Category: MIL-OSI

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Income from leasing of real property

Source: New places to play in Gungahlin

Item

Activity

Responsibility

Purpose

4

Repairs and maintenance (R&M)

Receipts to be retained and maintained (by property) for all R&M expenditure. Where repairs are managed through the property manager, receipts to be furnished, downloaded and stored.

R&M expenditure will be recorded in the Excel spreadsheet entitled ‘Rental property financial accounts” and be referenced to the relevant property, within 3 days of payment of the invoice. Accumulated totals should be maintained within the spreadsheet.

Bill Bookkeeper

Ensure records of Mr Simple’s investments in real property are not lost in the event primary information sources are compromised.

5

Interest expense

Documentation regarding any external financing obtained to acquire or improve real property assets is to be retained. Documentation should include points explaining:

  • the date the finance was obtained
  • the purpose of obtaining finance
  • how the finance was applied, and
  • the applicable interest rate or other terms upon which the finance was obtained.

Interest expenses are recorded in the Excel spreadsheet entitled ‘Rental property financial accounts’. Accumulated totals should be maintained within the spreadsheet.

Bill Bookkeeper as informed by Simple groups lawyers or tax agents

Support the John Simple property trust’s claim for interest deductions that are associated with the debt funding of its property portfolio (where and when required).

6a

Depreciation (Division 40)

On initial acquisition of real property, a tax depreciation schedule will be obtained from a qualified valuer or quantity surveyor.

Bill Bookkeeper and Simple group’s tax agents/advisors

To help ensure that the John Simple property trust is using the correct tax cost bases when determining the amount it can claim as capital allowance

6b

The costs of existing and new depreciable assets held by the John Simple Property Trust are to be recorded on an Excel spreadsheet entitled ‘tax fixed asset register’ that includes:

  • a description of the asset
  • the date asset was ready for use
  • a calculation of the assets tax cost
  • the method and rate of depreciation applied to the asset
  • the capital allowance claim for the year
  • the assets closing cost.

For purpose of calculating depreciation, use the Commissioner’s effective lives for depreciating assets guidance as published each year in the ATO’s Taxation Ruling.

For all new depreciable capital assets that are acquired, receipts are to be maintained and referenced against the tax fixed asset register (including low value pools).

Bill Bookkeeper and Simple group’s tax agents/advisors

To support the John Simple property trust’s claim for capital allowance deductions in the year of income in which the claim is made.

6c

Where depreciable assets are disposed of, the tax fixed asset register will record:

  • the date of the disposal
  • sale price
  • the balancing income/loss recognised on disposal.

Bill Bookkeeper and Simple group’s tax agents/advisors

To help ensure that gains or losses on disposal of depreciable capital assets by the John Simple property trust are calculated correctly for tax purposes.

7a

Capital works (Division 43)

Upon acquisition of an existing real property asset that’s not vacant land, a determination will be made about the percentage rate at which capital works deductions can be claimed.

On initial acquisition of an existing real property, a tax depreciation or capital works schedule will be obtained from the property’s previous owners or obtained from a qualified quantity surveyor.

Upon incurring new expenditure on capital works, a determination will be made about the percentage rate at which capital works deductions can be claimed.

Note: Generally, the Simple group acquires assets for which the 2.5% rate is applied.

Bill Bookkeeper and Simple group’s tax agents/advisors

Ensure that the John Simple property trust’s is eligible to claim capital works deductions in respect to a particular property, the cost base by reference to which capital works deductions can be claimed and the percentage to be used when claiming capital works deductions each year.

7b

For new capital works, receipts should be retained and referenced against the tax fixed asset register.

Details of new capital works are recorded on an Excel spreadsheet entitled ‘tax fixed asset register’ that includes a

  • description of the capital works
  • date the capital works were completed
  • cost of the capital works
  • percentage deduction rate applied (for example 2.5%)
  • deduction claimed for the year
  • closing balance of unclaimed construction expenditure at year end.

Any complex issues concerning the application of, or calculations required by Division 43, should be escalated to the Simple group’s tax advisors.

Bill Bookkeeper and Simple group’s tax agents/advisors

Substantiate capital works deductions for the year. Help ensure compliance with the Simple group’s record keeping obligations.

Support the John Simple property trust’s claim for capital works deductions.

Accessing sophisticated levels of advice helps ensure complex issues with capital works claims are treated correctly.

8

Other expenses

A list has been (or should be) prepared and retained that outline and explains typical expenses incurred by the John Simple property trust in the course of its property leasing activities.

Accounting expenses should be recorded (by property) in the Excel spreadsheet entitled ‘Rental property financial accounts for the year ended 30 June 20XX’, within 3 days of the supplier invoice being received. Accumulated totals should be maintained within the spreadsheet.

Bill Bookkeeper

Ensuring typical expenses associated with each property portfolio are understood and explained – for succession planning.

Support John Simple property trust’s claims for allowable deductions.

9

Prepaid expenses

Where eligible expenditure has been prepaid, maintain records of prepayments. Prepare an accompanying note that explains the nature of the prepaid expenditure and relevant time period to which the expenditure relates (more or less than 12 months).

Bill Bookkeeper

Help with preparation of the John Simple property trust’s draft tax reconciliation.

Support John Simple property trust’s claims for allowable deductions.

