CLERP 9 passed

The Senate has passed CLERP 9 with only relatively minor changes in time for a 1 July start.

Changes include:

. a requirement for companies to include in their remuneration report data on their financial performance and shareholder returns over the previous 4 years.

. the chairman at a general meeting must allow shareholders a reasonable opportunity to ask the company auditor questions relevant to the conduct of the audit, about critical accounting policies and about the independence of the auditor.

Previously the Government had announced changes which included a due diligence defence to ASIC fines.

Read our summary.

 
Tax Office begins low doc loan audits

The Tax Office has begun auditing a number of people where income disclosed to lenders of low doc loans is substantially higher than that disclosed in their tax returns.

Tax Commissioner Michael Carmody said that in the cases under examination it is difficult to see how the loans could be serviced by the incomes disclosed in tax returns. In some cases the annual loan repayments themselves exceed reported taxable incomes. In other cases, people with substantial loans had failed to lodge tax returns.

"These are potentially serious breaches of the law. People deliberately understating their income face penalties of up to 75 per cent plus interest," Mr Carmody said.

Low doc loans do not require paperwork to prove income. The lending institution usually charges a higher rate of interest on these loans.

The Tax Office has been matching details from a selected range of low doc loans with the borrowers' tax files.

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Legal needs of homeless

The Senate Legal and Constitutional References Committee recently released a Report on Legal Aid and Access to Justice.

The Report considers the issue of homelessness and access to justice.

The report formally commends a small number of law firms around the country, (which includes Gilshenan & Luton), for their contribution to the staffing of legal clinics for the homeless.

About a dozen solicitors and graduates from Gilshenan & Luton voluntarily work on a regular roster with a couple of other Brisbane firms to staff the Homeless Person's Legal Clinic at City Hall on Tuesday nights.

 
Queensland Budget details

The Queensland Treasurer has released details of the State's 2004-05 Budget.

Amongst other things, from 1 August 2004, credit card duty will be abolished and the general insurance duty rate will be reduced from 8.5% to 7.5%. In addition, debits tax will be abolished from 1 July 2005.

 
Queensland Stamp Duty change

The Queensland Treasurer has announced the inclusion in the 2004-05 State Budget of an initiative to expand the duty concessions currently available to home buyers (for their principal place of residence).

From 1 August 2004, the ceiling for the concessional transfer duty rate of 1% for all home buyers will be increased from $250,000 to $300,000.

Under the concessions, home buyers will now be charged 1 per cent in transfer duty on the first $300,000 they spend, up from $250,000. A sliding scale will then apply with stamp duty of $3.50 charged for every $100 over $300,000 and $3.75 for every $100 over $500,000.

The changes will apply to contracts signed from 1 August.

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Superannuation Safety Amendment Act

The Act will commence on 1 July 2004.

Trustees of APRA-regulated superannuation funds will have to be licensed before they can act as an approved trustee. There will be a 2 year transition period.

 
Tax and corporate governance

In a recent speech to the Australian Institute of Company Directors, the Commissioner of Taxation spoke about tax and governance issues, aggressive tax planning and the recent Hart case.

 
Secure your passwords

This article from AP (via CNN) provides useful information on how to create and secure your on-line passwords.

 
New superannuation definition of "dependant"

The Assistant Treasurer has announced that the Government will expand the potential beneficiaries of tax-free superannuation death benefits to include "interdependent" relationships.

Tax-free superannuation death benefits can currently be paid a spouse (current or former), a bona fide de facto, a child under age 18 and someone who is financially dependent on the person.

The Assistant Treasurer said an interdependent relationship is one of continuing mutual commitment to financial and emotional support between 2 people who reside together. For example, 2 elderly sisters who reside together and are interdependent will be able to receive each other's superannuation benefits tax-free.

Senator Coonan said the definition will also include a person with a disability who may live in an institution but is nevertheless interdependent with the deceased. The same provision will be extended to embrace disabled children who are not residing with parents.

Similarly, an adult child who resides with and cares for an elderly parent will be eligible for tax-free superannuation benefits upon the death of the parent.

In addition, same-sex couples who reside together and are interdependent, but who may not be recognised under the current rules, will be eligible to receive superannuation benefits tax-free upon the death of their partner, Senator Coonan said.

However, the amendments to the definition of dependants will not alter the definition of a "spouse" to recognise same-sex relationships.

At the same time, the Attorney-General, Mr Philip Ruddock, announced that the Government will act "to protect the institution of marriage by legislating within the limits of its responsibility, to ensure that same-sex relationships cannot be equated with marriage". The Marriage Legislation Amendment Bill 2004 was introduced in the House of Representatives on 27 May 2004.

 
New meaning of "charity"

As foreshadowed in the Budget, the Extension of Charitable Purpose Bill 2004 has been introduced into the House of Representatives.

If passed, the Bill will extend the common law meaning of "charity" to include:

organisations providing child care to the public on a non-profit basis;
self-help bodies with open and non-discriminatory membership;
closed or contemplative religious orders that offer prayerful intervention to the public.

These groups would then be treated as charities for the purposes of all Commonwealth legislation.

 
Small business redundancy payments

The Workplace Relations Amendment (Protecting Small Business Employment) Bill 2004 has been introduced into the House of Representatives.

The Bill proposes to overrule the decision of the Australian Industrial Relations Commission in March 2004 which removed the exemption of small businesses (less than 15 employees) from the usual redundancy pay obligations.

If passed, the Bill will limit the allowability of redundancy pay to employers of 15 or more employers. It will not remove the obligation if it existed under a State Award before 26 March 2004 or if the employer has the obligation under a State Award and is not a corporation.