Author: MIL-OSI Publisher

Source: Australian Parliamentary Secretary to the Minister for Industry

Karl Stefanovic:

Jim, good morning. Nice to see you. Looks like you just got out of the shower my man.

Jim Chalmers:

A couple of hours ago, Karl. Good morning. How are you?

Stefanovic:

The Coalition is taking a bath this morning. I mean, could you get more lucky?

Chalmers:

It’s obviously a mess on the former Coalition side of the parliament, but it’s really not our focus. As you said in your introduction, we saw interest rates cut yesterday for the second time in 3 months. We’re getting inflation down, we’re getting wages up, we’re keeping unemployment low. And that’s because our focus will continue to be on providing stable, responsible, considered, methodical economic leadership. And we saw some of the dividends of that yesterday when rates were cut again.

Stefanovic:

You’re restraining yourself from talking about it. I see that in your eyes, Jim. I’m sure it’s the scuttlebutt around town. Look, the makeup of the parliament we looked at it this morning, you guys weren’t that bloody good.

Chalmers:

We’re very grateful for the magnitude of the victory that we saw a few Saturdays ago. We’ve made it really clear we’re grateful for the support that was shown by the Australian community. I think they did go for that stability and that responsible economic management. We’ll hear more about that later today when our campaign director fronts the National Press Club.

But we don’t want to waste the day. We’re grateful for the opportunity. We know that a second term is an opportunity to build more homes and roll out more renewables, make our economy more productive, get on top of this inflation challenge, help with the cost of living. And so that’s been our focus, really, throughout the first term, throughout the campaign, and it will be the major focus of our second term too.

Stefanovic:

Have you spoken to the PM about the Coalition dramas? I mean, as Phil Coorey points out this morning: the Prime Minister may as well do another couple of laps of the sun.

Chalmers:

I haven’t spoken to him about the Coalition. Obviously, we’ve had some interactions while he’s been overseas, but not about that. And on the second part of your question, I genuinely believe that things change quickly in politics. We’re not getting ahead of ourselves. Our working assumption is that elections are typically close in this country. The last one, notwithstanding, was a better result than what most people were anticipating. But we don’t underestimate our political opponents, and we don’t focus on them.

Yesterday was a big event, it was a shambles, it was a mess, but it wasn’t our focus. My focus yesterday was on this interest rates decision which will provide welcome relief for millions of Australian families. We’ll continue to focus on the things that really matter to people, even while our political opponents continue to focus on themselves.

Stefanovic:

You’re expecting more mortgage relief later in the year. There are – plenty of speculation this morning that’s going to drive prices through the roof. How much of a concern is that?

Chalmers:

I don’t make predictions about future decisions taken by the independent Reserve Bank. Certainly the market and the economists expect that there will be more interest rate cuts to come and that won’t be the only factor when it comes to house prices. House prices are usually a combination of a whole range of factors. And so our focus is on continuing to put this downward pressure on inflation, keep unemployment low, get wages growing again, roll out our cost‑of‑living help and also build more homes because we want people to be able to access more affordable options.

Stefanovic:

All right. Finally, we now know Australia’s biggest super funds asked you to reconsider the super tax. They’ve had no luck with that. You’re staying stubborn on that, you will not change it?

Chalmers:

First of all, they said that publicly a couple of years ago. They made a public submission to, when we did one of the 3 rounds of consultation we did on these changes. We haven’t changed our policy that we took to the election. The policy that we announced a couple of years ago. I listen respectfully when people have got a range of views about this policy or indeed any policy, but we’ve made it clear what our priority is here and that’s how we intend to progress.

Stefanovic:

Can you fix the train network in Sydney this morning for us just before we go?

Chalmers:

I just saw that story on your news a bit earlier on. I hope people can get safely to work and that those issues can be resolved as quickly as possible.

Stefanovic:

Good on you, Jim. Always good to talk to you.

Chalmers:

Thanks Karl, you too.

