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GUEST OBSERVATION
In general terms, the tax law contains provisions that allow taxpayers to, in effect, get out of paying their tax bill if they can prove that paying their tax would result in “serious hardship”.
Obtaining a release from tax liabilities involves a two-step process:
<ol>
<li>A determination that the applicant would suffer a serious hardship if he or she was required to satisfy the tax liability; and</li>
<li>Whether in the circumstances, discretion should be exercised to grant the release sought. A taxpayer can request that the Tax Commissioner release him or her from their tax liabilities.</li>
</ol>
The process sounds relatively straightforward, but there is no definition of "serious hardship" in the tax law. Each case must be considered on its facts.
However, the Tax Commissioner has issued guidelines in what is known as the ATO Receivables Policy to provide ATO staff with guidance in dealing with applications for release from tax liabilities. In part, that policy states:
"The term ‘serious hardship’ is not defined at law and must be given its ordinary meaning. The Commissioner determines whether serious hardship exists by applying several tests which are designed to ascertain whether payment of the tax would produce unduly burdensome consequences for the person such that they would be deprived of necessities according to normal community standards.
"Thus, serious hardship would be seen to exist where payment of a tax liability would result in the person being left without the means to achieve reasonable acquisitions of food, clothing, medical supplies, accommodation, education for children and other basic requirements. On the other hand, elements of hardship may be regarded as marginal or minor – rather than serious – if the consequences of payment of tax are seen, for example, as limitation of social activities or entertainment, or loss of access to goods or services of a more luxurious nature or standard."
Okay, so getting a release from your tax debts is possible, but how often does it happen?
The burden of proof
The onus is generally on the taxpayer to prove that serious hardship will result if they have to pay their tax bill. That's often easier said than done, and taxpayers should not underestimate exactly what they have to prove.
Two recent decisions before the Administrative Appeals Tribunal (AAT) saw taxpayers lose their claims for relief from paying their tax liabilities. They illustrate just what it takes to prove serious hardship.
In the first case, the taxpayer’s tax debt was just over $80,000. He argued that his income tax debts arose as a result of his unauthorised early access of his superannuation benefits in order to support his gambling addiction. The AAT said that during the income year ended 30 June 2011, he illegally accessed his superannuation benefits by withdrawing just over $180,000 from his super fund. The taxpayer sought release from his tax liability either in whole or in part on the basis that he would suffer serious hardship if he was required to pay the outstanding balance.
He said his total asset value was about $580,000 with total liabilities of $666,200 which did not include his tax liability.
Although acknowledging the taxpayer's intentions to control his gambling addiction, the tribunal was not satisfied the taxpayer's situation, if required to pay the tax debts, would be of serious hardship. Even if it were a case of serious hardship, the tribunal said it would not exercise the discretion to grant relief.
The tribunal noted the taxpayer was earning a high income in the mining industry and that his household expenses included discretionary spending that could be reduced, for instance, entertainment of $250 per fortnight, other expenses of $264 per fortnight and vehicle expenses including repairs and loan repayments of $926 per fortnight. It said the sale of the taxpayer's car or investment property would also significantly reduce his tax liability. Furthermore, it noted the taxpayer had preferred the repayment of other debts to his tax debt. Accordingly, the taxpayer's application was dismissed.
In the second case, a taxpayer was also unsuccessful before the AAT in seeking to be released from his tax liabilities.
As of 4 May, 2014, the taxpayer's outstanding tax debts amounted to around $58,000. However, the tribunal was not satisfied the taxpayer's situation, if required to pay the tax debts, would be of serious hardship.
The tribunal said no explanation was offered for the failure by the taxpayer to meet his tax liabilities as they arose. When comparing household income to expenses, although noting the outlays were not extravagant, the tribunal was of the view there was a level of discretionary spending (eg entertainment) which, if necessary, could be reduced.
The tribunal said instead of paying what it considered to be manageable tax assessments, the taxpayer “largely ignored his tax liabilities over the last five or six years”, and had allowed the amounts due to accumulate with interest. It added that the taxpayer “simply failed to give proper priority to paying his tax” and that since entering the PAYG instalment system in 2008, he had paid only four of 22 tax assessments. The tribunal said the taxpayer had made no sustained effort to clear arrears and achieve compliance.
The tribunal considered that the taxpayer had overstated his expenses. It said the taxpayer's situation had been brought about by his own failure to meet his tax obligations. It was not, in the tribunal's view, a situation that had been forced upon him. He had simply failed to give proper priority to paying his tax.
While the law does allow people the opportunity to be released from their tax liabilities, the above cases prove how difficult that can be.
“Serious hardship” is determined on the facts of each case, and court and tribunal cases have built up a series of authorities on how it is to be determined. When taken with the ATO’s policy in this area, taxpayers need to understand fully just what it will take to be released from their tax liabilities.
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/" target="_blank">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
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Getting a release from your tax debts – possible, but not so simple

