FRINGE BENEFITS TAX (FBT)

The FBT year ended on 31 March 2024 and each employer is required to calculate their liability for FBT. Where a liability for FBT exists an annual return is required to be lodged and any tax paid by 21 May 2024. However, if the return is lodged electronically by a Tax Agent the due date of lodgement and payment is 25 June 2024.

In addition, there may still be specific COVID-19 related concessions available, some of which are noted below.

Click here to download or view a PDF version of the following StewartBrown Newsletter - 2024 Land Tax edition. WELCOME Welcome to the Land Tax edition of our client newsletter for 2024 where we hope to keep you informed of the important Land Tax compliance issues affecting owners of land in Australia. You may recall that Land Tax is a State tax and different rules apply in each State. In this newsletter we have summarised the position in NSW. If in any doubt about your particular Land Tax circumstances, please contact your StewartBrown Manager or Partner. NSW LAND TAX REMINDER – ACTION REQUIRED BY 31 MARCH 2024 Land Tax 2024 – Registration Form All landowners in NSW, including Individuals, Companies, Superannuation Funds and Trusts are reminded that the due date for lodgement of the initial return for land held as at 31 December 2023 is 31 March 2024. If you have previously registered for Land Tax you do not need to complete a variation form unless your ownership or usage details have changed and you haven’t already received a correct 2024 assessment. If you own a property other than your principal residence and you have not previously registered with Revenue NSW, or if you need to lodge a variation form, please contact us as soon as possible. Penalties and interest may be levied for late registration and payment of land tax. Land Tax applies to: vacant land, including vacant rural land land where a house, residential unit or flat has been built a holiday home investment properties company title units residential, commercial or industrial units, including car spaces commercial properties, including factories, shops and warehouses Land leased from State or Local Government Land Tax is an annual, asset-based tax. It is irrelevant whether you are receiving income from the land or not. Land Tax rates 2024 The Land Tax rate for 2024 is 1.6% (plus $100) on the combined value of all taxable land in excess of the threshold. The 2024 Land Tax threshold is $1,075,000 for all taxpayers except discretionary trusts, some unit (fixed) trusts and certain groups of companies where the threshold is nil. Where the taxable value of land held in NSW is more than $6,571,000 (known as the “Premium Threshold”) the Land Tax payable is $88,036 for the first $6,571,000 in land value, then 2% over that amount. Revenue NSW obtains property values from the NSW Valuer General, who values land in NSW on 1 July each year. The unimproved value of a taxable property is the value used as the taxable value of the land for Land Tax valuation purposes. The taxable value of each parcel of land is determined on the average value from the current year and the two past years, where applicable. When a parcel of land has been created less than three years ago – for example, through a subdivision or amalgamation – only the years after it was created are taken into account. If you disagree with the valuation assessed to your land, you may object to the land valuation used in your Land Tax assessment, but that objection must be lodged in writing within 60 days of receiving your notice of assessment. Land Tax exemptions potentially apply to: principal place of residence (except if the property is rented or is used for business purposes) the former principal place of residence of some deceased persons (subject to limitations) land used for primary production boarding houses low cost accommodation residential parks (including caravan parks) non-profit organisations retirement villages, aged care establishments and nursing homes child care centres crown or council land Exemptions depend upon ownership and use of the land. Paying your Land Tax Once you receive your land tax assessment notice you have the option to pay the assessment using one of the following methods: Pay the full tax amount upfront or Pay by an interest free payment plan over 3, 6 or 9 months by fortnightly or monthly instalments. If you wish to use the payment plan option, please ensure you apply well before the due date for tax payable (stated on your assessment notice). Should you have any queries regarding your Land Tax Assessment Notice or need any assistance in applying for a payment plan, please do not hesitate to contact us. LAND TAX FOREIGN OWNER SURCHARGE If you are a foreign person who owns residential land in NSW, you must pay a Land Tax Foreign Owner Surcharge (“LTFOS”) of 4% of the value of the land. This is in addition to the 1.6% Land Tax amount. The LTFOS is only payable by foreign persons owning land in NSW. It applies to all properties owned by foreign persons including their principal place of residence. Importantly there is no tax-free threshold applicable to the LTFOS. A foreign person can be: an individual a corporation a trustee of a trust a beneficiary of a land tax fixed trust a government a government investor a partner in a limited partnership An individual, who is not an Australian citizen, is a foreign person if they are not ordinarily a resident in Australia. Australian citizens are not foreign persons, no matter where they reside. Due to international tax agreements entered into by the Federal Government, you will not have to pay LTFOS if you are a citizen of New Zealand, South Africa, Germany, Finland, Japan, Norway, India or Switzerland. If you are a foreign person and own land in NSW you must inform Revenue NSW. It may well be that you are liable for the LTFOS but not land tax (for example if your NSW land value falls below the threshold for land tax assessment purposes). Certain visa holders (Permanent, Partner (provisional) and Retirement) will be exempt from LTFOS on their principal place of residence if they use or intend to use and occupy their home for a continuous period of 200 days in a land tax year. These visa holders need to apply for the exemption from LTFOS by 31 March in the relevant tax year. Similar surcharges exist in other States although the rules can be quite different between States. Please consult with your StewartBrown Manager or Partner if you need further assistance with land tax or the land tax foreign owner surcharge. LANDHOLDER DUTY Landholder Duty is applied when someone acquires a ‘significant interest’ in a company or unit trust that owns real property in NSW with an unencumbered value of $2 million or more. The NSW Government has recently announced a raft of changes to the landholder duty regime set to take effect from 1 February, 2024. The cornerstone of these changes is the reduction of the threshold for the acquisition of a ‘significant interest’ in a private unit trust from 50% to 20%. This change means that taxpayers who hold 20% or more of the units in a private unit trust may need to pay duty on their acquisition of the units, potentially adding significant unexpected costs to the transaction. This will also mean that a large number of companies and unit trusts will become ‘landholders’ for NSW landholder duty purposes for the first time. For further advice or information concerning these proposed changes please contact your StewartBrown Manager or Partner.

