Shorten confirms push on trusts, four-year terms

Discussion in 'Accounting & Tax' started by Nodrog, 23rd Jul, 2017.

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  1. Nodrog

    Nodrog Well-Known Member

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    He we go again, another crack at Trust reform.

    Given the way the Libs are behaving a Labor Government is looking a strong probability next election.
     
  2. Nodrog

    Nodrog Well-Known Member

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    Highly intellegent comment from Shorteno_O. @Paul@PFI I hope you're not one of those evil accountants he's referring to:
    Insiders - 23/07/2017: Bill Shorten Joins Insiders - Insiders - ABC
     
  3. bumskins

    bumskins Well-Known Member

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    It's just too bad some people can't help themselves and ruin it for everyone else.
     
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  4. Nodrog

    Nodrog Well-Known Member

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    At least Shorten seems supportive of some of the reasons for the existence of Trusts. And of course the use of Trusts is popular with politicians (current and former) from what I've read and heard.
    It appears the first crackdown on Trusts and tax minimisation is to limit deductible Tax advice to $3,000. I pity small businesses if that's the case. I wonder if that's $3k per entity? Another of his crazy ideas but it's looking more likely now that this could become Labor policy. Shorten has mentioned it a number of times.

    Add that to restricting negative gearing to new homes only, halving the CGT discount and bringing back the deficit levy making the top tax rate 49%. To date it seems that Labor won't make these changes retrospective. Labor is totally against company tax cuts with rumblings that they would even like to remove / restrict to a lower threshold the recent company tax cuts.

    Fortunately Superannuation seems safe except for maybe reducing non-Concessional contributions to $75K pa. The Libs went further in restricting Super Concessional than what Labor was intending to do.

    Interesting times ahead given that there's a strong probability that Labor might get in next election. Tony Abbot seems determined to destroy any chance the Libs have of gaining ground.

    So it looks like policy based on class warfare and politics of envy taking Australia in the direction of becoming a high taxed welfare state. Which is why I'm a believer in also holding assets outside Australia to minimise the impact of home country risk.

    And no I'm not a conservative die hard having voted for both sides of Politics in my lifetime. But I am becoming more concerned with the direction Australia is heading. It seems to be a case of squeezing the grape rather than growing it!
     
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  5. Scott No Mates

    Scott No Mates Well-Known Member

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    Compulsory super was a Labor baby, so they're not going to weaken it. Probably increase the employer contributions.
     
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  6. Mike A

    Mike A Well-Known Member

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    And people wonder why I'm non resident
     
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  7. Mike A

    Mike A Well-Known Member

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    consulting and business management advice to small business vs tax advice. accountants will start splitting invoices between management and consulting advice (deductible for a business) and tax advice (capped up to 3K if he has his way).

    To be honest for small to medium enterprises the tax advice component could well be $3k. the rest of the consulting and ongoing advice may be much more.

    another politician who has never worked in the real world.
     
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  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Shorten is a peanut.

    No deduction for taking on the ATO when its wrong ?
    Giving advice on how to comply with tax laws ?

    I have a better idea. Tax politicians salaries at 150%. Like the carbon tax idea it should help us avoid a growing problem.

    The solution to trusts is to tax them like a company. It would be so easy to implement.
     
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  9. Nodrog

    Nodrog Well-Known Member

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    They don't even need to have a review. Simply dust off the Ralph Report as it's already been done.

    For passive investment Trusts with low turnover the Trust could be taxed as a company but the same as the older LICs and entitled to LIC Capital Gains discount:).
     
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  10. The Falcon

    The Falcon Well-Known Member

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    Guaranteed that search terms around "how to become non resident for taxation purposes" are getting a work out now.
     
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  11. Mike A

    Mike A Well-Known Member

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    its not easy unless you emigrate to another country.

    but with australias high cost of living and high taxes places like singapore that tax you at 15% with similar costs of living make it attractive.

    malaysia has a slightly lower tax rate than australia but the cost of living in somewhere like penang is a third of the cost of living in sydney.

    so you end up with a lot more to do with your after tax dollars. if you have a family though the transition would be extremely difficult.
     
    Last edited: 24th Jul, 2017
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  12. thesuperman

    thesuperman Well-Known Member

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    Doesn't being a non-resident badly stuff you up if you hold property either personally or held in trust, meaning you have to pay way more tax than being a resident? Also you end up paying way more tax on any income earned in Oz?
     
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  13. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    It would be interesting to see if this ended up in lower tax then currently. If you have no adult children and are both already earn over $37k then the distributions would be taxed at 32.5%. (more interesting distributions aside)
     
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  14. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Alas it wouldnt be full and final tax. The taxation of trusts like companies would impose the imputation system. Franking credits at the corporate tax rate (30% not 27.5% ?) BUT final tax to a resident beneficiary would see final tax imposed at their marginal tax rate with credit given for tax paid by trust.

    Unfranked would be subject to withholding where a TFN isnt quoted (default high rate) OR a non-resident (30%?..Maybe 40% ?)

    It all seemed so logical the way Ralph proposed. Trusts would become like companies for tax purposes and integrity is enhanced. The nature of franking brings tax collections forward and avoids some of the PAYG instalment system elements (sometimes)
     
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  15. jaybean

    jaybean Well-Known Member

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    Every time I see these "for the working class" types I'm reminded of Venezuela. People complained about the rich. So the govt took from the rich, prosecuted them for earning too much. The currency collapsed. Now no one - rich or poor - even has access to basic amenities like toilet paper.
     
  16. radson

    radson Well-Known Member

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    A rather extreme example. How about the Scandinavian countries?
     
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  17. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    A military backed leadership isnt democratic. ....Look at the USA now ;)
     
  18. jaybean

    jaybean Well-Known Member

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    I'm not trying to say it's a perfect mirror, I'm just saying there is danger in bucking to the wills of a group of people who's first thought on pay day is to head to the pokies. That's all:)
     
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  19. HUGH72

    HUGH72 Well-Known Member

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    QUOTE="radson, post: 444869, member: 1816"]A rather extreme example. How about the Scandinavian countries?[/QUOTE]

    With many of us having marginal tax rate approaching 50% while paying school fees and over $5000 per year in health insurance I don't think we are that far from it. The major difference being that we don't receive equivalent services while state and federal governments squabble over who is to blame.
    Then there are other services like child care which many people spend a significant proportion of their salary on. I'm not really complaining as we live in a great country but there is so much waste by government.
    IMG_0284.PNG
     
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  20. Hedgy

    Hedgy Well-Known Member

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    four year terms...you've got to be bloody joking. the buffoons are completely incapable of doing anything sensible. and please, don't run the argument that three year terms don't allow the buffoons to take on the big long term reforms...if they're doing a good job with a three year term then they'll get voted back in and if not then kick them out. three years is more than enough for the current crop of clowns.
     
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