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In general terms, in order to claim input tax credits (ITCs) under the GST system, an enterprise must be carried on. This can be a tricky issue when property developments are concerned, as two taxpayers recently found out to their detriment before the Administrative Appeals Tribunal (AAT).
A business needs to be carried on before claims for ITCs can be made and this is where the taxpayers ran into trouble before the AAT.
In that case, the two taxpayers failed before the AAT in a matter concerning a number of ITC claims in respect of purported acquisitions made in relation to two property developments.
The first taxpayer (a company that was the trustee of a trust) and the second taxpayer (a partnership of two individuals) claimed to have made acquisitions in relation to a 4900 acre property development near Goulburn in NSW. The first taxpayer also claimed to have made acquisitions in relation to another property development in Grenfell NSW.
Both taxpayers were registered for GST. However, the Tax Commissioner issued to both taxpayers amended assessments denying ITCs claimed on those purported acquisitions – in the first taxpayer's case, for the tax periods April 2010 to June 2011, and in the second taxpayer's case, for the tax periods April 2009 to December 2010.
The Commissioner's position was that neither taxpayer carried on an enterprise at all, so that neither of them could be entitled to any ITCs. The Commissioner also imposed a 50% administrative penalty.
The tribunal dealt mainly with the arrangements of the first property development as it was of the view the arrangements did not differ materially from the second development. The tribunal noted there had been some work done on the property; however, the parties disputed what that work consisted of, how much of it was done, who it was done for, and whether it had been paid for.
The taxpayers said they were "principal contractors to the project". The project was presumed by the tribunal to be the development of the property for eventual subdivision. However, the tribunal noted that exactly what the "principal contractors" did in respect of the property remained the subject of "quite profound mystery". It also said the same observation applied in respect of what the "principal contractors" were supposed to have acquired from various entities, described by the taxpayers as the "subcontractors", who were said to have undertaken some of development activities.
The tribunal understood the case put by the taxpayers as follows: the owner of the property engaged the principal contractors to get certain work done on the property; the principal contractors in turn engaged subcontractors to do the physical work; the subcontractors did the work and charged the work to the principal contractors; and the principal contractors bundled up the charges with a 20% mark-up and on-charged the owner of the property.
The total amount invoiced to the first taxpayer by the subcontractors (in relation to both property developments) was over $250,000. The total amount invoiced to the second taxpayer was over $820,000. However, the tribunal said the invoices themselves were "short on detail". The tribunal also noted that the Commissioner had notified the taxpayers his doubts concerning the work undertaken on the property after he was informed by the relevant council authority that approval to subdivide the property had been refused.
The tribunal said each taxpayer's claim for ITCs failed "at the most basic level". It said that an entity is not a "project manager" simply because someone says it is, and it was important that, to carry on an enterprise (thus enabling the ITC claim to potentially succeed), "an entity must do something".
The tribunal was unable to identify the "activity" that the taxpayers were undertaking in respect of the properties. It was also not satisfied that either of the taxpayers, in relation to the relevant property developments, carried on any activities "in the form of a business". A key issue identified was the difficulty the taxpayers had in articulating the arrangement between themselves, landowners and subcontractors. The AAT said it could not see that either taxpayer did much at all, beyond receiving invoices from the subcontractors and it rejected any notion that receiving invoices is relevantly an “activity”.
The tribunal member (Deputy President Frost) said the taxpayers "could not take me to any document that set out an agreement, between either of the landowners and either of the applicants, that the applicants would perform services or tasks, engage or co-ordinate third parties, or even make arrangements of any kind in relation to the development of the properties".
That, to say the least, was not helpful to the taxpayers' cause.
The tribunal was of the view the "true arrangement" was work was done for, and the supplies were made to, the owners of the properties, and that at most, the taxpayers agreed to pay for some of the supplies. The tribunal found, on the balance of probabilities, that there were "supplies" by the subcontractors; however, it was of the view that any supplies were not made by the subcontractors to the taxpayers. It said it could not see any indicators of a business being carried on. Accordingly, it held the claims for ITCs were not sustainable.
Although not required to, the tribunal also rejected the taxpayers' argument that "promissory notes" issued by them to the subcontractors for work done constituted consideration at the time of the supplies. The tribunal also affirmed the penalty at 50% of the shortfall amount.
The tribunal said the arrangement involved multiple entities, many of them not at arm's length, and that given the type of arrangement involved and its size, independent advice should have been obtained.
This case is a clear demonstration of the need to properly and fully document the operations of a business. The need to obtain clear and independent advice on any business proposition, be it property development or something else, is also a "take-away" message from this case.
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/" target="_blank">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
Photo courtesy of Chris Tolworthy/Flickr/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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The tricky business of property development and GST credits

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GUEST OBSERVATION
Under the capital gains tax laws, taxpayers can be entitled to small business capital gains tax concessions which can, depending on the circumstances, either reduce or eliminate any capital gain made. <a href="https://www.smartcompany.com.au/finance/tax/34073-capital-gains-tax-get-your-house-in-order" target="_blank" style="line-height: 1.3em;">The concessions</a> are very beneficial to small businesses, but are unfortunately complex (much more so than they should be).
One of the tests in the law that a taxpayer needs to meet is what is called the maximum net asset value test. This test is whether in the year in question, the concession can be claimed if the value of its net assets did not exceed $5 million. It sounds straightforward, but it isn’t. Under the test, the net value of CGT assets of entities “connected with” the taxpayer is required to be taken into account for purposes of maximum net asset value test. It is the meaning of “connected with” that recently brought a taxpayer undone before the Federal Court.
The taxpayer was a company that made a capital gain of just over $1 million in selling its 50% interest in a car wash business in the 2007-08 income year. It did not return the gain as assessable income but instead claimed that it was entitled to apply the CGT small business concessions. The company claimed that in calculating its taxable amount, it was entitled to rely on a statutory concession in the tax law on the basis that the value of its CGT assets did not exceed $5 million.
However, the Tax Commissioner issued an amended assessment to include the gain on the basis that the taxpayer failed the (then) $5 million MNAV test. At first instance, the Administrative Appeals Tribunal had to decide whether sole director and controller of the company (Mr Roberts), could exclude from the MNAV his interest in a Queensland property, which had been rented for much of the previous seven years, but which at the time of the sale of the carwash had been taken off the rental market and had intended to be once again used as his and his wife's holiday home.
Also at issue was whether the wife's CGT assets, including her interest in the Queensland property, were to be taken into account on the basis of her being either a connected entity and/or a "CGT small business affiliate" of the taxpayer company.
In its decision, the AAT dismissed the argument that the 50% interest of the husband in the Queensland property should be disregarded. However, it held that the wife's CGT assets, including her 50% interest in the holiday home, were not to be counted in applying the MNAV test because she was not connected with the taxpayer company as she did not own any shares in it. It then found that although she was a "CGT small business affiliate" of the controller of the taxpayer company (her husband) by virtue of being his wife, she was not a CGT small business affiliate of the taxpayer company as required by the relevant law in order for her CGT assets to be included. The Tax Commissioner appealed.
The Commissioner argued that in applying the relevant provision, the tribunal ought to have included, but did not include, the value of the assets of Mrs Roberts in the calculation of the value of the company’s assets before the sale of the car wash.
The Commissioner contended that the tribunal erroneously limited its enquiry into whether Mrs Roberts herself beneficially owned shares in the company that carried the right to control the exercise of at least 40% of the voting power, whereas the tribunal ought to have considered whether Mrs Roberts’ small business CGT affiliate (her husband) owned shares in the company that carried between them the right to control the exercise of at least 40% of the voting power.
The Federal Court said the covering words in the relevant provisions of the tax law contemplated three bases upon which to determine the relevant connection between the company and another entity (in this case the wife). The court said the tribunal concluded that the relevant provision did not apply because the wife was not connected with the company although her husband was.
The tribunal did not, however, consider (but should have) whether the wife was deemed to be connected with the company by the same law which required that her connection be determined also by reference to her small business CGT affiliate (in this case, her husband) or together with her small business CGT affiliate (in this case, together with her husband).
The case highlights the inherent complexities in what should really be a relatively straightforward tax concession.
The small business CGT concessions are valuable to any SME and can result in significant tax savings. However, any SME contemplating claiming the concessions would be very well advised to seek professional advice. This is one piece of tax law that is crying out for simplification.
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/" target="_blank">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Beneficial but tricky capital gains tax concessions explained

