Appointment of New Principal
It is with great pleasure that we announce the appointment of Phillip Baitch as a principal of our practice. Phillip rejoined the practice in 2014 for his second stint after residing in the UK for the previous 10 years. Phillip's areas of focus within the practice include property development and investors as well self managed superannuation funds. Phillip's appointment recognises his strong expertise, leadership and enthusiasm he brings to the practice and more importantly, to our clients.Please join us in congratulating Phillip on his appointment as principal.
Draft Legislation Released to Require Purchasers to Withhold GST on Purchase of New Residential Premises
The government has released exposure draft legislation to amend the GST law so that from 1 July 2018, purchasers will withhold the GST on the purchase price of new residential premises and new residential subdivisions, and remit the GST directly to the ATO as part of settlement. This measure was announced in the 2017-18 Budget to improve the integrity of GST on property transactions. This measure will address tax evasion through phoenixing arrangements, where developers collect GST from their customers but dissolve their company to avoid paying it to the ATO. Currently the GST is paid to the developer which is then remitted to the Tax Office via the Business Activity Statements.
The developer will be required to notify the purchaser in writing whether the purchaser will be required to withhold GST under the new regime. The notification will be required to be provided to the purchaser in respect of the sale of all residential premises irrespective of whether it is new or not.
If the purchaser is required to make a payment then the supplier must include the following matters in the notice to the purchaser:
- Name and ABN of the supplier/developer
- The amount of GST that the purchaser will be required to pay to the Commissioner
- When that amount is due to the Commissioner
- Where some or all of the consideration is not expressed as money – the GST-inclusive market value of the consideration not expressed as money (e.g. in kind consideration)
- Such other matters as specified in the regulations?
What Makes a Genuine Business? - Tax Office Rulings
A common question that arises during the course of each year is someone talking about the fact that they are carrying on a genuine business and do they have to pay tax on their earnings or can they claim tax deductions on a host of various items. This topic can get pretty finicky, but the usual starting point for discussions to determine if someone is carrying on a business is set out in "Tax Ruling 97/11 Am I Carrying on a Business of Primary Production".
Although the title talks about primary production, this ruling is the key ruling often used by the Australian Taxation Office and sets out the indicators that the courts have stated are relevant:
- Whether the taxpayer has more than "just an intention to engage in business".
- Whether the taxpayer has a "purpose of profit as well as a prospect of profit from the activity".
- Whether there is "repetition and regularity of the activity".
- Whether the activity is of the "same kind and carried on in a similar manner to that of the ordinary trade in that line of business".
- Whether the activity is "planned, organised and carried on in a businesslike manner such that it is directed at making a profit".
- "The size, scale and permanency of the activity".
- Whether the activity is "better described as a hobby, a form of recreation or a sporting activity".
These tests are pretty specific and outline simple tests which, if answered, give a good indication of whether someone is carrying out a genuine business or a hobby.
Give the Reason Why
"How can I sell more product?" Is the marketer's eternal question.
To open minds and wallets and have prospects eagerly buy, the most persuasive words in advertising are simply, "Reason Why". Whether you spread your message on TV, the internet or by letter, you must explain the "Reason Why" your product is much better.
Give good reasons for these three questions – why you? why true? why now? If you want to sell like a superstar, just boldly state your reasons: First, the reason yours is best. Second, a reason to believe and third, a reason to act right now. Give these and you will receive more sales than you can imagine, gold and riches on high.
The world showers you with treasure when you give the "reason why". Let me give you an example.
Soft drinks are one of the most difficult industries to break into with a new product. The number of times it's been done over history is very, very seldom because people are loyal to whatever soft drink they like. Not long ago, Slice soft drink. came out with a campaign that said it's a better tasting soft drink "because it contains 10% fruit juice". It gave a little reason in the headline – "10% fruit juice" – to explain why it tastes better than the average fruit soda. And that made all the difference in the world. In a product category that's renowned for a sky-high failure rate among new products, Slice quickly captured 7% of a $30 billion a year soft drink market. Today, that same soft drink market is probably worth more than $50 billion per year. That means that right out-of-the-box, Slice created $2 billion a year in sales on the strength of this one little proof element, "10% fruit juice". See how critical that line is to its success; try taking it away, what do you have? "Slice, a better tasting soft drink". Nothing there but a bland claim.
Take a hard look at your most critical marketing material, especially any that are underperforming. Ask if you are giving reasons why in each of these 3 areas:
1. Compelling reason(s) why your product is superior to other solutions your prospects might choose, including doing nothing.
2. Compelling reason(s) to believe that what you say is true.
3. Compelling reason(s) to seize the opportunity today.
When you examine the most successful examples of salesmanship in print, you'll almost always find these three reasons – "why", in full force, which is why they are so profitable.