There is no “one size fits all” solution when it comes to estate planning because the dynamics and needs within families evolve and change over time.
Recently, we met with a client who was concerned about providing for their current partner and their children from a previous relationship. Our client wanted to make sure their children received a benefit whilst also protecting their current partner from any conflict or claim against them.Read more
Would you take legal advice from a “lawyer” offering his/her services through a Gumtree ad?
The situation seems laughable, but a recent case dealt with an uncertified lay-advocate who had offering advice and services on Gumtree under the guise he was a certified legal practitioner.
The Western Australian Supreme Court decision in Van Der Feltz v Legal Practice Board (2017) resulted in the arm-chair expert being slapped with a $20,000 fine!Read more
Christmas is traditionally a time of giving and this doesn’t exclude employers showing gratitude towards staff for a job well done throughout the year. However, gifts and Christmas Parties can attract the attention of the Taxman. With the Fringe Benefits Tax (FBT) rate now sitting at 49%, avoiding or minimising this impost is now more important than ever. This article looks at common Festive Season scenarios, how FBT applies, and how it may be minimised. Dinner at a Restaurant In certain circumstances, an employer can hold a Christmas party for staff and have it exempt from FBT. Take for example the quite common situation where an employer holds a Christmas party at a restaurant for employees and their partners and (besides from a Melbourne Cup lunch) it is the only social function they provide for employees during the year. Where this is the case, the total cost will generally be exempt from FBT provided the per-head cost (dinner and drinks) is kept to under $300 per person. This is known as the Minor Benefits Exemption. To enjoy this exemption the employer must use the Actual Method for valuing FBT meal entertainment. The Actual Method is the default method for valuing meal entertainment, and no formal ATO election is required to use this method. Under the Actual Method, an employer pays FBT (in the absence of an exemption) on all taxable meal entertainment provided to employees and their associates such as spouses (entertainment provided to other parties such as clients, contractors, or suppliers is exempt from FBT). If the meal entertainment meets the requirements of the Minor Benefits Exemption, the costs such as food and drink in respect of employees and their partners are exempt from FBT. Broadly speaking, under this Exemption the meal entertainment at a Christmas Party or other function will be exempt from FBT where its cost is less than $300 per head and, where similar or identical benefits are provided such as at Melbourne Cup lunches, they are only provided on an infrequent or irregular basis. The downside of using the Minor Benefit Exemption is that the meal entertainment is not tax deductible, and nor can you claim a GST credit. This Minor Benefit Exemption is not available if you elect to value your meal entertainment under the alternative 50/50 Method. Under this method, you pay FBT on only 50% of all taxable meal entertainment provided to employees, spouses AND clients, contractors, customers etc. irrespective of the cost. Likewise, you can only claim a 50% income tax deduction and 50% GST credits on such meal entertainment. However, with the FBT rate now at 49%, the 50% tax deduction and 50% GST credits available under the 50/50 Method is unlikely to provide a better after-tax result than the Actual Method where no FBT is payable. The “take-home message” is that, if like a number of employers, the only social functions you host for employees are the Melbourne Cup and Christmas party, be conscious of keeping the per-head cost under $300. By doing so, you may be able to exempt these functions from FBT. Gifts Provided gifts are only given […]Read more