Source: New places to play in Gungahlin

When considering trustee resolutions in the lead up to 30 June, it’s important for trustees of family trusts who have made a Family Trust Election (FTE), or entities with an Interposed Entity Election (IEE) to:

• review their FTEs and IEEs
• understand who is in their family group.

This is critical to help lower the risk of any FTDT liabilities arising.

Once a valid FTE or IEE is made, it’s important to be mindful of who the specified individual is (for each election). This is because there is a strict legal definition of family group, and it’s based on who the members of the ‘specified individual’s’ family group are. Often in private groups, there may be multiple family trusts with different specified individuals (which means there will be differences in who is in the ‘family groups’). There may have also been expansion of the business with new entities or changes in family members (e.g. if there was a divorce). While the election is in effect, FTDT will apply if any distributions are made outside the family group. FTDT is a 47% tax, payable by a trustee, director, or partner.

To ensure you don’t trigger FTDT liabilities, before making distributions, trustees should:

• maintain strong governance and record-keeping practices
• understand what FTE or IEE elections an entity or group has in place
• identify the members of the specified individual’s family group.

Trustees should review this information on an annual basis and keep these elections front of mind when administering their tax affairs.

The Commissioner has no discretion to ignore the application of FTDT, cannot limit the period FTDT applies and has no power to extend the time to revoke or vary elections.

If you’ve not made an FTE or IEE before, or are considering making one at the end of the financial year, it’s important to consider both the current and future impacts of making the election. While the concessions from making elections can be advantageous, there can be future limitations, constraints and potentially significant financial impacts for the private group for generations to come. 

We’re seeing an increase in FTDT issues due to inadequate record keeping, succession planning, intergenerational expansion of businesses and evolving private groups. We encourage trustees and their advisers to review now.

If you’re unsure about any matters related to FTE or IEEs you should speak to your registered tax agent.

Resources

Web content:

• Family trusts concessions – our web content covers FTEs, IEEs, the benefits of family trusts and FTDT.
• Trusts – favourite or bookmark our comprehensive Trusts web content so you can access it whenever you need it.

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Source: Northern Territory Police and Fire Services

Source:

The attached Incoming Government Brief for the mental health portfolio outlines the mental health sector’s priorities for the Albanese Government in the first 100 days and first year, as well as the ongoing reforms the sector is keen to see the government continue to deliver.

Source: New places to play in Gungahlin

Source: Northern Territory Police and Fire Services

The Northern Territory Police Force has charged a 45-year-old male with murder following the death of a 62-year-old male in Palmerston on 19 February 2025.

Following the incident the male was arrested and the victim was conveyed to Royal Darwin Hospital with serious injuries.

The 45-year-old male was initially charged with recklessly endanger serious harm and aggravated assault and was remanded to appear in Darwin Local Court on the 14 April 2025.

Over a week later on 2 March 2025, the victim passed away.

Serious Crime detectives upgraded the 45-year-old males charges to murder on the 14 April 2025 and he was remanded to appear in Darwin Local Court today.

Source: New places to play in Gungahlin

Selling a business

The sale of a business generally occurs through the disposal of either:

• the shares or other ownership interests in the entity that conducts the business
• all of the tangible and intangible assets in the business.

When preparing to dispose of your business, we encourage you to consider your tax governance for the transaction and the tax consequences.

For more information, see:

Record keeping

Both the vendor and purchaser need to retain documentation evidencing the transactions, including:

• contracts
• minutes of meetings recording why the business was to be sold and decisions relating to the transaction by the directors and other key decision makers
• communications between the vendor and purchaser relating to the negotiations, including any allowance for liabilities
• details of the assets disposed of under the contract, the apportionment of the purchase price to the various assets and the basis for the apportionment
• capital gains tax (CGT) calculations, including the
  • allocation of purchase price to depreciating assets
  • basis for this allocation
  • treatment of consideration held in escrow
• any advice detailing why the particular tax position has been taken
• settlement documentation
• asset registers
• trust resolutions creating income or capital entitlements of beneficiaries.