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GUEST OBSERVATION
Despite what you may think, that is not a rhetorical question.
The <a href="https://www.smartcompany.com.au/finance/tax/41486-ato-data-matching-targets-online-selling">Australian Tax Office</a> is a large federal government agency that comprises about 15% of the Australian Public Service, and has around 24,000 people in more than 60 locations around Australia. It’s a large organisation by any measure. Reinventing any entity that large is no mean feat – and it won't happen quickly.
Some may question why a country of 23 million people needs a tax agency that large. Well, our tax system is complex (way too much so), and the ATO has many taxes to administer. However, while the size itself of the ATO is one thing, how it operates is a whole other issue.
Tax Commissioner Chris Jordan is looking at how the ATO can reinvent itself to make it simpler and easier for people to comply with their tax obligations and to make the ATO a more responsive and “user-friendly” agency. These are not platitudes from the Commissioner; he means it.
In a recent speech, the Commissioner said that with the Coalition government's "open for business" mantra, the push for productivity increases and de-regulation, the ATO must be able to show improvements in efficiency and reductions in red tape. Jordan said he has promised government he will do everything he can "to improve the tax and super experience in Australia – making it simpler and easier to comply". He said he has also promised to change the culture of the ATO and is required to report back to the Assistant Treasurer regularly on that front.
The Commissioner said that building trust in tax administrations was critical to the success of tax systems.
Jordan said that when he was asked to take on the role, he was aware of feedback that despite best intentions, the ATO had become isolated from some of its key stakeholders and segments of the community. Jordan said he knew that trust and confidence needed to be lifted and he was asked to work on relationships with government, other agencies, and, SMEs will be glad to hear, the business community.
The Commissioner said his "fundamental belief is that in order to deliver to government, the ATO must use its power legitimately, build trust in its judgment and demonstrate fairness and integrity". He said the ATO has to design and operate a system for the majority of taxpayers who do the right thing,rather than for the few who don't [Commissioner's emphasis]. Jordan said the ATO was asking itself "how do we design the system so that it suits the 95%, rather than a system designed for 5%?"
The Commissioner said the ATO’s answer to this complex situation is to reinvent itself, transform how it goes about its core business, and make it a contemporary and service-oriented organisation. He acknowledged that reinventing the ATO is a long-term journey — recognising that building trust in a tax administration is not a simple or quick effort.
Jordan said the ATO has to build on the positives of its culture like commitment to its role, to service and taxpayers, integrity and ethics, but, in a frank assessment, he said the ATO also has to “acknowledge the negative aspects of our culture like risk aversion, righteousness, silo mentality and bureaucracy”. SMEs and their advisers would certainly agree.
Jordan said the ATO's approach to accountability needs to change – "to be simpler, clearer and connected to reward and consequence". He said the ATO's measures "have to include views from others and be related to effectiveness and outcomes…We must put a much greater emphasis on how others judge our performance."
Integrity is about character, Jordan said. In terms of the ATO and the tax system, he said  it is about doing the right things consistently by all of the ATO’s stakeholders (e.g. government, business, taxpayers generally) — “safeguarding and future-proofing the system on behalf of the Australian community and dealing with taxpayers in a way that is fair and right in the long run”.
The Commissioner said these thoughts have helped shape the ATO’s strategic directions.
Recognising that time is money for all businesses, Jordan said the ATO is focusing on early discussions between the taxpayer and relevant tax officers responsible for making decisions. These early, face-to-face talks, he said, aim to get to the core issues more quickly and short-circuit unproductive paper wars between the parties. SMEs will no doubt be delighted if the paper war can be won!
The ATO is also seeking to bring to a sensible close unnecessarily long running cases and audits — “recognising when we reach the point of diminishing returns or an impasse”, the Commissioner explained. Of course, if agreement or settlement cannot be reached, the courts will need to decide. In a refreshing stance, the Commissioner said that continuing dialogue for five years or more is not productive, prevents closure and damages trust.
The ATO is at the centre of the tax world in Australia. It deals with millions of taxpayers and their tax issues every day. Overshadowing all of that is the tax law. The Commissioner said it is important to him that the ATO is able to influence law design. He said the ATO has the advantage of seeing what works and doesn’t in practice and can use those insights to advise Treasury. The ATO’s new Integrated Tax Design Unit seeks to ensure requests to Treasury are prioritised and presented from a whole-of-system perspective. Jordan said there is limited capacity to change law and the ATO is looking at other ways to resolve issues.
Seeking the community’s perspective through consultation – knowing what problems exist and their ideas for possible solutions is, in the Commissioner’s view, vital in order for the ATO to provide the right advice to Treasury.
SMEs and businesses generally have avenues to make their views known, for example as I explained in my recent article about the Inspector-General of Taxation’s new work program. And the ATO itself is asking small business owners to join its new small business consultation panel to help boost the ATO’s small business expertise. In addition, the government has asked the Board of Taxation to identify features of the tax system that are hindering SMEs.
There is a lot happening at the ATO and in the tax system. The Commissioner says he is “going to do what I can to make improvements to the tax and super experience by reinventing the ATO”.
“I want the ATO to be trusted and respected…where people choose to comply and we make it as painless as we can. In the end, I want confidence in the ATO and the tax system so that there is conscious willing participation, hopefully higher than the current 95%.”
Can the ATO reinvent itself? The sceptics may have doubts, but the Commissioner is clearly serious and appears intent on giving it “a red hot go”. He has already got some runs on the board, so watch this space.
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/" target="_blank">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany.</a>
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Can the ATO reinvent itself? The push for a more “user-friendly” tax agency