10

Before forwarding information to the Simple group’s tax agent, review the following spreadsheets and resources against a sample of documentation to sense check that income and expenses have been captured and correctly recorded.

  • Real Property Investment Register
  • List of typical expenses
  • Tax and accounting fixed asset register

Bill Bookkeeper

Helping ensure that Mr Simple’s income and expense disclosures are complete.

11

At least 4 weeks before the due date for lodgment of the John Simple property trust’s tax return, provide the Simple group’s tax agent with:

  • a summary narrative about the John Simple property trusts typical and atypical activities during the year
  • real property investment register
  • the property manager’s end of financial year summary statement for each property investment
  • excel rental property financial accounts
  • tax and accounting fixed asset registers
  • related source documents as required by the tax agent
  • notes concerning any prepaid expenses.

Bill Bookkeeper

Ensuring the John Simple property trust’s tax return is lodged on time.

Helping the tax agent with the process of preparing the John Simple property trust’s tax return.

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Tax governance guidance for passive investors

Source: New places to play in Gungahlin

Purpose of this guide

As part of the Top 500 program for privately owned and wealthy groups, the ATO has developed guidance to help private groups who undertake passive investment with developing tax governance over the material tax issues they have to manage.

In particular, this guide will help with principle 2 of the 7 principles of effective tax governance – recognise tax issues and risks.

Tax governance for passive investment activity

This guide is not intended to identify every tax issue that might arise from the passive investment activities carried out by Top 500 private groups. For the purposes of this guide, the term ‘passive investment activity’ may have a different meaning to the ordinary meaning of ‘passive investment’.

The 3 classes of passive investment activity that are considered in this guide are:

  1. Income from shares in listed companies
  2. Income from leasing of real property
  3. Interest income

This guide provides an example of what tax governance could look like for:

  • groups who take a simple approach to investing in each of the 3 asset classes
  • more complex approaches to managing investments in listed shares.

We recognise that this guide may have limited application to groups who have large portfolios of diversified investments and sophisticated controls in place to govern their investment activities.

These examples are not reflective of any specific private group. Its purpose is only to highlight the tax issues that arise and level of detail that should be considered when developing effective tax governance.

Designing processes and procedures

The attached guidance is intended to help by showing how well designed (and tailored) tax governance processes and procedures can be put into place. However, Top 500 private groups also need to ensure that those well-designed processes and procedures are carried out.

The list of tax issues is not exhaustive, and the processes and procedures required by each Top 500 group may be different depending on their circumstances.

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Income from shares in listed companies

Source: New places to play in Gungahlin

Tax issues for consideration

The following table provides a list of tax issues requiring assurance in relation to income derived by a Top 500 group from investments in shares in listed companies. The table also provides examples of processes and procedures that could be developed by a Top 500 group to show that they have effective tax governance in place to manage each tax issue.

Tax issues requiring assurance

Tax issue

Tax assurance considerations

Tax governance considerations

Record keeping – source documents

Good record keeping supports the ATO’s ability to assure that Top 500 groups are paying, and will continue to pay, the correct amount of tax. Record keeping is also a requirement for under Division 121 and section 262A.

The tax governance policy of the group should include procedures for:

  • maintaining a central repository for documentation that records the acquisition and disposal of listed share investments held by the group (including dates of acquisition and disposal, cost of acquisition, proceeds on sale)
  • maintaining a central repository for documentation that records:
    • dividend statements received by the group from its investments in listed shares
    • other corporate actions such as share splits, rights issues.

Completeness of dividend income disclosures

Has all dividend income from listed shares been identified and disclosed in the entity’s tax returns?

The tax governance policy of the group should include procedures for:

  • ensuring that, when listed shares are acquired, that the relevant share registry services are notified of the holding entities TFN
  • correctly capturing and recording dividend income
  • where dividends are paid in cash, reconciling dividend payment advices with deposits into the group’s bank accounts
  • sense or cross-checking the completeness and accuracy of the group’s dividend income calculations
  • differentiating unfranked, partially franked and franked dividends
  • recording and adjusting (tax payable) for any TFN withholding withheld by the company paying the dividend.

Dividend income is reported in the correct period

Has dividend income from listed share investments been reported in the correct income year?

The tax governance policy of the group should include procedures for:

  • specifying when dividend income is to be recognised for both accounting and tax purposes
  • ensuring any timing differences between accounting and tax treatments is captured on the recipient entity’s tax reconciliation.

Franking credits are correctly reported

Have franking credits attached to dividends from listed shares been correctly reflected in the recipient entity’s tax returns?

The tax governance policy of the group should include procedures for:

  • ensuring the group entity that is in receipt of franked dividends satisfies the qualified person test (45 day holding and ‘at risk’ rules) with respect to the dividend
  • including franking credits in the relevant group entity’s assessable income
  • taking into account franking credits when calculating the recipient entity’s tax payable
  • ensuring that the balance of the group’s franking accounts correctly reflects franking debits and franking credits arising during the year
  • where required, and the eligibility requirements are met, converting excess franking credits into tax losses.

Characterisation and calculation of capital gains and losses on the disposal of investments in listed shares.

Has the vendor entity correctly characterised and reported gains and losses on the sale of investments in listed shares?