Revenue or capital transaction

Where you dispose of an asset, you need to determine whether it should be treated as a revenue or capital transaction.

You can find relevant information and views in documentation, such as minutes of meetings, business plans, documented discussions with stakeholders and consultants and financial statements.

Disposing of a business to a related party

Where you dispose of the business to a related party, you should get an independent valuation of the business, including the goodwill, assets and contractual rights being disposed of.

Interest expense

There may be an impact on the interest expense that can be deducted if the disposal of an ownership interest in a business results in a change to the entity’s debt to equity ratio. You may need to recalculate this at the relevant time.

Disposing of part of a business

You may partially dispose of your business by:

• creating a new class of shareholders or unit holders, or by amending rights for existing share classes
• disposing of a portion of shares
• retiring from a partnership
• admitting a new partner into your partnership.

As a result of the above changes, you may need to amend key documents such as the company’s constitution, trust deed, or partnership agreement.

The rights of the existing shareholders or unitholders may also be affected. Where this occurs, the existing shareholders, unitholders and partners should consider any tax consequences, such as capital gains, value shifting and limitations on future deductions or capital losses.

More complex business disposals

More complex or non-traditional business disposals often give rise to a range of tax issues and require risk mitigation. Good tax governance will ensure that you identify, assess and manage these issues.

You should carefully consider and document transactions and the commercial business drivers.

Some of the more complex business disposals that may require additional tax governance include:

• earn-out arrangements
• scrip-for-scrip rollovers
• share buy-backs and capital reductions
• business restructuring
• listing on a stock exchange
• exit from a consolidated group
• the use of a demerger to facilitate the disposal of the business
• multiple events and transactions that occur just before or on the date of the business disposal.

We encourage you to seek advice from a tax adviser if you are unsure of the tax consequences.

You may also wish to engage with us for advice directly before entering the transaction. We can help reduce uncertainty by clarifying how the tax law relates to your particular circumstances.

Earn-out arrangements

The disposal of a business that includes an earn-out arrangement can take several forms. Good governance practices include:

• retaining the sale contract and other relevant agreements
• considering changes in the law examining the terms of the earn-out arrangement and identifying the contingent and non-contingent rights
• considering if there is a reverse earn-out arrangement
• estimating the value of the earn-out right and retaining documentation to support the estimate
• getting tax advice and preparing the capital gains tax calculations for the income year in which the disposal occurred
• comparing the amounts actually received under the earn-out clauses to the amount estimated.

Scrip-for-scrip rollovers

When you have a CGT event that results in a capital gain, a rollover may be applied, for example, a scrip-for-scrip rollover. Generally, this occurs where a seller exchanges a share in a company (or trust interest in a trust) for a share in another company (or trust interest in another trust).

Effective governance involves retaining key documentation to provide you with certainty. It should be readily accessible if we review the transaction.

Key documentation to retain may include:

• minutes of meetings or other documentation recording proposals, deliberations and negotiations prior to entering into the transaction
• minutes of decisions to proceed with the transaction and executed contract documents
• evidence of the interests exchanged (such as share certificates or unit registers)
• details of the CGT profile of interests, such as cost base and any pre-CGT status
• valuations
• other workings, papers or advice setting out the conditions and how they have been satisfied.

Listing on a stock exchange

Where a business owner is looking to dispose of the shares in a business via listing on a stock exchange through an initial public offering (IPO), back-door listing or reverse take-over, good tax governance practices may include:

• considering the Australian Securities Exchange (ASX) and Australian Securities and Investments Commission requirements and their tax consequences
• getting advice on the CGT treatment of any disposal of shares held by the existing shareholders
• documenting the transactions and tax impacts, including considering whether the CGT discount and a full or partial CGT rollover apply
• considering how any additional amounts to which the existing shareholders are entitled after the event (such as additional shares or earn-out amounts) will be treated for tax purposes.

