A new year, and uncertainty for tax practitioners continues

February 18, 2019

Of the tax related announcements made in the 2018-19 Federal Budget on 8 May last year, there are no fewer than 11 that (in whole or part) are slated to commence on 1 July 2019 (that is – within 6 months from now) but which have not yet been legislated.  And when you take into account the real possibility of a new Government being elected before then (bringing with it promised changes to negative gearing and franking credit refunds), who knows when or even if we’ll see them enacted at all. 

Measures proposed to start on 1 July 2019 which have yet to be legislated include:

• Significant changes to Division 7A, including ensuring that unpaid present entitlements (UPEs) are caught

• The denial of deductions associated with vacant land not genuinely held to generate assessable income

• Limiting access to the concessional tax rates available for minors receiving income from testamentary trusts

• Extending anti-avoidance rules for circular trust distributions

• Ensuring that the small business CGT concessions are not available to gains made on Everett assignments (assigning a right to future income of a partnership)

• Preventing high-profile individuals from alienating income from exploitation of their fame or image

It’s true that for most of the above we have seen consultation papers or Exposure Draft legislation (with the exception of the proposed changes to taxation of income from testamentary trusts for which, as far as the writer is aware, we have not seen anything).   Nonetheless, a mountain of work remains for our drafters – particularly in relation to the proposed Division 7A changes for which we have seen only a consultation paper, not even draft legislation.  

And so the uncertainty for tax practitioners continues into 2019.