trusts
Spouse threshold
Undistributed income
Deceased estate
Testamentary trusts
Taxes paid by the trustee
Distributions in kind
Capital gains tax
Components of trust distributions
Annuities
Losses
Financial year
Family trust elections
Trustee resolutions
Model resolution for trust distributions
Chapter 19
Minors
Background
Arithmetic
Family trust aspects
Mixed incomes
Testamentary trusts
Chapter 20
Private Companies
Taxation of family companies
Tax minimisation
Sale of a business
Loans from private companies
Chapter 21
Share Traders and the CGT
Background
Speculative gains
Declarations
Post 1985
What is trading?
Tests
Pros and cons
Conclusion
Chapter 22
Gifts and Bequests to Charities
Background
DGR status
Donors can be illogical
What is a charity?
Philanthropic trusts
A halfway house
Practical aspects
Residual beneficiaries
Income tax aspects
Capital gains tax aspects
Inter vivos gifts
Bequests
Choice of best donor
Donations on behalf of shareholders
Donations to political parties
Part IV: Other Aspects
Chapter 23
Dividend Imputation and Company Distribution Policies
Background
The post -985 pre-1999 position
Company capital requirements
Dividend reinvestment plans
The post-1999 position
Capital gains
Some non-tax aspects
Special situations
Cash flow considerations and ethics
Preference shares
Chapter 24
Franking Accounts
Background
Bookkeeping
Mechanics
Wasted resources
Failed companies
Buybacks
Franking deficit tax
Tax refunds
Rate changes
Chapter 25
Tax Effect Planning
Background
The timing of transactions
Tax deferment
Timing issues for capital gains
Higher income, lower tax
Commentary
Borrowing
Trees, nuts, oysters and the like
Chapter 26
The Goods and Services Tax
Background
Overseas precedents
GST Terminology
GST Entities
Excluded items
The rate of GST
Transaction costs
Business activity statements
Tax invoices
Types of property
GST when renting out a property
Tenants
Transitional provisions
The leasing rules summarised
GST when buying a property
The purchase rules summarised
Renovations and conversions
The market for non-residential premises
The market for residential premises
Vacant land
Registration by property owners
The pros and cons of registration
Owners already registered
Commission and fees
Deposits
Effect on the stock exchange
Effect on investor profits
Property trusts
Shares in property owning companies
Chapter 27
Current and Former State Taxes
GST compensation
Stamp duty
Multiple levies
Land tax and rates
Payroll tax
Death duties
Foreign death duties
Analysis
Rearrangements
Switches
Fixed interest deposits
Interspousal transfers
Chapter 28
Social security issues
Background
Eligibility for aged pension
Means testes
Estate planning
Assets test
Drawbacks
Couples
Income
Borrowings
Marginal rate of abatement
Private trusts and privates companies
Family trusts
Gifts received
Deeming
Financial investments
Changed circumstances
Income tax aspects
The pensioner tax offset
Centrelink statements
Some further state planning aspects
Official advice
Multiple counting in the assets test
Special disability trusts
Appeals
Centrelink web site
Summary
Chapter 29
Imputation: Some Theoretical Concepts
Security anaylsis
Dividend yield
Earnings yield
Price earning ratio
Dividend cover
Dividend payout ratio
Net tangible asset backing per share
Some practical limitations
Return on assets and return on equity
Gearing by companies
Chapter 30
Some Warnings
Published statistics
Maintenance of franked dividends
Will the tax system be altered?
Are shares with franked dividends a bargain?
Accumulation indices
Chapter 31
Miscellaneous
Use of tax agents
Tax file numbers
TFN amounts
Appeals
Employee share schemes
Some misconceptions
Superannuation surcharge
Reading the fine print
A company tax anomaly
Tax savings through trust structures
Tax avoidance measures
Abolishing loopholes
Listed investment companies
Laffer curve
Tobin tax
Product rulings
Class rulings
Simplified tax system
Taxation ombudsman
Tax help volunteers
Consolidated company groups
Talkback programs
The 45-day rule
Additional Information
| Author | N.E. Renton |
|---|---|
| Published In | Australia |
| Year Published | 2009 |
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