The tax governance policy of the group should include procedures for:

  • classifying listed share investments held in the central repository as held on either revenue or capital account
  • correctly calculating capital gains or losses on sale of listed shares, including (but not limited to) the recognition of:
    • whether gains or losses are on capital (or revenue) account
    • cost base and proceeds
    • the vendor entity’s eligibility for the CGT discount
    • cost base adjustments from capital returns
    • brokerage fees
    • current and prior year capital losses
  • conducting a sample verification process of the numeric logic embedded in the books, software or spreadsheets used to do CGT calculations, to ensure that the logic is producing the correct outcomes.

Correct reporting

Has the entity who derived the dividend income or who made the capital gain or loss, reported correctly in their tax return?

The tax governance policy of the group should include procedures for ensuring that dividend and capital gains tax information is migrated across from the working papers and correctly disclosed in the relevant entity’s tax return.

Governance framework example

To help in developing a written tax governance framework, we have prepared 2 examples that could be used to develop checklists that may help in managing dividend income as required under principle 2 of the 7 principles of effective tax governance

Passive investors with simple affairs – checklist

Group head: Mr John Simple

Entity name: Mr John Simple

Checklist: Dividend income and capital gains/losses

Year end: 30 June 2022

Record keeping – investments in listed shares and dividend income

Item

Activity

Responsibility

Purpose

1

The John Simple group shall maintain a central repository for documentation concerning:

  • the acquisition (including acquisition of shares through a Dividend Reinvestment Plan (DRP) or similar) and disposal of listed share investments held by Mr Simple
  • dividends received by Mr Simple from investments in listed shares
  • other corporate actions such as share splits and rights issues associated with Mr Simple’s investments in listed shares.

Acquisitions (including acquisition of shares through a DRP or similar) and disposals of listed share investments including dates, number of shares acquired or sold, prices, and brokerage fees, should be recorded in the Excel spreadsheet entitled ‘Share Investment Register’ within 3 days of the date of acquisition or sale.

Bill Bookkeeper

Good record keeping practices over all of Mr Simple’s investments in listed shares.

2

At the end of each month back up electronic copies of documentation in the central repository and the share investment register to a plug-in hard drive, or memory stick.

Bill Bookkeeper

Ensure records of Mr Simple’s investments in listed shares are not lost in the event primary information sources are compromised.
Correct reporting of dividend income

Item

Activity

Responsibility

Purpose

3

Share registries are to be notified of Mr Simple’s TFN and custodians are provided with details of the bank account through which Mr Simple finances his investments.

Bill Bookkeeper

Remove TFN withholding risk. Ensure cash dividends are received into the correct bank account.

4

The timing and amount of the dividend (including franking credits and dividends re-invested through a DRP) paid on each listed share investment held by Mr Simple should be recorded in the Excel spreadsheet entitled ‘Share Investment Register’, within 3 days of dividend statements being received. Accumulated totals should be maintained within the spreadsheet.

Bill Bookkeeper

Ensuring Mr Simple’s dividend income disclosure is complete and referable to the correct year of income.

5

The “Share Investment Register” is updated to include additional shares issued as part of Mr Simple’s choice to participate in a DRP.

Bill Bookkeeper

Ensuring new shares issued as part of a DRP are recorded as an asset acquired by Mr Simple.

6

Reconcile cash dividend payments deposited to Mr Simple’s investments bank account with dividend statements.

Bill Bookkeeper

Helping ensure Mr Simple’s dividend income disclosure is complete.

7

Before forwarding information to tax agent, review spreadsheet to sense-check listed share investments held against dividend statements received to verify that dividends and franking credits have been captured and correctly recorded as expected.

Bill Bookkeeper

Helping ensure that Mr Simple’s dividend income disclosure is complete.

8

At least 4 weeks prior to the due date for lodgment of Mr Simple’s tax return, provide Mr Simple’s tax agent with:

  • Mr Simple’s share investment register spreadsheet for the income year
  • related source documents as required by the tax agent.

Bill Bookkeeper

Helping ensure that Mr Simple’s tax return is lodged on time.

Helping the tax agent with the process of preparing Mr Simple’s tax return.
Mutual responsibilities

Item

Activity

Responsibility

Purpose

9

Tax agent to provide an annual engagement letter to Mr Simple that specifies the tax agents and Mr Simple’s responsibilities under the engagement.

TAG & Mr Simple

To provide clarity around:

  • Mr Simple’s responsibility for providing complete and accurate information
  • tax agents’ responsibility for ensuring that all dividend income, franking credit entitlements, and capital gains (losses) are correctly recorded in Mr Simple’s income tax return.
Tax agent’s responsibilities – preliminary

Item

Activity

Responsibility

Purpose

10

Logic check dividend income and franking credit calculations in Mr Simple’s Share Investment Register spreadsheet.

Tax agent

Integrity check over primary data source from which dividend income information is obtained.

11

Verify that Mr Simple’s franking credit entitlements satisfy the 45 day holding period rule

Tax agent

Confirm Mr Simple’s eligibility to claim franking credits.

12

Calculate capital gains and losses on the disposal of listed share investments that occurred during the year.

As a competent professional Mr Simple’s tax agent is across the method statement in s102-5 and the issues that are relevant to the correct calculation of gains and losses arising from the disposal of investments in listed shares.

