A home is exempt from capital gains tax (CGT) if you are an Australian resident and the dwelling:

• has been the home of you, your partner and other dependants for the whole period you have owned it
• has not been used to produce income – that is, you have not run a business from it, rented it out or 'flipped' it (bought it to renovate and sell at a profit)
• is on land of 2 hectares or less.

If you meet these conditions, you do not pay tax on any capital gain when you sell your home and, you ignore any capital loss. The sale is a CGT event although the gain would be exempt, so you return a 0 gain and an X at item M in Question 18 of the tax return.

A credit card statement alone is usually not a sufficient record. If you claim a deduction, you must have records to show how you work out your claims. 

Records are usually a receipt from the supplier of the goods or services. A receipt must show the:

• name of the supplier
• amount of the expense
• nature of the goods or services
• date the expense was paid
• date of the document.

The ATO app is an easy and efficient way to document your records. You can also find more information about records you need to keep on the ATO website.

This would depend on your lodgement cycle and how long you like to give clients to prepare their records.

It is important to wait until late July to complete your return as most pre-fill information is available by then, and with substantial amount available by mid-August. More information on the timing of pre-filled information is available on the ATO website.

Crypto is not pre-filled in your tax return so it’s vital that detailed records are kept for all transactions. The ATO receives data from crypto asset exchanges which we then match against the information taxpayers declare in their returns.

Your client may not recognise, understand or agree with some of the information provided in the pre-fill report. If your client wishes for you to make an adjustment to pre-fill information, you may need to provide a reason. You can find out what steps to take in regards to missing information and discrepancies on the ATO website. 

Without knowing which particular disaster payment, we cannot give a definite answer. However, an Australian Government Disaster Recovery Payment (DRP) is treated as an exempt income, this means you don’t pay tax on this amount. If you have carried forward losses from an earlier income year, you will need to reduce that amount by any exempt income. More information about reporting of disaster payments is available on the ATO website.

The Centrelink payments that need to be included as income and won’t pre-fill are available on the ATO website. This page outlines new payments, particularly those that are taxable, including the Pandemic Leave Disaster payment from Services Australia. However, it’s important to note this doesn’t cover Service NSW payments. The 2021-22 updated tax time information will be available from 1 July 2022.

You can find all the information about the tax treatment of the different COVID-19 support payments for individuals and business in the ATO’s COVID-19 support: tax quick guide. 

Often the asset held on a crypto exchange is the right to receive crypto. In that case, the ‘transfer’ to a hardware wallet is the disposal of that right and the acquisition in exchange of actual crypto. The key to the acquired crypto is then stored in the person’s hardware wallet. There is a CGT event. The terms and conditions of the exchange should make it clear if your client has a right to receive crypto or the exchange is actually holding the client’s crypto asset for them.

More information about the tax treatment of crypto assets is available on the ATO’s website.

Crypto assets are treated the same as any other investment and are therefore subject to CGT. Like all transactions, crypto assets must be reported when sold, swapped or exchanged. 

People often also overlook transferring crypto assets to a platform. An exchange or a smart contract may be a disposal of that crypto depending on the rules of the platform or exchange or the code of a smart contract.

Crypto or the right to receive crypto can be disposed of without direct conversion to cash. How and when this occurs will depend on the terms and conditions applying to the particular credit card. 

Yes, most employers are now reporting through Single Touch Payroll. 

When you enter records in myDeductions, they're stored on your device. The ATO app doesn’t automatically backup or send your data and photos to us. Therefore, we highly recommend that you regularly backup your data to a separate location in case you lose or break your smart device.

Yes, you need to disclose any outstanding tax obligations (such as an ATO debt) in your annual declaration or registration renewal form to provide assurance to us that you are meeting your personal tax obligations. 

The term ‘personal affairs’:

• refers to a tax practitioner's personal tax obligations, including the accurate and timely lodgement of personal income tax returns, activity statements, instalment payments and employer obligations, such as payment of superannuation guarantee contributions and PAYG withholding
• includes a tax practitioner's practice, and
• includes the affairs of all associated entities of a tax practitioner and any entity that you have direct or indirect control over, particularly in circumstances where you are responsible for and/or actively involved in the tax affairs of the entity. This includes associated companies, trusts (including corporate trustees of the trusts), a self-managed superannuation fund you are a trustee of and/or partnerships.

