Updates

This part of our website will operate like a blog from Bob Lamont and others at CPBMAC Business Solutions, T-CATS and CPBMAC Finance Solutions.

Our intentions are pretty simple:-

• Keep everybody up-to-date and well-informed with tax alerts, news stories, brief snippets of advice (not covered in FAQ’s), that sort of thing
• Publicise special offers which you will be able to access by sending us your request by email.

Blog - ATO ignores law, yet again!

Probably more to the point, the ATO is at it again in ignoring legislation and making “tax law” on the run, issuing a provocative Draft Ruling. The latest is a doosie and could hurt lots of people at both the big and small ends of town………..

In the late 1990’s the Government, armed with the Ralph Report, legislated to give the ATO powers to treat loans to shareholders and their associates AS TAXABLE INCOME under Division 7A of the Act. To avoid the tax gouge, shareholders were able to enter into certain loan repayment arrangements called 7A loans. Sooner rather than later, of course, the legislation was amended to trap unpaid present entitlements to Trustee companies and other associated companies in the hands of individuals who were beneficiaries of trusts. Notwithstanding those extended powers, the ATO issued a Draft Tax Ruling in January 2010 which patently ignored the letter of the law in extending its net – in essence the 7A loan no longer became the problem of the individual beneficiaries but the trust itself, the catch being that the trust is obliged to pass on the problem to its beneficiaries. In the meantime, the ATO attacked what are called Limited Partnerships which were by definition exempted from 7A treatment – quite without regard for the law, the ATO decided that they would coerce citizens into accepting penalties under 7A by applying a wildly inappropriate section of the Act to do with tax avoidance!

There is every likelihood that the aggressiveness and disdain for the word of law exercised by the ATO will eventually be referred to the High Court. The Federal Courts & High Court judges have severely criticised the ATO in recent years for its aggressive attitude. In the meantime, the courts have ruled that 7A can apply only when and to the extent the entity “caught” has a “distributable surplus” sufficient to pay the penalty.

As a client of CPBMAC Business Solutions you can be assured that we are aware of the importance of the “distributable surplus” in fighting off the determined tax gouging mindset of the ATO and we will do everything in our power to keep that surplus minimal, taking wind out of the ATO’s sails.

Bob Lamont, Director

There are 2 versions, one for the Trades & Construction industry, the other for all other types of business. If you’d like your free copy of Bob Lamont’s booklet & audio CD, please indicate which version is suitable… …….

EXPOSED. The Secrets to Becoming a $$$ Big Kahuna

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