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GUEST OBSERVATION
Tax refunds are often thought of as a sacrosanct part of our tax system. They're not. There is no guarantee that anyone will <a href="https://www.smartcompany.com.au/finance/tax/24536-is-the-ato-s-ability-to-retain-tax-refunds-too-great" target="_blank">get a tax refund</a>. It depends entirely on one's particular circumstances, and how the numbers fall when a person's tax return is compiled.
However, when refunds are due, taxpayers are always keen to receive them and any delays are not welcomed.
So why are some tax refunds delayed?
The Australian Tax Office says within the tax system, there is an endemic risk of taxpayers and tax return preparers lodging incorrect or fraudulent returns. Left untreated, the ATO considers that such risks may result in reduced community confidence, an erosion of voluntary compliance and significant revenue leakage.
Therefore, the ATO runs what it calls an "income tax refund integrity program" whereby it uses a series of analytical models designed to detect instances of overclaimed tax deductions, offsets or other credits in income tax returns. The ATO stops these returns for manual review before any refunds are issued to the taxpayer. The ATO takes the view that certain risks should be addressed prior to issuing the notice of assessment and before any refunds are paid to the taxpayer. The aim is to protect the integrity of the tax system. Fair enough.
However, there have in recent years been complaints about the length of time tax refunds have been delayed. The Inspector-General of Taxation, Ali Noroozi, has <a href="https://www.smartcompany.com.au/finance/tax/29185-inspector-general-of-taxation-investigates-ato-refund-delays" target="_blank" style="text-decoration: none; color: #000000; font-weight: bold;">conducted a review into this ATO refund review program</a> and his report has just been released. At 108 pages, it's a lot of reading.
The review arose out of taxpayer and tax agent concerns regarding extended ATO delays in processing income tax returns held for review under the ATO program. Significant complaints were raised with the Commonwealth Ombudsman, the ATO’s Complaints section and the IGT in 2011-12 when higher than expected numbers of tax returns were held leading to extended delays in the processing of those returns. Some 109,000 returns were held when only 33,000 had been expected.
As a result, Noroozi said a significant number of taxpayers experienced extended delays, sometimes of many months following lodgment. These extended delays were exacerbated by the inability of taxpayers or tax agents to find out why these delays occurred or to have their returns expedited. Moreover, the Inspector-General said it was contended that the ATO’s communication led to the perception that the ATO considered these taxpayers to be dishonest or fraudulent.
Following the experience in 2011-12, the ATO embarked on a significant program of work to refine the models and processes it used to stop fewer tax returns and reduce timeframes. The Inspector-General said this review confirmed that the ATO has improved its communications to affected taxpayers by providing greater clarity of timeframes for release of their refunds.
Noroozi said the ATO has placed less emphasis on potential fraud as a reason for returns being held to allay taxpayer concerns and anxiety. In relation to concerns that the ATO review program only stopped and adjusted tax returns with small refund amounts, the IGT found that statistics over a 3-year period indicated that of the stopped returns, 5.29% cent in 2010–11, 1.85% in 2011–12 and 2.87% in 2012–13 contained refunds of $1,000 or less.
The Inspector-General said submissions to his review acknowledged the improved experience with the ATO review program in the 2012–13 financial year. However, they raised concerns regarding delays that have persisted, the inadequacy of the ATO’s communication and the inability of taxpayers and their agents to intervene early and request their returns be expedited.
The Inspector-General has identified a number of areas for improvement and has made a total of 13 recommendations aimed at:
<ul>
<li>
continuously improving the time taken to review cases held under the ATO review program by increasing staff levels at appropriate times and exploring strategies to make use of third party data to verify taxpayer claims;
</li>
<li>
adopting a differentiated approach to prioritising and expediting the processing of tax returns in appropriate cases;
</li>
<li>
improving the giving of specific reasons for tax returns held up and reasons for any adjustments made as a result of the program;
</li>
<li>
adopting behavioural economic concepts and utilising randomised controlled trials to test the effectiveness of correspondence used in the ATO program;
</li>
<li>
raising awareness of cost-effective and efficient dispute resolution strategies to address challenges to refund delay decisions and monitoring the use of default assessments to limit instances of such assessments issuing to compliant taxpayers;
</li>
<li>
maintaining robust and streamlined governance processes to avoid uncertainties, duplication and inefficiencies; and
</li>
<li>
developing and maintaining comprehensive reporting systems to measure the effectiveness of fraud detection and treatment strategies.
</li>
</ul>
The recommendations made are aimed at enhancing the ATO’s communication and engagement with taxpayers and tax agents including better differentiation of potentially fraudulent taxpayers from those who may have merely overstated refund claims by mistake. The ATO has agreed in full with 12 recommendations and agreed in principle with the other. The effective implementation of these recommendations should ensure that the ATO program is further improved for taxpayers, Noroozi said.
Understandably, tax refunds are often the only thing many people think of when they think about tax, and many people are properly entitled to them. Nonetheless, the ATO has a duty to protect the integrity of the tax system (and that includes making sure tax refunds are properly given) which is why it seeks to check refunds in certain cases. Inappropriate delays in issuing refunds are, however, a matter of concern and it is to be hoped the Inspector-General's report leads to improvements.
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/" target="_blank">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article first appeared on <a href="https://www.SmartCompany.com.au">SmartCompany</a>.
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The tax refund delays that try taxpayers' patience: Why the hold-ups happen