For company or partnership tax practitioners (including a company as trustee of a trust), the tax obligations of the company or partnership mean the tax affairs of the company or partnership tax practitioner.

Yes, we would recommend using engagement letters for ‘one off’ income tax returns, but it does not need to be complex if you are dealing with simple tax affairs.

Even for simple dealings an engagement letter will ensure you and your client have clear expectations and that there is no misunderstanding of the services being provided. 

That’s right, engagement letters are not a specific requirement under the Code of Professional Conduct, even though we highly recommend you use them.

If you’re a member of a professional association, it’s important to know that some of them do require you to have engagement letters in place as a part of your membership with them. It would be recommended that you contact your professional association to confirm their requirements as well.

There are various ways you can safely and securely obtain client identification documents (or IDs) electronically. 

One thing we strongly recommend is not to use email for communicating sensitive information such as IDs of clients, except where you use an encrypted or password protected attachment to send and receive personal information. Email is not considered a secure form of transmission as there is a risk of emails being intercepted by third parties during transmission.

Other ways you can organise to obtain IDs electronically from your clients include secure websites, secure online mailboxes or secure messaging. We recommend you obtain professional advice from an ICT security provider as to what controls are appropriate for your business.

If you engage with clients remotely and use a webcam or videoconferencing to sight documents, make sure to record a note of the POI checks done. 

Learn more about POI.

Ultimately, determining whether a tax practitioner has complied with their obligations under Code items 9 and 10 will be a question of fact. This means each situation will need to be considered on a case-by-case basis having regard to the specific facts and circumstances. 

A good question to ask yourself is 'what would my peers and colleagues do in this situation?'. 

A trust should have its own tax file number (TFN). A trust is also entitled to an Australian business number (ABN) if the trust is carrying on an enterprise.

The trustee registers for the trust's TFN and ABN in their capacity as trustee. 

All trusts will automatically have 'The Trustee for...' added to the name of the trust when the ABN is registered, as the trustee is responsible for the tax obligations of the trust.

Yes, to avoid any confusion we would highly recommended that you do this.

Yes, a trustee can be one of the beneficiaries of a trust. For example, an individual could set up a trust, appoint themselves as trustee and distribute income to their business. 

However, a trustee cannot be the sole beneficiary of a trust. This is because they would be legally owning property for the benefit of themselves, which is problematic from a legal perspective.

Yes, Code item 3 states that a registered tax practitioner must account for money or other property received on trust from or on behalf of their clients. Examples of money received on trust may include, but are not limited to:

• subject to the terms of a retainer, money held or received in advance by the registered tax practitioner for the purpose of settling or meeting liabilities
• client tax refunds
• money paid to the registered tax practitioner for the purpose of seeking specialist advice.

This comes down to taking reasonable care. Code item 9 states that you must take reasonable care in ascertaining a client’s state of affairs. Code item 9 doesn’t require you to audit, examine or review books and records or other source documents to independently verify the accuracy of all information supplied by your clients. However, you cannot automatically discharge your responsibility by simply accepting what you have been told by your clients. 

Where a statement provided by a client seems credible and you have no basis to doubt the information supplied, you could accept the statement provided by the client without further checking. 

If the information does not seem credible, it is inconsistent with past claims, is from a new client or there has been a change in the law, you should consider undertaking a more thorough check to meet your reasonable care requirements. 

There are several issues here. First, how do tax practitioners support and educate clients about their tax law entitlements and obligations.

Second, if a client continues to press a claim which is unlawful explain the consequences, including audits, investigations, penalties and in the worst cases, prosecutions.

Third, if the client is still pushing tax fraud, you need to consider our own obligations. Acting legally and ethically and in the client’s best interests means you can’t follow these instructions. The downside for tax practitioners is obvious – your own standards, your reputation and good will in the marketplace, your registration and even penalties on prosecutions.

A further question arises under the whistleblower provisions. If you know the client is acting illegally (from a tax perspective), you may wish to 'blow the whistle' to the ATO, if you qualify for protection under the whistleblower laws. These disclosures can be made lawfully consistent with confidentiality requirements. 

We strongly encourage you to make a complaint if you are aware of a registered tax practitioner doing the wrong thing or know of someone providing tax agent or BAS services for a fee without being registered. 

It is important to provide us with as much detail as possible and to make sure you provide us with any relevant documentation to support your complaint. 

You can lodge a complaint using our online form.