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May 01, 2023


Letter Of Advice

To Bronte Carr

From: Smith Tax Partners

Dear Max

Summary Of Advice:

The current letter has the aim of providing you advice on issues that are necessarily important while preparing your tax return. The gross salary received by you is an assessable income under sec 6-5 ITAA 1997. The gross salary is a personal exertion income within sec 6 ITAA 1936. The tax withheld will be permitted to you as a tax offset.

We noticed that your employer has made superannuation contribution on your behalf. We also found that your employer has paid the telephone expense and course fees on your behalf. This will be considered as an expense payment fringe benefit under “section 23L of the ITAA 1997” and it is not included in your assessable income. The dividends that you have received is assessable to you under “section 44, ITAA 1936” while the franking credits is a permissible tax offset within “section 207-20 (11), ITAA 1997”.

We noticed that you have inherited shares portfolio when your grandfather passed away. With regard to sec 128-15 (4), you have inherited the post-CGT asset of deceased and as you are the beneficiary, we believe that you have acquired the asset on the day of demise of your grandfather based on the cost base of deceased. You also sold the CSL shares and made capital gains. The shares were not held by you for 12 months of income year and you fail to meet the 12-ownership rule. Therefore, the capital gains are not subjected to CGT discount and your gains will be assessable as statutory income within sec 102-5 of ITAA 1997.

In the later instance, the rental property that you have acquired has been let out by you to your brother. With regard to the guidelines of ATO the rental property has been rented out by you to your family member and you must charge rent with regard to commercial rate. The rental property expenses are permitted to be allowed as deduction up to the time when the property was let out to produce rental income.

We hope that the advice that we have given has been helpful in serving your interest and if you want any further discussion kindly feel free to reach us.

Yours Sincerely

Associate Taxation

Smith Tax Partners 

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