Welcome to our December 2023 edition of the StewartBrown newsletter. Below are several important points to note as we close out the calendar year from a tax and business perspective. Click here to download a PDF copy of the December 2023 StewartBrown newsletter. STEWARTBROWN – CHRISTMAS CLOSURE We advise that the StewartBrown offices will be closed during the holiday period as follows: Office closes from 5.30pm Wednesday, 20 December 2023 Office reopens on Monday, 8 January 2024 The Partners and staff of StewartBrown take this opportunity to wish all our clients and business associates a very merry Christmas and a joyful New Year. FRINGE BENEFITS TAX AND CHRISTMAS PARTIES It is that time of year again and we thought a reminder on the tax consequences of Christmas celebrations and gifts would be timely. Income tax, FBT and GST are all relevant considerations where these costs are involved. Christmas parties The tax consequences will depend on a number of factors including the following: whether the employer is a tax-paying body, tax rebatable or tax exempt whether the party is held at your business premises or off-site the cost per person the fringe benefits tax method used by the employer (actual or 50/50 split method) whether or not the minor benefit rule applies where food and drink at the function is less than $300 per head (i.e. the benefit is an “exempt benefit”). (N.B. Where the minor benefit rule applies to entertainment expenditure, the employer will not be entitled to claim a tax deduction or to claim GST input tax credits in respect of the expense). who attends the party (clients, employees, associates of employees) To determine the tax consequences, employers need to identify all function-related costs. Christmas party held on the employer’s premises A Christmas party held on the employer’s business premises will be treated as follows for the various attendees: Employees: exempt from FBT and not deductible for income tax. GST input tax credits cannot be claimed. Associates of employees: subject to FBT and deductible for income tax. If FBT applies, GST input tax credits can be claimed. However, if the cost of the food and drink is less than $300 per person, the minor benefit exemption can apply. If the exemption applies, no tax deduction will be allowed and GST input tax credits cannot be claimed. Non-employees/non-associates: not subject to FBT, no tax deduction and GST input tax credits cannot be claimed. Christmas party held off-site A Christmas party held at restaurants or similar venues will be treated as follows for the various attendees: Employees and associates of employees: The expenditure will be subject to FBT and deductible for income tax. If FBT applies, GST input tax credits can be claimed. However, if the cost of the food and drink is less than $300 per person, the minor benefit exemption can apply. If the exemption applies, no tax deduction will be allowed and GST input tax credits cannot be claimed. Non-employees/non-associates: The expenditure will not be subject to FBT, there will be no entitlement to a tax deduction and GST input tax credits cannot be claimed. Christmas travel and accommodation provided in connection with Christmas parties The definition of “provision of meal entertainment” includes accommodation or travel in connection with providing entertainment. Travel and accommodation costs incurred in connection with the Christmas party must be included by the employer as part of their meal entertainment expenditure. Recreation provided at Christmas parties Recreation expenditure (eg live shows, theatre etc.) must be separated from the meal entertainment expenditure as it may have a different FBT treatment to the meal entertainment expenditure. You need to use the actual method to deal with recreation expenditure, as follows: Employees and associates of employees: The expenditure will be subject to FBT and deductible for income tax. If FBT applies, GST input tax credits can be claimed. However, if the cost of the recreation is less than $300 per person, the minor benefit exemption can apply. If the exemption applies, no tax deduction will be allowed and GST input tax credits cannot be claimed. Non-employees/non-associates: The expenditure will not be subject to FBT, there will be no entitlement to a tax deduction and GST input tax credits cannot be claimed. Christmas gifts Again, the tax treatment will depend on: the recipient of the gift if the gift is provided at the Christmas party whether the gift is in the nature of entertainment whether or not the minor benefit rule (less than $300) applies Gifts provided at the Christmas party to employees Where a Christmas gift is provided to an employee at the Christmas party, the benefits are associated benefits, but the ATO’s view is that each benefit needs to be considered separately to determine if the benefit is less than $300 in value. If both the Christmas party and the gift are each less than $300 in value and the other conditions of a minor benefit are met, they will both be exempt benefits. If the gift is in the nature of entertainment (e.g. theatre tickets), whilst the $300 minor benefit rule may apply to exempt the benefit from FBT, as the gift is in the nature of entertainment, the cost of the gift will not be tax deductible and GST input tax credits cannot be claimed. If the gift is not in the nature of entertainment (e.g. a bottle of perfume or alcohol), the cost of the gift will not be subject to FBT, it will be tax deductible and GST input tax credits can be claimed. Gifts provided to non-employees/non-associates Where a Christmas gift is provided to clients or suppliers, and the gift is not in the nature of entertainment (e.g. a bottle of alcohol or perfume), the cost of the gift will be tax deductible. The cost of gifts in the nature of entertainment (e.g. theatre tickets) provided to clients or suppliers will not be tax deductible and GST credits cannot be claimed.