Tax agent

Correct calculation of capital (or revenue) gains and losses made by Mr Simple during the income year.

13

Retain and file working papers

Tax agent

Retention of records that support tax return disclosures.
Tax agent’s responsibilities – Income tax return preparation

Item

Activity

Responsibility

Purpose

14

Dividend income and franking credits derived by Mr Simple during the year are migrated across from the Share Investment Register spreadsheet across to Mr Simple’s income tax return.

Tax agent

Correctly capture dividend income in Mr Simple’s tax return.

15

Dividend income totals in Mr Simple’s final return are checked back to the Share Investment Register spreadsheet.

Tax agent

Ensure calculations align with information included in the tax return.

16

Capital gains tax calculations carried out by the tax agent are migrated from the tax agent’s working papers across to Mr Simple’s tax return and accompanying schedules.

Tax agent

Ensure capital gains and losses are correctly reported.

17

Verify that the correct amount of franking credit offsets are included in the calculation of Mr Simple’s tax payable.

Tax agent

Helps ensure that the calculation of tax payable by Mr Simple is correct.

Passive investors with complex affairs – checklist

Group head: Ms Joan Complex

Entity name: Complex Investments Pty Ltd (Complex Co)

Checklist: Dividend income and capital gains/losses

Year end: 30 June 2022

Record keeping – investments in listed shares and dividend income

Item

Activity

Responsibility

Purpose

1

Complex Co shall maintain a central database repository for documentation concerning:

  • confirmations of the acquisition – including acquisition of shares through a Dividend Reinvestment Plan (DRP) or similar – and disposal of listed share investments carried out directly by Complex Co
  • dividends statements received by Complex Co from investments in listed shares
  • notifications of other corporate actions such as share splits, rights issues associated with Complex Co’s investments in listed shares.

Information is to be captured in Complex Co’s tailored investment management software package.

Investment Management team

Good record keeping practices over the source documents that record Complex Co’s direct investments in listed shares.

2

Complex Co will record acquisitions (including acquisition of shares through a DRP or similar) and disposals of listed share investments including:

  • whether the share was acquired on revenue or capital account
  • the date of acquisition or sale
  • the number of shares acquired or sold
  • the price at which the shares have been acquired or sold
  • brokerage fees
  • in the management software on the date of the transaction.

Investment Management team

Good record keeping practices over the ongoing management of Complex Co’s portfolio of direct investments in listed shares.

3

Summary transactional information captured in the management software is migrated to Finance Department’s accounting software each day.

Investment Management team/Finance team

Ensures transactional activities of the investment management team can be reconciled to bank and integrated into Complex Co’s daily P&L and Balance Sheet.

4

At the end of each week back up in the management software files to Complex Co’s cloud repository.

Investment Management team

Ensure records of Complex Co’s investments in listed shares are not lost in the event primary information sources are compromised.
Correct reporting of dividend income

Item

Activity

Responsibility

Purpose

5

Share registries are notified of Complex Co’s TFN and provided with its bank account details.

Investment Management team

Remove TFN withholding risk. Ensure cash dividends are received into the correct bank account.

6

The timing and amount of the dividend (including franking credits and dividends re-invested through a DRP) paid on each listed share investment held by Complex Co should be recorded in the management software on the same day as dividend statements being received.

Investment Management team

Ensuring Complex Co’s dividend income disclosure is complete and referable to the correct year of income.

7

Dividend information captured in the management software is migrated to Complex Co’s Finance Department’s accounting software each day.

Investment Management team/Finance team

Ensures dividends received can be reconciled to bank and integrated into Complex Co’s daily P&L.

8

The management software is updated to include additional shares issued as part of participation in a DRP.

Investment Management team

Ensuring new shares issued as part of a DRP are recorded as an asset.

9

Reconcile cash dividend payments deposited to Complex Co’s bank account with dividend statements.

Financial accounting team

Helping ensure Complex Co’s dividend income disclosure is complete

10

Dividend information is analysed to verify whether Complex Co satisfies the 45 day holding period rule in relation to the franking credits attached to each dividend that has been paid to it.

The balance of Complex Co’s franking credit entitlements are to be maintained on an on-going basis with the annual total included as a preparatory note to the tax return working file. This is to ensure that franking credits are recognised (added back) in Complex Co’s tax reconciliation and final tax calculation.

In-house tax accountant

Helping ensure that Complex Co’s franking credit entitlements are accurate and correctly disclosed.

11

Franking account to be maintained

In-house tax accountant

Assign accountability for ensuring that Complex Co’s franking account is accurate and correctly disclosed.

12

At year-end dividend information is analysed to identify any final dividend entitlements that have been declared but which remain unpaid. Any differences are included as a preparatory note to the tax return working file to ensure that they are recognised in Complex Co’s tax reconciliation.

In-house tax accountant

To help ensure that timing differences are taken into account when income is recognised for accounting and tax.
Correct reporting of capital gains and losses

Item

Activity

Responsibility

Purpose

13

Extract trading information from the management software and:

  • quantify and prepare tax reconciliation adjustments for (unrealised M2M) accounting gains and losses
  • prepare draft calculations of realised capital gains and losses on the disposal of listed share investments that occurred during the year.

