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1312, 2017

Unpaid rent and outgoings: issues for Landlords to consider in commercial leasing

By |December 13th, 2017|

Often the owner of a commercial property (“landlord”) is left chasing unpaid rent, outgoings and other expenses from a tenant.

Before taking steps to end the commercial lease and re-enter possession of the property, a landlord should be aware of its rights under the lease agreement.

 

Some of the issues the landlord must consider are:

  • What amount is outstanding and when was it due?
  • Has there been any demand for payment?
  • Is there any dispute in relation to the outstanding debt?
  • What does the lease say about failing to pay rent, outgoings and other expenses?
  • Is the tenant in breach of the lease?
  • Is notice of the breach required, and, if so, how much notice is required?
  • What is the process to evict the tenant?
  • What are the consequences of re-entry by the landlord?
  • Is timing an issue?
  • What property would remain in the premises if the Landlord re-entered and took possession of the premises by changing the locks?
  • What happens next?

 

Generally, a […]

1312, 2017

Landholder Duty and Death

By |December 13th, 2017|

Where a private company or unit trust owns real estate with a value of $1 million or more then duty may be payable when there is a change in shareholding or unit holding. If duty applies it will be chargeable at the rates applicable to land transfers.

Duty will be chargeable where the acquisition of shares or units amounts to a ‘relevant acquisition’. In general terms, where the acquirer owns 50% or more of the ordinary shares in the company after the acquisition (20% for unit trusts) then the acquisition will likely be subject to duty.

The provisions can also apply where a shareholder or unit holder dies and as a result their shares or units pass to a beneficiary. Although an exemption from duty can apply a Landholder Acquisition Statement must still be completed and lodged with the State Revenue Office within 30 days of the relevant acquisition occurring. An application […]

1312, 2017

ATO ruling says penalty tax may be payable on holiday homes owned by trusts

By |December 13th, 2017|

According to the recently released TD 2017/20 a family trust that owns a holiday home will be liable to pay family trust distribution tax (FTDT) at 47% where friends of the family stay in the holiday home.

 

How can this arise you may ask?

A trust may make a family trust election (FTE) for a number of different reasons including:

  • to assist it in claiming prior year losses and debt deductions;
  • to allow beneficiaries to claim franking credits on franked dividends distributed to them; and
  • to help pass the no change in underlying economic ownership requirement in the new small business restructure roll-over relief.

If a trust has made a FTE then any ‘distribution’ of income or capital to a person who is not a member of the primary individual’s family group will be subject to FTDT.

 

What constitutes a distribution?

The definition of distribution to a person is expanded in section 272-60 and includes paying or crediting […]

2809, 2017

Estate Planning When Entering or Exiting Relationships – Are All Things Equal Between Married and De Facto Couples?

By |September 28th, 2017|

No matter what your view is on the marriage equality debate, understanding the rights of a married couple compared to a de facto (including same sex) couple is critical to enable a meaningful discussion with clients who are entering or exiting relationships about their plans on death and incapacity.

 

The difference between proving a marriage and a de facto relationship

At the very core, marriage is based on a couple’s mutual promise to one another and need only be proved by the production of one document (a marriage certificate) at most. It is immediate and undeniable.

A de facto relationship must be proved by evidence relating to living arrangements, sexual relationship, finances, ownership of property, etc. It often requires one or both partners to spend significant amounts of time, money and unnecessary stress to produce the necessary evidence.

Although most states allow de facto couples to register their domestic relationship a prescribed set of […]

2809, 2017

Just in the knick of time! Deciding whether to apply the super reform CGT relief

By |September 28th, 2017|

The transitional CGT relief in the superannuation reform allows an SMSF to reset the cost base of any assets reallocated or re-apportioned from retirement phase to accumulation phase to comply with the transfer balance cap or new transition to retirement pension arrangements.

The relief applies where the re-allocation or re-apportionment occurred between 9 November 2016 and just before 1 July 2017.

Ordinarily, if a pension is commuted from retirement phase to accumulation phase, the earnings on assets supporting the commuted balances will become taxable.

The relief operates to ensure that tax does not apply to unrealized capital gains that have accrued on assets that were used to support pensions up until that time. The rationale for this treatment is that such gains would have been exempt from tax if the SMSF had realized those assets prior to commutation.

The relief is provided by deeming the fund to have sold and reacquired the relevant asset […]

2609, 2017

Konnie Lontos Joins the Team

By |September 26th, 2017|

We are very pleased to welcome lawyer Konnie Lontos to Bernie O’Sullivan Lawyers. Konnie works predominantly in commercial matters including negotiating and drafting agreements and documenting commercial transactions including sales of businesses and commercial leases. With a Bachelor of Laws, a Bachelor of Business (Banking and Finance) and a Graduate Diploma in Legal Practice, Konnie provides exceptional practical legal advice to our clients. Attention to detail, a solid work ethic and strong working relationships enables Konnie to achieve positive results that meet clients’ expectations.

2609, 2017

Let’s Get Physical: Changes Affecting the Small Business Company Tax Rate

By |September 26th, 2017|

We are regularly told to be more active for our physical wellbeing.

Similar advice now applies to companies – they need to be less passive.

To qualify for the small business company tax rate of 27.5%, a company needs to be a “small business entity” – that is, the company needs to carry on a business and have an aggregated turnover of less than $10 million.

On 18 September 2017, the Federal Government released draft legislation to “clarify that passive investment companies cannot access the lower company tax rate for small businesses”.

Before the proposed change, there was some doubt as to whether a company that derived investment income (such as rent, dividends and interest), or that received distributions of income from discretionary trusts, was carrying on a business so that it qualified for this concessional rate.

The ATO website states:

    “It is not possible to definitively state whether a particular company is carrying on a […]

2609, 2017

Small Business CGT Concessions and Property Sales

By |September 26th, 2017|

One of the consequences of the housing boom in Melbourne is that properties that have been used for farming businesses for many years are being sold to developers. These sales often raise significant tax issues.

Some of the more interesting examples on which we have worked include:

  • A husband and wife acquired a property of about 95 acres in 2003. The owners of the property operated a market garden and raised livestock on the property. In 2009, the owners could no longer actively work in the business, but they continued to operate the market garden and raise livestock with help from family and friends. In 2013, the owners ceased to operate the market garden and leased that part of the property to a neighbour but continued to raise livestock on the balance of the property.

    The owners received an offer for the sale of the property. Under the offer, the purchaser would pay […]