For the information of clients we enclose this checklist which you may find helpful in planning your year-end tax strategies. Careful planning (and in many cases timing) is always important when tax planning is concerned. This document is not exhaustive and your individual circumstances must be considered. Please contact your StewartBrown Manager or Partner should you need any assistance with understanding or applying the below. Here’s a quick summary of what you need to consider for yourself and your business before the end of the financial year: Superannuation (in pension phase). Ensure minimum pension amounts have been withdrawn before 30 June. See 1 in pdf download below for further details. Superannuation Guarantee charge to increase from 10.5% to 11.0% on 1 July 2023. See 21(B) in pdf download below. Trustees of discretionary trusts. You are required to document your annual distribution decision before 30 June. See more details at 2 in pdf download below. Personal tax rates. See 4 in pdf download below for current personal tax rates. Company tax rate is 25% and remains at 25% in 2024. (Base rate entities only). See 3(A) in pdf download below. Improved and expanded asset write-off incentives still apply. However, this is the last year to utilise the Temporary Full Expensing write-off allowances and the Instant Asset Write-Off threshold reduces to $1,000 on 1 July 2023. See 3(B) in pdf download below. Single Touch Payroll (“STP”) is compulsory for all employers from 1 July 2022. Contact your StewartBrown Manager or Partner for assistance with this if necessary. Cryptocurrencies and Digital Assets. The ATO has access to extensive data from exchanges and service providers that can easily match transactions to clients. See more details at 6 in the pdf download below. Loss carry back measures. Companies can carry-back losses into prior years although these rules expire on 30 June 2023. See full details at 16 in pdf download below. Click here to download a PDF copy of the StewartBrown 2023 Year End Tax Planning Checklist which contains more details on the topics above

On Tuesday, 9 May 2023, Treasurer Jim Chalmers handed down the 2023-24 Federal Budget. As with all Budgets, these are announcements only and have not been legislated. The details are still to be worked through, and both Houses of Parliament need to pass legislation before the announcements take effect. 1. PERSONAL TAXATION MEASURES Medicare levy low-income thresholds Effective from 1 July 2022, the Medicare levy low-income thresholds will increase for singles, families, seniors and pensioners to take into account recent movements in the CPI. The new thresholds are listed below:

The Fringe Benefits Tax (“FBT”) year ended on 31 March 2023 and each employer is required to calculate their liability for FBT. Where a liability for FBT exists, an annual return is required to be lodged and any tax paid by 21 May 2023. However, if the return is lodged electronically by a Tax Agent the due date of lodgement and for payment is 25 June 2023. Where an employee reimburses their employer for the value of a taxable fringe benefit(s) provided to them (thereby reducing the FBT liability to nil) there is no requirement to lodge an annual FBT return. However, we strongly advise lodging a nil return in these instances as this starts the time period in which the ATO can challenge your FBT assessment. Where no FBT annual return is lodged, the ATO have no time limit and can raise an FBT assessment at any time. As with all tax lodgements, appropriate documentary evidence must be maintained. Where FBT reimbursements are paid by the employee to the employer they are subject to GST and 1/11th of these amounts must be disclosed on your business activity statement for the quarter in which the reimbursement is received. We will advise you of any such amounts, where applicable, when we prepare your FBT return. To assist you in understanding your FBT obligations we enclose the following: An update of the main changes during the year, which you may need to consider when determining your FBT liability. A summary of taxable benefits typically provided to employees, in order to assist you in determining whether you may be providing such benefits to your employees. A summary of the on-going income statement reporting obligations. We remind you that where motor vehicles are provided to employees or their associates for their private use, odometer readings must be recorded as at 31 March each year for each motor vehicle. We enclose a form which should be used to record this information. Also included is a form for your completion in respect of entertainment expenditure. We require this information in order to assist in the calculation of your FBT liability, if any. If you have any queries in respect of your potential FBT liability or would like StewartBrown to perform a FBT ‘health check’ on your business, please contact one of the StewartBrown Managers or Partners to discuss. Click here to download a PDF copy of the Stewartbrown 2023 FBT edition of our client newsletter.

Welcome to the Land Tax edition of our client newsletter for 2023 where we hope to keep you informed of the important Land Tax compliance issues affecting owners of land in Australia. You may recall that Land Tax is a State tax and different rules apply in each State. In this newsletter we have summarised the position in NSW. If in any doubt about your particular Land Tax circumstances, please contact your StewartBrown Manager or Partner.

On Tuesday, 25 October 2022, Treasurer Jim Chalmers handed down the 2022-23 October Federal Budget. As with all Budgets, these are announcements only and have not been legislated. The details are still to be worked through, and both Houses of Parliament need to pass legislation before the announcements take effect. There are no major tax, business or superannuation changes to be introduced as a result of this budget. The key personal, business-related and superannuation tax highlights are summarised below:

Welcome to our October 2022 edition of the StewartBrown newsletter. We hope to keep you informed of the important tax developments and issues affecting businesses in Australia today and throughout the year ahead. DIRECTOR ID's – NON COMPLIANCE In last months newsletter we reminded clients of the need to register with the Australian Business Registry Services (“ABRS”) for a director identification number (“Director ID”) and would now like to explain what happens if you fail to do so.

Welcome to our September 2022 edition of the StewartBrown newsletter. We hope to keep you informed of the important tax developments and issues affecting businesses in Australia today and throughout the year ahead. DIRECTOR ID – REMINDER As you may be aware, ASIC have made it compulsory for all Australian Company Directors to obtain an identification number (“Director ID” or “DIN”).

This special edition of our newsletter is to remind you of your employer obligations for the year ended 30 June 2022, as well as to provide an update on key changes from 1 July 2022 onwards. We also cover some employment related matters that should be reviewed routinely. Please contact your StewartBrown Manager or Partner should you need any assistance with any of the matters mentioned in the newsletter. Important 2022 Year End considerations covered in the newsletter include: Single Touch Payroll ("STP") Superannuation Obligations Taxable Payments Annual Reporting (TPAR) Payroll Tax

FRINGE BENEFITS TAX ("FBT") The FBT year ended on 31 March 2022 and each employer is required to calculate their liability for FBT. Where a liability for FBT exists, an annual return is required to be lodged and any tax paid by 21 May 2022. However, if the return is lodged electronically by a Tax Agent the due date of lodgement and payment is 25 June 2022. In addition, there may be specific COVID-19 related concessions available, some of which are noted below.