Complex Co’s in-house tax accountant should have the capability to carry out capital gains tax calculations for disposals of listed shares and to apply the method statement in s102-5. Where required the in-house tax accountant will refer complex issues across to Complex Co’s tax agent/advisors.

In-house tax accountant

Adjustments for accounting gains and losses are captured on the tax reconciliation.

Correct calculation of capital (or revenue) gains and losses.
Mutual responsibilities

Item

Activity

Responsibility

Purpose

14

Tax agent to provide an annual engagement letter to Complex Group that specifies the tax agents and Complex Co’s responsibilities under the Complex Co tax return preparation engagement.

TAG & Complex Co’s group CFO

To provide clarity around:

  • Complex Co’s responsibility for providing complete and accurate information
  • tax agent’s responsibility for ensuring that all dividend income, franking credit entitlements and capital gains (losses) are correctly recorded in Complex Co’s income tax return.
Information transfer from complex company to tax agent

Item

Activity

Responsibility

Purpose

15

At least 4 weeks prior to the due date for lodgment of Complex Co’s tax return, the Financial Controller will need to provide their tax agent with:

  • Statutory Financial Statements
  • trial balance
  • dividend income figures and supporting calculations
  • notes and working papers that were prepared in support of accrual adjustments and Complex Co’s franking credit entitlements
  • capital gains tax calculations and working papers
  • related source documents as required by the tax agent.

Financial Controller supported by in-house tax accountant

Helping ensure Complex Co’s tax return is lodged on time.

Helping the tax agent with the process of preparing Complex Co’s tax return.
Tax agent’s responsibilities – Income tax return preparation

Item

Activity

Responsibility

Purpose

16

Review Complex Co’s dividend income, franking credit, and capital gains tax working papers and draft calculations. Make inquires of Complex Co as required and adjust calculations as necessary.

Tax agent

Integrity check over primary data source from which dividend income information for Complex Co is obtained.

17

Reconcile calculations back to Complex Co’s trial balance.

Tax agent

Integrity check over primary data source from which dividend income information for Complex Co is obtained.

18

Prepare Complex Co’s tax reconciliation including taking steps to:

  • add back franking credit entitlements
  • adjust for prior and current year accrued dividend income
  • subtract (add-back) current year accounting gains (losses) on investments in listed shares
  • recognise (add-back) realised net (revenue or) capital gains
  • include a note showing Company tax return label field disclosures for each line item.

Tax agent

Given that the tax reconciliation is a working paper that is central to the tax return preparation process for Complex Co it’s important that accounting and tax differences are correctly captured and that the source of each adjustment is traceable.

19

Migrate dividend income total from the working papers to Complex Co’s income tax return.

Tax agent

Correctly capture dividend income in Complex Co’s return.

20

Prepare capital gains tax schedule and migrate net capital gain figure across to income tax return.

Tax agent

Ensure capital gains and losses are correctly reported in Complex Co’s return.

21

Verify that the correct amount of franking credit offsets are included in the calculation of Complex Co’s tax payable.

Tax agent

Ensure calculation of Complex Co’s tax payable is correct.

22

Retain and file Complex Co’s tax return working papers

Tax agent

Retention of records that show how Complex Co’s tax return disclosures and tax payable have been determined.
Posted on

Interest income

Source: New places to play in Gungahlin

Tax issues for consideration

The following table provides a list of tax issues requiring assurance that arise in relation to interest income derived by a Top 500 group from deposits with financial institutions, or from investments in traditional securities (such as government and corporate bonds).

The table also provides examples of processes and procedures that could be developed by the Top 500 group to demonstrate that they have effective tax governance in place when managing those tax issues.

The list of tax issues is not exhaustive and the processes and procedures for each Top 500 Private Group may differ depending on the commercial circumstances around which investment in interest bearing investments are carried out.

Tax issues requiring assurance

Tax issue

Tax assurance considerations

Tax governance considerations

Record keeping – source documents

Good record keeping underpins our ability to assure that Top 500 groups are paying, and will continue to pay, the correct amount of tax. It is also a requirement under s262A.

The tax governance policy of the group should include procedures for:

  • maintaining a central repository for documentation that records details of:
    • accounts held by the group with financial institutions
    • investments in term deposits
    • the acquisition and disposal of traditional securities held by the group
  • maintaining a central repository for documentation that records:
    • interest received by the group from general account and term deposits with financial institutions or other entities
    • interest (coupon) income from traditional securities.

Completeness of interest income disclosures

Has all interest income derived by the group been captured?

The tax governance policy of the group should include procedures for:

  • correctly capturing and recording all the interest income derived by the group
  • reconciling interest income recorded in the group’s general ledger with deposits into the relevant bank accounts.

Interest income is reported in the correct period

Has interest income been reported in the correct income year?

The tax governance policy of the group should include procedures for:

  • recognising when interest income is to be recognised for both accounting and tax purposes
  • ensuring any timing differences between accounting and tax treatments is captured on the recipient entity’s tax reconciliation.

Characterisation and calculation of gains and losses on the disposal of traditional securities

Have gains and losses on the disposal of traditional securities been correctly characterised and reported on revenue account?

The tax governance policy of the group should include procedures for correctly calculating gains or losses on sale of traditional securities.

Correct reporting

Has the entity who derived the interest income or who made the gain or loss, reported correctly?