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Data-matching by the Tax Office is now a well entrenched feature of the Australian tax landscape. It seems that almost not a week goes by without an announcement of some new Australian Tax Office data-matching project.
<a href="https://www.smartcompany.com.au/finance/tax/31198-beware-of-the-ato-s-data-matching-machine" target="_blank">Data-matching</a> is not about to stop. In fact, it will expand and a new proposal from the government will see new reports submitted to the Tax Office. Oh joy – another report to be done!
In November last year, the government announced its intention to proceed with the 2013-14 budget proposal by the former Labor government to improve tax compliance through third party reporting and data-matching. The proposal is designed to improve taxpayer compliance by increasing the information reported to the ATO by a range of third parties through the introduction of new reporting regimes. It is also proposed that this additional information would allow the ATO to offer an enhanced pre-filling service to taxpayers. The proposal is currently scheduled to commence from July 1, 2014 (although first reports would not be due to the ATO until after July 1, 2015).
In last year's federal budget, the former Labor government announced it would provide funds to the ATO to improve compliance for taxpayers by expanding data-matching with third party information.
Treasury has now released a discussion paper on the proposal. It notes that some of the elements of the proposal can be implemented by the ATO changing its administrative practices whereas others would require tax law changes. The paper only relates to those elements requiring legislative change.
This would involve the creation of new third party reporting regimes in relation to:
<ul>
<li>
sales of real property – To implement this proposal, the ATO would need to receive the following type of information for each real property transaction: vendor and purchaser name; vendor and purchaser address;  vendor and purchaser date of birth (for individuals); vendor and purchaser Australian Business Number or Australian Company Number (for entities); property details, including ID and address; property type (eg residential, commercial, new residence or vacant land); contract date; settlement date; and  consideration and any other costs and charges. The reporting of property information would not necessarily be restricted to an annual report. The likely reporting entities could be State and Territory Land Titles and Revenue Offices;
</li>
<li>
sales of shares and units in unit trusts – Sales of shares in companies and units in unit trusts may give rise to income tax (including Capital Gains Tax) consequences. Initially, the proposed reporting regime would apply to transactions for shares in companies listed on a recognised stock exchange. However, going forward, the paper says it may be possible and necessary to bring sales of "private company" shares within the reporting regime. To implement the reporting proposal, the ATO would need to receive the following type of information in relation to each share transaction: shareholder's name, address and date of birth (if applicable); shareholder's Tax File Number, ABN or ACN (if applicable); TFN withholding tax code; "non-resident indicator" in respect of the shareholder; company name and Australian Securities Exchange code, and the CHESS and internal registry reason codes; shareholder's account holding number (Share Reference Number/Holder Identification Number) (if applicable); acquisition and disposal dates, prices and quantities; incidental costs (such as broker's fees); and any capital returns or payments and the associated dates. Those most likely to have ready access to the required information would be the "market participant" executing the transaction, the clearing house provider used by the market participant to facilitate the transfer, and the Share Registry maintaining the company's share register (particularly in relation to "off-market" transfers);
</li>
<li>
sales through merchant debit and credit services – To implement this proposal, the ATO would need to receive the following type of information: merchant name, address and ABN or date of birth; all monthly purchase/sale amounts from credit card and debit card transactions; and all monthly cash out amounts. The reporter would be the entity that provides the payment facilities to the merchant. Traditionally, this has been financial institutions that operate in Australia’s payment system and are attached to card schemes (eg financial institutions and banks providing such services). However, the expansion of the e-commerce market has impacted the methods consumers use to purchase goods and services. Under this proposal, where an entity provides merchant payment facilities for debit and credit payments, they would need to report to the ATO; and
</li>
<li>
taxable government grants and other payments – To implement this proposal, the ATO would need to receive the following type of information for each grant or payment recipient: ABN (for grants and payments made to businesses); TFN or date of birth (for grants made to non-business individuals); full name; address; gross amount paid; total GST (if applicable); BSB and account number; and other contact details such as phone number or email address. All government entities including federal, state, territory and local government bodies that make grants and payments are likely to collect some of this information.
</li>
</ul>
In respect of the above, the ATO would initially seek to receive annual reports and then seek to move to quarterly, monthly or "real time" reporting.
The paper sets out a preliminary set of law design principles that could form the legislative basis for the new reporting regimes. However, it notes that the final form of any draft legislation would depend on the final form of the policy design and this, in turn, will be informed by the outcomes of the consultation process. Accordingly, the government says it is seeking feedback on policy issues and, in particular, and SMEs should take note, the compliance cost impacts of the proposed reporting regimes.
The proposed reporting regimes would be designed so that in most cases third parties would only need to provide information to the ATO that they receive or record in the ordinary course of their business or operations. That's fine, but it doesn't mean a third party won't incur costs in reporting the new information. However, as an effective third party reporting regime depends on the ATO being able to match the reported data to the relevant taxpayer, some additional identifying information may be required.
For individuals, the minimum amount of identifying information needed to provide high confidence identity matching for tax purposes is their name, address and either date of birth or TFN. However, it is important to note there are tax and privacy law restrictions on requesting, recording and using TFNs which would need to be taken into account when considering the use of TFNs in these proposed reporting regimes. For business taxpayers (including individuals in a business), the minimum information is name, address and either an ABN, ACN or TFN.
Whilst it is likely that many of the proposed reporting entities currently collect an entity's unique identifiers in the ordinary course of their activities, there may be some that do not. The paper says these entities would be required to collect this additional information and report it to the ATO under the proposed reporting regimes.
SMEs should note that comments on the Treasury paper are due by March 11, 2014, with details on the <a href="https://www.treasury.gov.au/ConsultationsandReviews/Consultations/2014/Improving-tax-compliance" target="_blank">Treasury website</a>.
The range of data being collected by the Tax Office is ever expanding. Businesses should not underestimate the use to which this data will be put. It's trite to say, but Big Brother is alive and well – even if that data does help with the pre-filling of tax returns.
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/" target="_blank">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany</a>.<a target="_blank" href="https://www.SmartCompany.com.au"></a>
            
