Princess Phoebe ends up with a $2m tax bill on her weekender

Discussion in 'Accounting & Tax' started by Mike A, 17th Jan, 2020.

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  1. Mike A

    Mike A Accountant

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    Princess Phoebe is landed with a $2m tax bill on the weekender she purchased !!!

    This doesn't make sense. Or does it ?

    Princess Phoebe is a world famous make-up artist and after spending time with Richard Branson on Necker Island she decided it was time to purchase her own island so she could fly there on weekends and spend time with friends and family.

    She found a lovely little island off the coast of Italy and was advised by her Italian lawyers to use a company.

    "No problems at all I have a bucket company with millions in cash" Let's use that.

    She uses one of her "bucket" companies to purchase the asset and is relaxing on her private beach when she is told that the ATO has audited her affairs and the entire purchase has been treated as an unfranked dividend !!!

    Annus Horribilis
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Div7A, obtaining a financial benefit from the company!
     
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The shift to the regions has been quite profound with Millennials and Gen X leading the way. It seems affordability, lifestyle, and working from home have been the key drivers from which these generations have been able to take most advantage.