ADVANCE REVENUE LAW

QUESTION 1

On 16 November 2012, Garry Wong received an amended income tax assessment notice dated 10 November 2012 for the  2011-2012 financial year disallowing a claim for overseas travel expenses of $16,000. He asks your advice as to what  he should do about disputing the amended assessment as he strongly believes that he has a valid claim and within what  time must he lodge his intention to dispute the amended assessment. What is the process?

QUESTION 2
Your client, William Brown is about to establish his own engineering consulting business in Canberra and he needs  advice as to how he should structure the business and minimise income tax and any other taxes. He is married and his  wife works part-time and he has two children, Greg aged 19 years and at university and a daughter Elizabeth, aged 16  years. He is concerned about being sued for negligence as he is unable to buy more than $45 million of insurance and  yet some of his projects are worth more than $100 million. He has been told by a friend of his that he should set up  the business as a trust and also have a service trust so that he can split some of the income with his wife and  children. He has no idea what this all means and he has been advised by his solicitor that he could be engaged in tax  avoidance with trusts being used. Advise William as to how trusts work and how they provide protection if sued for  negligence by a client.

QUESTION 3
Peter Gow is an investment adviser with BZK Limited, a large financial planning group in Sydney that have funds under  management of $260 million. He has advised the Board of Directors that they should sell the fund’s 1 million shares  in BHP which will result in a profit of $12 million to the company. The Board agrees and on 14 May 2012 the shares  are sold. Peter also notices that the 4 million Telstra shares have not performed as well as expected and that they  currently show a loss to the group of $16 million. The Board agree that the shares should be sold due to their lack  of performance and on 16 June 2012 the Telstra shares are sold. In November 2012, Peter notices that a number of  stockbrokers from the large banks are now recommending that Telstra shares are a buy’ and an excellent investment  due to solid growth projections in the future. Peter now recommends to the Board that 4 million Telstra shares be  bought. The Board agrees and on 19 September 2012 the shares were acquired. The auditors for BZK have just completed  the accounts for the company and have advised the Board that their actions in selling both the BHP and Telstra shares prior to 30 June may constitute tax avoidance under Part IVA. Provide Peter with advice as to BZK’s position.