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New data reporting regimes for tax compliance will extend ATO's reach

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Scams involving tax are not uncommon. They <a href="https://www.smartcompany.com.au/finance/tax/1656-tax-office-warns-against-tax-refund-scam" target="_blank">surface regularly</a>. The scams range from the very basic to the quite sophisticated. People and businesses need to be on their toes not to be fooled by the scammers.
Most recently, NSW Fair Trading Minister Stuart Ayres said Fair Trading had received a report of a <a href="https://www.propertyobserver.com.au/news/ato-scam-alert-fake-landlord-tax-exemption/2014013067441" target="_blank">scam letter offering landlords living overseas the opportunity to claim a tax exemption on rental income</a>.
He said the letter advises agencies managing landlords to forward forms to them to complete and return to the scammers. The forms require detailed personal information as well as photocopies of passports and mortgage account numbers. The covering letter in the scam email is badly written with numerous errors of grammar and spelling (this is not uncommon).
The letters aim to harvest details from real estate agents about Australian properties they manage on behalf of non-residents. The scammers may then seek to assume the identities of the non-residents and sell their Australian properties without the real owners' knowledge.
Ayres said Fair Trading had issued a warning about the same scam in July last year after it was reported by a real estate agent in Lennox Head. The ATO confirmed the scam to Fair Trading and that identical fake Her Majesty’s Revenue and Customs letters had been sent to real estate agents in the United Kingdom since at least March 2012, he said.
The scam letter may also feature fake ATO branding, as well as branding from other revenue jurisdictions (e.g. from HMRC in the UK). Ayres said these types of widely circulated scams are regularly sent to other international jurisdictions and the perpetrators often fail to change all details. A similar scam was identified in Western Australia in 2012.
The HMRC and ATO signature on the scam letters is identical and in some places in the ATO letter, the scammers have failed to replace the HMRC references, he said.
ATO Chief Technology Officer Todd Heather said the ATO's brand was often employed in scams due to the Tax Office's intensive interaction with the community and their willingness to comply with requests from the ATO. “Scammers are relying on more sophisticated methods to trick people into handing over their financial or personal contact details,” he said.
The scam flagged by Fair Trading, as with many others reported to the ATO, asks people for their personal details so they can likely commit identity theft and other types of fraud. Heather said the ATO has seen this scam over the past two years and have dealt with it by informing real estate industry associations and asking them to warn their members.
In 2013 alone, the ATO received almost 50,000 reports from the public about ATO branded scams.
To avoid being scammed, NSW Fair Trading offers some sensible advice:
<ul>
<li>
Don't respond to offers, deals or requests for your personal details. Stop. Take time to independently check the request or offer.
</li>
<li>
Never send money or give credit card, account or other personal details to anyone who makes unsolicited offers or requests for your information.
</li>
<li>
Don't rely on glowing testimonials: find solid evidence from independent sources (not those provided with the offer).
</li>
<li>
Never respond to out of the blue requests for your personal details.
</li>
<li>
Always type in the address of the website of a bank, business or authority you are interested in to ensure you are logging onto the genuine website.
</li>
<li>
Don't open unsolicited emails.
</li>
</ul>
Regularly updated information on tax-related scams and online security is available on the <a href="https://www.ato.gov.au/General/Online-services/In-detail/Online/Online-security/">ATO website</a>. 
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article first appeared on <a target="_blank" href="https://www.SmartCompany.com.au">SmartCompany.</a>
 
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Beware of tax scams: How to make sure you don’t get fleeced

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The GST laws can apply to a weird and wonderful range of things, and some fine distinctions are often sought to be made by the Tax Office in applying those laws.
Feeling sleepy already (at the mention of distinctions in tax law)? I can't blame you, but a recent decision by the Administrative Appeals Tribunal showed how the law can work in favour of a business, although not as it may have thought.
The Tax Commissioner had made a decision that a sleep positioning system produced by a company which assists users to control sleep apnoea was subject to GST. The company objected and the matter came before the AAT.
The AAT set aside a decision by the Tax Commissioner and held that the system was GST-free under provisions of of the GST Act as it was a medical aid. This is good news for customers who won't have to pay GST on the item. But the way the AAT reached its conclusion is interesting.
The company in this case, Snugfit Australia, is registered for GST and supplies a sleep positioning product known as "SnoreBeGone", which assists users to control sleep apnoea. The product is designed to support the body when a person is sleeping in such a way as to prevent the person snoring. It is made of foam with a fabric cover, and is designed to be used in conjunction with a mattress to encourage side sleeping.
The Tax Commissioner issued a private ruling, sought by the company, which found the product was subject to GST. The company's objection to the ruling was disallowed. Before the AAT, the company argued that the product was GST-free as it was covered by Items 82 ("night-time positioning equipment modifications"), 64 (bed restraints), 67 (backrests, leg rests and footboards for bed use), or 87 (cushions specifically designed for people with disabilities) of Schedule 3 to s 38-45(1) of the GST Act. That's enough technicalities for the moment!
According to the AAT, it is the modifications to "night-time positioning equipment" (ie a mattress) that are exempted under Item 82, not the equipment itself. It said from the marketing material and from an examination of the product, it was clear that it was designed to be used in conjunction with another sleeping surface, thereby modifying it.
Therefore, the AAT held the product came within the description contained in Item 82 as the product modifies the shape of a mattress to accommodate the requirements of a person with a disability and is GST-free.
The Tax Office considers that the AAT's decision that the product modifies a mattress turned solely upon the facts of the case, and the description of the product forming part of the scheme set out in the private binding ruling made by the Commissioner. The ATO considers the AAT decision does not have any broader impact on the meaning of the term "modification" in other contexts.
However, the ATO said it is reviewing its view, given in a 2002 Interpretative Decision about the GST treatment of contoured pillows to determine whether it ought to be revised or withdrawn in light of the AAT's decision. The ATO noted that, in order to be GST-free under the GST laws, the relevant product must also be specifically designed for people with an illness or disability, and not widely used by people without an illness or disability.
As I said at the beginning, the GST laws deal with some weird and wonderful things. But it's not difficult to argue that the GST law itself is at times a weird and wonderful thing. The GST law, and the old sales tax that preceded it, were full of "fine line" distinctions on whether various products and services were or were not subject to tax. Those calling for simplification of tax and GST laws have a point.
Terry Hayes is the editor-in-chief of tax news reporting at <a target="_blank" href="https://www.thomsonreuters.com.au/">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
 
