2021 TA Active asset test passed for "vacant" land used as storage Appeals note: The decision in the Administrative Appeals Tribunal was in favour of the taxpayer, allowing the use of the small business CGT concessions. The event was subsequently updated in January 2020 when the original decision was overturned by the Federal Court. In September 2020, the Full Federal Court then overturned the single judge decision, meaning the taxpayer once again may use the small business CGT concessions. The Full Federal Court advised that small business relief should be applied beneficially rather than restrictively for a taxpayer. The Commissioner of Taxation has not appealed to the High Court of Australia. The ATO issued a decision impact statement on 29 July 2021 where it will continue to review the impact of the decision on its advice and related products. Current decision in case: Land adjacent to taxpayer's main residence was used in the taxpayer's small business, and therefore passes the active asset test. Editor's note: The overview below and client impact statement were originally preserved as written for the January 2020 update. This allowed users to have full visibility of the arguments and opportunities which were subsequently overturned. In this instance, the overview and client impact statement have been amended to take into consideration various issues
Announced: 21-Feb-2019 Updated: 4-Aug-2021
identified by the Full Federal Court, and how they may apply to future private binding ruling applications for your clients.Residential land has been determined to be an active asset as it stored materials and tools for a taxpayer's business. The ruling from the Full Federal Court is in line with an earlier decision by the Administrative Appeals Tribunal, and has overturned the decision from a single judge appeal.This case is one of many which straddles the fence on whether unimproved land qualifies for as an active asset. In this case, the Full Federal Court concluded that the small business CGT concessions should be looked at beneficially for taxpayers, as is intended from the original legislation. The outcome of this case relies on the interpretation of "used in the course of carrying on a business" which is necessary for determining an active asset. The Full Federal Court has interpreted that this sentence does not use or imply restrictive language such as "ordinary course of a business" or "day to day running of a business".
SA COVID-19 stimulus and relief package Throughout the COVID-19 pandemic, the South Australian Government has implemented a range of stimulus payments for residents and businesses, as well as relief from state taxes. In response to the July 2021 South Australian lockdown: •
businesses with a reduction in turnover are eligible for emergency cash grants of up to $3,000
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a second round of business support grants of up to $3,000 available for businesses in eligible industries
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eligible events suffering significant losses from being cancelled or postponed can access funding of up to $25,000, and
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individuals outside the federal government's declared hotspot areas who lose work hours will be entitled to the COVID-19 Disaster Payment.
Announced: 26-Mar-2020 Updated: 13-Aug-2021
In addition to these grant payments to affected businesses, in the past relief from payroll tax and land tax has been available. In particular, smaller employing businesses have been given a waiver of payroll tax from March 2020 to May 2021. Land tax deferrals were available to landlords during the 2020 land tax year. Also, landlords who provided rent relief, or commercial property owner-occupiers who were eligible for JobKeeper, were eligible for reduction in land tax liabilities up to 30 April 2021.
FBT car parking ruling confirms commerciality principle includes shopping centre car parks The principles of car parking fringe benefits and commercial parking stations have been confirmed by the ATO via public ruling. The ruling, which has now been finalised after a long consultation process, replaces a now withdrawn tax ruling from 1996. The ruling details the concept of a commercial parking facility, which is necessary for businesses with over $10 million turnover that provide car parking for free to staff. Specifically, a major change in the ATO's interpretation of a commercial parking station exists where a shopping centre car park comes within its definition. As there is a major change in interpretation, the ATO has advised that the new ruling will not apply to car parking benefits until 1 April 2022. Note: When the new rule comes into effect for shopping centres, the small business turnover threshold for car parking benefits will have increased from $10 million to $50 million.
Announcement(22-Nov-2019) Consultation period Released(13-Nov-2019)