The tax governance policy of the group should include procedures for:

  • ensuring that interest income and any gain/loss on sale of traditional securities information is migrated across from the working papers and correctly disclosed in the relevant entity’s tax return
  • adjusting tax payable for any TFN withholding withheld by the entity paying the interest.

Governance framework example

To help in developing a documented tax governance framework, we have prepared an example of guidance that could be easily evolved into a checklist that may help Top 500 groups with simple affairs in ensuring they are correctly reporting interest income (under principle 2 of the 7 principles of effective tax governance).

Passive investors with simple affairs – checklist

Group head: Mr John Simple

Entity name: Mr John Simple

Checklist: Interest income and sale of traditional securities

Year end: 30 June 2022

Record keeping – interest income

Item

Activity

Responsibility

Purpose

1

Maintenance of a central repository for documentation concerning statements recording interest income.

Bill Bookkeeper

Good record keeping practices.

2

At the end of each month back up electronic copies of documentation in the central repository to a plug-in hard drive, or memory stick.

Bill Bookkeeper

Ensure records of Mr Simple’s are not lost in the event primary information sources are compromised.
Correct reporting of interest income

Item

Activity

Responsibility

Purpose

3

Financial institutions or other entities paying interest are notified of Mr Simple’s TFN and the bank account to pay interest.

Bill Bookkeeper

Remove TFN withholding risk. Ensure interest received into the correct bank account.

4

The timing and amount of the interest income should be recorded in the Excel spreadsheet entitled ‘interest income register’, within 3 days of interest being received. Accumulated totals should be maintained within the spreadsheet.

Bill Bookkeeper

Ensuring Mr Simple’s interest income disclosure is complete and referable to the correct year of income.

5

Reconcile cash interest payments deposited to investment bank account with interest income statements.

Bill Bookkeeper

Helping ensure Mr Simple’s interest income disclosure is complete.

6

Before forwarding information to tax Agent, review spreadsheet, bank accounts and term deposit confirmations, to sense-check interest income has been captured and correctly recorded as expected.

Bill Bookkeeper

Helping ensure that Mr Simple’s interest income disclosure is complete.

7

At least 4 weeks before the due date for lodgment of Mr Simple’s tax return, provide Mr Simple’s tax agent with:

  • Mr Simple’s interest income register spreadsheet for the income year
  • related source documents as required by the tax agent.

Bill Bookkeeper

Ensuring Mr Simple’s tax return is lodged on time.

Helping the tax agent with the process of preparing Mr Simple’s tax return.
Mutual responsibilities

Item

Activity

Responsibility

Purpose

8

Tax agent to provide an annual engagement letter to Mr Simple that specifies the tax agents and Mr Simple’s responsibilities under the engagement.

TAG & Mr Simple

To provide clarity around:

  • Mr Simple’s responsibility for providing complete and accurate information
  • tax agents responsibility for ensuring that all interest income is correctly recorded in Mr Simple’s income tax return.
Tax agent’s responsibilities – preliminary

Item

Activity

Responsibility

Purpose

9

Logic check interest income calculations in Mr Simple’s interest income register spreadsheet.

Tax agent

Integrity check over primary data source from which interest income information is obtained.

10

Retain and file working papers

Tax agent

Retention of records that support tax return disclosures.
Tax agent’s responsibilities – Income tax return preparation

Item

Activity

Responsibility

Purpose

11

Interest income received during the year is migrated across from the interest income register spreadsheet across to Mr Simple’s income tax return.

Tax agent

Correctly capture interest income in the return.
Posted on

Man charged with sexual abuse of children

Source: New South Wales Community and Justice

Man charged with sexual abuse of children

Thursday, 26 June 2025 – 12:46 pm.

Tasmania Police has charged a man from southern Tasmania with child sexual abuse offences, including five counts of rape, as part of an ongoing investigation.The man, aged in his 50s, was previously charged in December 2023 with multiple historical sexual offences against three children under the age of 12.Following further inquiries and interviews by the Southern Sex Crimes Investigation Unit, the man was recently arrested and faces charges of sexual abuse against two more children.The man was bailed with strict conditions and will reappear in the Hobart Magistrates Court in late September.If you suspect child abuse, report it on 131444 or if the child is in immediate danger, call 000.You can also report anonymously to Crime Stoppers Tasmania on 1800 333 000 or crimestopperstas.com.auThe Tasmanian Government’s Keeping Children Safe website is available at https://keepingchildresafe.tas.gov.au/Support for victim survivors, if required, is available through Arch https://arch.tas.gov.au/ or via https://keepingchildrensafe.tas.gov.au/get-support/

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Regional property markets continue momentum amid national growth

Source: Premier of Victoria

Author – Denton Pugh, NAB Executive for Home Lending. Originally published on News.com.au.

We might be deep into the winter months, but there’s definite signs of warmth returning to Australia’s property market.

Home values across the country have nudged higher again, rising 0.5% in May and lifting the national index 1.7% over the first five months of the year. And every capital city recorded growth. A sign that confidence in the market is continuing to grow.

NAB Executive for Home Lending Denton Pugh

We’re seeing this confidence play out in people like Emily Chalk, a 32-year-old first-home buyer who recently bought a home just outside of Rockhampton, in regional Queensland. She’d spent six months looking for a place to call home.