 
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The weird and wonderful applications of the GST law

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Under the GST law, a person or a business can claim input tax credits (ITCs) for acquiring things for a creditable purpose. A taxpayer acquires a thing for a “creditable purpose” to the extent he or she acquires it in carrying on his or her enterprise.
However, the GST law provides that a taxpayer does not acquire a thing for creditable purpose to the extent the acquisition is of a private or domestic nature.
Seems relatively straightforward – if that can ever be said about taxation matters! But, spending money on acquiring things of a private or domestic nature can be an area that confuses many.
In a recent AAT case, the Tribunal upheld GST and penalty assessments against a taxpayer concerning incorrect claims for ITCs.
The taxpayer carried on a computer repair business. Following an audit of the taxpayer's BASs for the period March 31, 2007 to February 28, 2011, the ATO issued GST net amount assessments, penalty assessments and cancelled the taxpayer's GST registration.
The Tax Commissioner disallowed many (although not all) of the taxpayer's ITC claims on the basis that he did not consider the taxpayer was carrying on an enterprise during the relevant tax periods, that the expenses on which the ITC claims were based appeared to be private in nature (e.g. certain legal and health expenses) and were considered not to have any obvious links to commercial activity, and that the taxpayer did not provide tax invoices for the expenses as claimed creditable acquisitions.
In an along-the-way win for the taxpayer, the Tribunal noted that the Commissioner reconsidered the matter in light of additional information since provided by the taxpayer, and now accepted that the taxpayer was carrying on an enterprise during the relevant tax periods and that the decision to cancel his GST registration should be set aside. For this reason, the Commissioner also accepted that some (but not all) of the input tax credits claimed were properly allowable.
In the taxpayer's case, the Tribunal said the reasons for the relevant supplies (ie made to him) not being taxable included that either it had not been established that the person making the supplies was registered or required to be registered and/or that the supplies by that person were GST-free or input taxed.
The Tribunal said the taxpayer claimed an ITC in respect of his purchase of a second-hand motor vehicle pursuant to a "private sale". No invoice was produced for this transaction. As no GST liability would have been incurred by the seller, the taxpayer was not entitled to any input tax credit.
The taxpayer also claimed a number of items for "occupancy expenses". The AAT said the Commissioner understood those expenses related to the taxpayer's personal accommodation, particularly in a private home in Perth. He did not accept the expenses were "creditable acquisitions". The Tribunal said no invoices were provided by the taxpayer in respect of the claims, so it had not been established that any GST was paid or incurred by the person that supplied the accommodation to the taxpayer.
The Tribunal worked through a number of other ITC claims that had been made by the taxpayer, finding that most were not allowable. It worked through the taxpayer's exercise book ledgers in the process. These included:
<ul>
<li>
Running expenses – the AAT said there was no evidence that any GST was incurred by the relevant supplier of those expenses.
</li>
<li>
Legal expenses – understood to relate to expenses connected to an assault the taxpayer suffered at a hotel. The AAT saw no connection with the taxpayer's business activity.
</li>
<li>
Health expenses, including gym expenses – the AAT considered that the items claimed are clearly private or domestic in nature and were insufficiently connected to the taxpayer's business.
</li>
<li>
Finance expenses – the Tax Commissioner said he was unable to match most of those items to invoices so that he could not be sure exactly what they relate to. In addition, some items related to cash advances made to the taxpayer but the AAT said the documents relating to these made no reference to any GST payable by anyone.
</li>
<li>
Electronic goods – again, the Tax Commissioner said he was unable to match most of those items to documentary evidence.
</li>
<li>
Reference magazines – the Commissioner accepted that the taxpayer's purchases of relevant information technology magazines were sufficiently related to his enterprise to be properly regarded as creditable acquisitions for GST purposes. But the same could not be said of other magazines the taxpayer purchased.
</li>
<li>
Event "hosting" - The items claimed under this characterisation related to functions held by the taxpayer in his room at the house for friends and/or clients. The Tax Commissioner's understanding was that attendance at these functions was by invitation only and was not open to the public generally. If that is the case, then these expenses cannot be creditable acquisitions because they are excluded by a specific provision in the GST Act.
</li>
<li>
Imported items - The taxpayer made a number of claims for imported items described as "reference-magazine" or "reference-book" and so on. The relevant invoices in each case showed that the relevant item was imported and do not record any GST component. The AAT said that, as stated, each acquisition was “A non-taxable importation” pursuant to the GST Act and the Customs Tariff Act 1995 – essentially because the value of the goods imported did not exceed $1000. Any such importation will not be a “creditable importation” pursuant to the GST Act. As such, there is no entitlement to an input tax credit for that importation.
</li>
</ul>
The Tax Commissioner allowed part of the taxpayer's claims concerning travel and telephone expenses.
After reviewing the case, the Tribunal considered that the GST net amount assessments in relation to each of the 48 individual monthly tax periods ended March 31, 2007 to February 28, 2011 inclusive were not open to review.
The AAT said it accepted that the inference from the evidence and the taxpayer's conduct throughout was that it showed a disregard of or indifference to a risk foreseeable by a reasonable person. The Tribunal saw no basis to counter the Commissioner's submission that the taxpayer's behaviour was reckless in that he claimed input tax credits for items clearly private or personal in nature and/or not acquired in the carrying on of the enterprise.
Taxpayers in business can validly claim input tax credits for many expenses they incur that relate to the business. However, it must be proved that GST was incurred or paid by the supplier of the goods/services and that they relate to carrying on an enterprise. The taxpayer in the above AAT case was not able to prove this to the satisfaction of the Tribunal in regard to many of the expenses he claimed. SMEs should take note.
For those interested in knowing more about how the GST system operates, the Thomson Reuters Australian GST Handbook 2013-14 contains an excellent explanation of the GST system, covering all aspects of the GST legislation – simply <a href="https://www.propertyobserver.com.au/https://www.thomsonreuters.com.au/australian-gst-handbook-2013-14-book/productdetail/120389">visit our website for details</a>.

