Our 2021 WA Tax Forum is just a few short weeks away – and the program is bursting at the seams with excellent insights for you and your tax team.
Highlighting the best of local Western Australian (and interstate) talent we’ll be covering a range of relevant and topical issues, in an unmissable opportunity to get up to date with our changing tax landscape.
We’ve delved into three of those hot topics, chatting with expert speakers of different sessions at the event to get the inside scoop on what you can expect.
Division 7A: the year for much-needed reform
The variety of topics that tax practitioners have to grapple with is never ending, ever changing and incredibly complex. A current hot topic at the forefront of tax practitioners’ minds is Division 7A.
It’s almost five years since it was announced that Division 7A was to be reformed. Tax practitioners have been anticipating it each year since, but it looks like 2021 will be the year it happens.
We caught up with David Montani, CTA, Nexia Australia’s National Tax Director and regular presenter on the ubiquitous topic, ahead of his Session 9A: Division 7A.
“I have been working with Division 7A since it was first announced in 1997. It was clear from the beginning that it would affect many clients, and it would be our responsibility as tax agents to work with clients to ensure deemed dividends were not inadvertently triggered,” said David.
Throughout their career, many SME clients are caught up in some Division 7A compliance in one form or another.
“Any practitioner servicing small-to-medium business clients must have a working knowledge of Division 7A. Complying with Division 7A should not be viewed as merely a recurring compliance function, rarely discussed with the client. It has real costs for clients, and there is often more than one way to deal with any particular situation,” said David.
We asked David what he is expecting from the upcoming changes and what the changes will mean for tax practitioners. So far, he says, there are no clear indicators of what changes will be implemented.
“Although Treasury’s October 2018 consultation paper says it sets out proposed changes to Division 7A, it’s not strictly speaking government policy,” he said.
“However, I do think that one likely change will be an overhaul of the loan model. For example, codifying loan repayment terms into the law, thus alleviating the need for executing loan agreements, would be a sensible change.
Practitioners must be clear on when any particular client needs to act, what they ought to do, by when, and the consequences if they don’t act. Then it’s a matter of communicating that to clients such that they understand their position and, one would think, will give the go-ahead for the practitioner to attend to what needs to be done.”
Tax challenges for investors in Australian property
Whilst tax practitioners await changes in Division 7A legislation, an area that has changed vastly over the past year is inbound tax issues for Australian properties. Chris Paull, a Tax Director at PwC’s Perth office, will be presenting on this topic at the Forum in Session 7A: Inbound tax issues for Australian properties.
“There's been a raft of change over the last year or so and there is quite a variation in the tax implications for foreigners, depending on the class of assets. This has led to a lot of politics at both a local state and national level around attracting investment and particularly the tax reflexes at the different types of property investments,” Chris told us.
“I think it's very, very relevant to draw out those distinctions and encourage that discussion.”
In his session, Chris plans to give an analysis of the tax implications for inbound investors in different classes of property investment in Australia.
“I'd like to hope they understand the policy intent across the different asset classes and, and in particular how the federal and state tax ratings interact in that regard, because policies is going to be a massive driver of this going forward,” said Chris.
And it’s not just technical knowledge attendees will pick up at the event. Chris said he’s also looking forward to connecting with colleagues again.
“Tax Institute events are really good technical forums. There’s a good networking element getting everyone off site and engaged for a day, sharing relevant content and drawing out relevant discussions.”
When tax and non-tax legislation collides
It’s not just tax legislation that practitioners need to be aware of when giving advice. Recent changes to legislation affecting small business insolvency and the interaction of Directors Duties and wealth protection, are just some of the issues that John Carrello, Principal at BRI Ferrier WA, will cover off in Session 11: Directors responsibilities, on Day 2 of the Forum.
“The conversations I continually have with people whose businesses have failed, is around the interaction of tax and non-tax legislation, and how it fits into tax effective planning, wealth protection and estate planning,” said John.
“An asset they thought was sacred becomes vulnerable due to a communication breakdown between them and their advisor.”
“Often where a director or an individual becomes bankrupt, we go to the trust to have a look and all of a sudden there's a loan account. This is due to the trust of that individual, meaning the bankrupt estate has got an asset it can recover. That should never, ever happen. Suddenly the risk-taker has become the wealth holder.”
John said that his session is about raising the issue of awareness – the goal is for attendees to walk away knowing something about the insolvency space they didn’t before.
“I hope to help delegates understand more about tax structures, tax plans and how important drawing up ‘what if’ scenarios and conducting stress tests are, when giving advice. I'll do that by way of referring the legislation back to real life events that I've been involved in.”
About the WA Tax Forum
Long considered the “must attend” forum for tax professionals in Western Australia, the 2021 WA Tax Forum features a line-up of local thought leaders and technical experts, combined with unique networking opportunities. Highlights include:
- Workshop, panel and technical sessions with an emphasis on “real-world” application
- A mixture of plenary and concurrent sessions relevant for SME and corporate tax professionals
- Opportunities to network and exchange ideas with peers and tax experts at our RAC Arena cocktail function, included in the price of your registration (additional tickets available)
When: 17 June 2021 – 18 June 2021
Where: Join us at RAC Arena, in the heart of the Perth CBD.