A conversation with her banker helped her understand how the Government’s Home Guarantee Scheme could help get her into her first home sooner than she thought. Within weeks she’d bought a home in the town she grew up in.

Stories like Emily’s are becoming increasingly more common.

It’s not just upgraders or investors sitting on equity returning to the market. Many first-home buyers have been waiting for banks to reduce home lending rates so they can not only borrow more but also have that confidence to take the leap into homeownership.

New NAB home lending data shows lending to first home buyers is up 16% since February, and up 32% to home buyers more broadly.

While interest rates are still relatively high, recent rate cuts are helping. With these cuts combined with initiatives like the Home Guarantee Scheme, we’re starting to see more people take that first step into homeownership.

Of course, we can’t ignore the bigger picture. While monthly growth is returning, the annual pace of property price increases has slowed. Not great news for investors but good news for those trying to break into the market.

We’re also seeing strong momentum in regional markets; a trend that’s been building since the pandemic years and is not going away.

In fact, Queensland regional hotspots dominated our list of the five hottest regional markets so far in 2025*. Toowoomba, Burnett, Springfield-Redbank, and the Sunshine Coast Hinterland all ranked high for home loan activity. Geelong in Victoria was the only non-Queensland regional hotspot to break into the top five.

  1. Toowoomba – QLD
  2. Burnett – QLD
  3. Springfield – Redbank – QLD
  4. Geelong – VIC
  5. Sunshine Coast Hinterland – QLD
  6. Mandurah – WA
  7. Loganlea – QLD
  8. Ballarat – VIC
  9. Maryborough – QLD
  10. Mackay – QLD

It may be the weather, or the lifestyle, but regional markets offer more than just charm and appealing work life balance. They offer affordability and the potential for long-term growth. For buyers like Emily, the appeal of staying close to family, and finding space for a young family was strong.

“I already know most of my neighbours, I definitely didn’t have that when I was living in Brisbane,” first-home buyer, Emily Chalk.

This continued momentum is promising, but it also highlights one of the biggest challenges still facing the market – we need more homes.

Lower rates are helping on the demand side, but affordability and supply remain big hurdles. Addressing those issues will take time, commitment, and smart policy. Particularly when it comes to getting new housing built in the places people want to live.

The winter months are usually quieter for the housing market, however, with most economists expecting further interest rate cuts this year, winter activity is expected to be a little higher than usual, continuing to build for the busier spring period.

More information:

  • *NAB proprietary home lending data between January – April 2025 vs the year prior.
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Call for information – Serious assault – Dundee Beach

Source: Northern Territory Police and Fire Services

Police are calling for information in relation to a serious assault that occurred at Dundee Beach around 11:00pm on Friday 20 June 2025.

It is alleged that there had been a minor motor vehicle crash involving a car and buggy on Lepanto Street, Dundee Beach. Following the crash the driver of the car is alleged to have been assaulted by a group of people, and sustained injuries to his face requiring him to be flown via CareFlight helicopter to Royal Darwin Hospital.

Police would like to speak with the occupants of the buggy and urge anyone with information about the incident to make contact on 131 444. Please quote reference NTP2500063173. Anonymous reports can be made through Crime Stoppers on 1800 333 000 or online via http://crimestoppersnt.com.au/.

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ACT Government delivers funding boost for community health organisations

Source: Northern Territory Police and Fire Services




ACT Government delivers funding boost for community health organisations – Chief Minister, Treasury and Economic Development Directorate

















As part of ACT Government’s ‘One Government, One Voice’ program, we are transitioning this website across to our . You can access everything you need through this website while it’s happening.

Released 20/06/2025

More than $2.4 million in targeted funding will support ACT community organisations to continue delivering critical health and wellbeing services across the Territory.

The one-off funding injection will assist ACT Health Directorate funded non-government organisations to address increasing costs and demand for services.

Minister for Health and Mental Health Rachel Stephen-Smith said the ACT Government is committed to backing the sector during a time of growing need.

“Canberra’s community organisations are essential partners in supporting people’s health and wellbeing, particularly those doing it tough,” Minister Stephen-Smith said.

“This additional funding recognises the increasing costs these organisations are facing, and ensures they can continue delivering the supports so many Canberrans rely on every day.

“We’ve worked closely with the sector to understand the pressures on the ground and provide funding that responds directly to those challenges.”

A wide range of services and supports will benefit from the funding, including chronic illness care, mental health, perinatal support, trauma counselling, and after-hours medical care.

Organisations receiving funding in 2025 include:

  • Capital Region Cancer Relief (ACT Eden Monaro Cancer Support)
  • Arthritis ACT
  • Asthma ACT
  • Diabetes Australia
  • Epilepsy ACT
  • Haemophilia Foundation
  • RSI Overuse Association
  • Community Services #1 and Capital Region Community Services consortium
  • Australian Breastfeeding Association
  • Kidsafe ACT
  • Women’s Health Matters
  • Canberra After-hours Locum Medical Service
  • Companion House
  • Directions Health Services
  • Winnunga Nimmityjah Aboriginal Health and Community Services
  • Clybucca Dreaming
  • Palliative Care ACT
  • Wellways
  • Marymead CatholicCare – Stepping Stones
  • ASHM

This latest funding builds on the ACT Government’s ongoing work to strengthen commissioning practices across the health and community sectors, ensuring services are aligned with community needs, sustainable over time and responsive to change.