A back-door listing generally involves the disposal of an entity’s shares or assets to a company that is currently listed on the ASX. Interests sold between related parties through back-door listings should be subject to independent market valuations.

Exit from a consolidated group

Where a consolidated group disposes of a partial or the full interest in a subsidiary member, resulting in it leaving the group, effective governance practices include:

• retaining the sale contract and agreements
• preparing a statement of financial position in accordance with accounting standards as at the date of exit
• ensuring that the assets and liabilities appearing on the statement of financial position reflect market values
• undertaking allocable cost amount exit calculations
• calculating the capital gain or loss resulting from the disposal of the interest in the subsidiary member
• getting a valuation to determine the subsidiary’s market value where the purchaser is a related party
• notifying us of any changes to membership.

For more information, see Consolidation.

Source: New places to play in Gungahlin

Source: New places to play in Gungahlin

Closing an entity in your private group

You may decide to close an entity in your private group or your entire business.

The disposal of assets, liquidation or vesting of entities may have tax consequences.

Effective tax governance when closing a business will help mitigate risk and provide practical certainty for stakeholders.

For more information, see Changing, selling or closing your business.

Companies

When a company is wound up, liquidated or deregistered, you should retain documentation for tax governance purposes. This may include:

• contracts for sale of assets
• documentation to evidence the forgiveness of loans
• minutes of meetings.

In some cases, you may be legally required to retain this information.

Example: winding up a company

Spin Records has been a profitable company for many years. However, due to a change in consumer demand and the economy, its company directors believe it is no longer viable to continue to carry on the business.

The directors decide to liquidate and deregister Spin Records before it becomes unprofitable, rather than dispose of the business. They agree to engage a liquidator to start winding up the company in 3 months. This allows it to fulfil its final contracts with customers.

Before commencing liquidation, a dividend is declared and paid to the shareholders. The assets of the company are then sold. The proceeds and cash reserves are used to pay creditors. Loans provided to shareholders are forgiven. A final dividend is declared by the liquidator and paid to shareholders before the company is deregistered with ASIC.

Spin Records needs to retain the following documentation for tax purposes:

• minutes of meetings documenting key decisions relating to the winding up, liquidation and deregistration
• minutes of directors’ meetings relating to the dividends declared and paid
• minutes of meetings conducted by the liquidator
• analysis of the tax consequences of the sale of assets and the forgiveness of loans to related parties
• the final tax return and details of payment of tax liabilities.

The company’s shareholders also need to keep documentation to substantiate the cost base of shares in the company for capital gains tax purposes.

End of example

For more information, see:

Trust vesting

Where a trustee is intending to vest a trust, they should carefully examine the trust deed to ensure adherence to its terms.

The trustee should:

• Make written trust resolutions to record the trustee’s decisions throughout the vesting process. This is particularly important where the trustee has the discretion to exclude the distribution of income or capital from the winding-up process to one or more beneficiaries, unit holders, or classes of unit holders.
• Document forgiving or assigning related entity loans receivable and payable, and determine the tax consequences of forgiving a loan.
• Examine the rights attached to each unit class, where the trust is a unit trust. This will determine which unit classes are eligible to receive distributions if the trust is being wound up.
• Record the decision made if the trust deed provides for the trustee to transfer assets to a beneficiary or unit holder to satisfy a distribution of income or capital where the trust is being wound up.
• Consider getting a market valuation of the asset. This will show that the asset being transferred does not exceed the amount to which the beneficiary or unit holder is presently entitled. A transfer of the asset could potentially result in a capital gains tax event to the trust. The trustee should consider the tax consequences.
• Notify beneficiaries and unit holders of their share of the income or capital of the trust so they can determine and report their tax obligations.

Partnerships

Where a partnership ends, a final partnership distribution will be necessary.

Each partner will need to retain documentation to substantiate the cost base of their respective interest in the partnership for capital gains tax purposes.

Source: New places to play in Gungahlin