“We remain committed to a partnership approach with community organisations and consumers, grounded in evidence, collaboration and a shared goal of better outcomes for Canberrans,” Minister Stephen-Smith said.

– Statement ends –

Rachel Stephen-Smith, MLA | Media Releases

«ACT Government Media Releases | «Minister Media Releases

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Move to improve: Exercise eases depression and anxiety in kids

Source:

26 June 2025

With more than three-quarters of children and teens experiencing depression or anxiety, parents are desperate for effective solutions. Now, new research from the University of South Australia shows that something as simple as regular exercise could be a powerful intervention to support young people’s mental health.

In the largest meta-meta-analysis of 375 clinical trials involving more than 38,000 young people, UniSA researchers found that when children took part in structured exercise programs, their symptoms of depression and anxiety improved. Specifically, the study found that:

  • Anxiety improved most through low-intensity, resistance exercises, such as light weights or gentle circuit activities.
  • Depression improved most through moderate-intensity, mixed-mode and resistance training, including circuits that combine aerobic and strength programs, particularly in programs lasting less than three months.

The biggest improvements in depression symptoms occurred in programs lasting fewer than 12 weeks, suggesting that benefits can emerge relatively quickly – especially for children aged 12 and over.

No significant differences were seen among the frequency of exercise sessions per week.

Children with depression and ADHD also showed the greatest improvements from exercise.

Lead researcher, UniSA’s Dr Ben Singh says the findings present parents with a non-invasive, low-cost solution to combat poor mental health in kids.

“Depression and anxiety are among the most prevalent mental health issues affecting children and teenagers worldwide,” Dr Ben Singh says.

“Evidence-based treatment guidelines often recommend cognitive behaviour therapy and antidepressants as first-line interventions, yet 40-60% of children don’t receive treatment or fail to gain sufficient benefits, so we clearly need alternatives.

“Exercise is a low-cost, widely accessible strategy that could make a real difference to children’s mental health. And while people know that exercise is generally good for your health and wellbeing, there is little evidence that shows how exercise works for kids nor the types of exercise that might work better than others.

“Our study draws together global evidence to show that gentle, light-intensity exercise is highly effective in reducing anxiety in children and teens, while medium-intensity programs that combine resistance and aerobic training – like circuits with weights – can counteract depression.

“Importantly, it demonstrates how exercise is an effective, accessible, lifestyle intervention that can immediately improve mental health issues in children, without first defaulting to medicines.”

Senior researcher, UniSA’s Prof Carol Maher says the findings reiterate the importance of exercise for mental health.

“Exercise should be a core part of mental health care for children and teens, whether at school, in the community, or clinical settings,” Prof Maher says.

“Short, structured programs that include strength training or a mix of activities seem especially promising, but simply exercising, even for short amounts of time will deliver benefits.

“And for parents, rest assured – you certainly don’t need to fork out money for a gym membership or training program; play-based activities, games, and sport are all valuable forms of movement that can support mental wellbeing.

“The key message is simple: get active and keep active. Even short bursts of movement can make a real difference to a child’s mental health and wellbeing – especially for those who are struggling”.

…………………………………………………………………………………………………………………………

Contact for interview:  Dr Ben Singh E: Ben.Singh@unisa.edu.au
Media contact: Annabel Mansfield M: +61 479 182 489 E: Annabel.Mansfield@unisa.edu.au

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Colac HQ seeks support volunteers

Source:

CFA’s District 6 Headquarters Brigade is calling for new volunteers to help with support roles in the area.

The HQ brigade is quite unique compared to other brigades as they undertake a range of roles to help our operational firefighters without the need to jump on the back of a fire truck.

In particular, the brigade is searching for new or existing CFA members to be part of the District Driving Unit and Logistics Unit.

District 6 HQ Brigade Secretary Tracy Wood said both of these roles are non-operational and undertake interesting activities to help support CFA during an emergency.

“The driving unit provides critical support to our members by driving vehicles and trailers to the fireground or incident, transporting crew members and helping facilitate vehicle changeovers and relocations,” Tracy said.

“Those interested would need a current driving license, experience in towing and reversing trailers and confidence to drive in all conditions including nighttime, gravel roads, rain and smoky environments.

“The logistics unit provides ground support at incidents, help setting up and packing up gear, assisting with the distribution of catering and restocking supplies.

“Again these members would need a current driving license, good communication skills, navigational skills and the ability to lift and move heavy objects is also desirable.

“Members don’t need to be available all the time. We’re trying to build a team with a mix of people who can help at different times including daytime and after hours.

“This role could be especially suitable for shift workers or newly retired people who are looking for a way to contribute to helping the community during an emergency, without the need to be a firefighter.

“Joining our brigade is also a great venture for meeting new people and building a greater sense of inclusion within the local area.

“All of our members have grown very close and we always welcome any new volunteers with open arms.”

The HQ brigade is based in Colac but would provide support for our brigades across the Colac Otway and Corangamite shire area.

Those interested in joining, or want to learn more, can contact Jessica Brittain on 0477 551 503 or visit www.cfa.vic.gov.au/volunteer to give us a hand. 

Submitted by CFA Media