<hr>
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions. Featured product is the 2013-14 edition of "The Essential SMSF Guide", written by Tony Negline – see details <a href="https://www.propertyobserver.com.au/https://www.thomsonreuters.com.au/the-essential-smsf-guide-2013-14/productdetail/120644?utm_source=smartcompany&amp;utm_medium=webpage&amp;utm_campaign=smsf">here</a>.
This article first appeared on <a href="https://SmartCompany.com.au" target="_blank">SmartCompany</a>.
 
 
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Claiming GST credits can be very costly without a ‘creditable purpose'

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The tax law contains exemptions from capital gains tax (CGT) for a person's principal or main residence. But, as always, it's not as simple as it sounds. The rules can be tricky to understand.
The Administrative Appeals Tribunal (AAT) recently upheld the Tax Commissioner's decision denying a man's claim for the CGT main residence exemption in relation to a disposal of a property he claimed was his home.
The issues revolved around whether the house became the man's main residence as soon as practicable after the completion of its construction, and whether the house continued to be his main residence for at least three months after that (as the law requires in order to get the CGT exemption).
The man submitted that he had purchased land in July 2002 for $174,000 with his then de facto partner. The construction of the house commenced in April 2004; however, his relationship with his then partner ended in September 2004. In approximately May or June 2005, he and his then ex-partner moved into the house "to enable us to meet the requirements to sell the property 'without' being subject to CGT". In the first week of September 2005, the man moved out of the house and went to live with his sister in Queensland, and in November 2005, the house was sold for $703,000. On December 23, 2005, the man told the AAT that he left Australia “with a three week open (return) ticket, met [his] (now wife) and resettled in the UK”.
A net capital gain of $114,675 on the sale of the property was included as income in the man's tax assessment for the 2006 income year. He disputed the inclusion of the capital gain in his income for the 2006 year on the basis that he was entitled to the CGT main residence exemption. Before the hearing, the man provided the Commissioner with documentary evidence of certain construction, holding and sale costs, which the Commissioner accepted – this reduced the net capital gain to $66,271.
The AAT held the evidence before it failed to establish that the house became the man's main residence as soon as practicable after the completion of its construction and that the house continued to be the taxpayer's main residence for at least three months after that, as required by the relevant tax law.
The Tribunal noted an email the taxpayer had sent to the ATO which indicated that he had moved out of the house in the first week of September 2005, which left open the possibility that he lived in the house for a period of less than three months (i.e. from the second week in June 2005 to the first week of September 2005). The Tribunal also noted the taxpayer had not provided evidence (such as a Certificate of Occupancy, the date that final building inspection approval was granted or any “hand-over” documents from the builder) that the house became his main residence "as soon as practicable" after the completion of the house. Further, it noted there was no evidence of any gas or electricity accounts for the house in the taxpayer's name.
Although the man claimed he moved his personal belongings into the house when he moved into it in about May or June 2005, the Tribunal said the evidence indicated his main residence was at his sister's home in Queensland (and not the house in question) from at least the time of his separation from his ex-partner in September 2004. Other factors noted by the Tribunal included:
<ul>
<li>
from 2002 to September 2005, the man worked as a mine worker on a fly-in fly-out basis which involved working two weeks on and one week off;
</li>
<li>
in October 2004, the man redirected his mail to the Queensland address;
</li>
<li>
in December 2004, the man obtained a Queensland driver's licence (which nominated the Queensland address as his residential address); and
</li>
<li>
in the man's 2004-05 tax return, he nominated the Queensland address as his home address.
</li>
</ul>
Accordingly, the AAT held that the man had failed to discharge the burden of proof that the assessment should not have been made or should have been made differently.
In this particular case, the tax laws surrounding the CGT main residence exemption were relatively straightforward, but the individual in the case simply could not prove to the satisfaction of the AAT that the Tax Commissioner was wrong and that he qualified for the exemption.
For those wanting to know more about how CGT works, including the main residence exemption, the forthcoming Thomson Reuters CGT Guide for SME Practitioners is a very helpful guide. Among other things, it explains how CGT rules are applied to transaction-based issues, and contains useful tips, warnings and checklists. For details, see the <a href="https://www.propertyobserver.com.au/https://www.thomsonreuters.com.au/cgt-guide-for-sme-practitioners-checkpoint/productdetail/120523" rel="nofollow">Thomson Reuters website</a>.
 
<hr>
Terry Hayes is the editor-in-chief of tax news reporting at <a rel="nofollow" href="https://www.thomsonreuters.com.au/">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article originally appeared on <a rel="nofollow" target="_parent" href="https://www.smartcompany.com.au/">SmartCompany</a>.
 
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Get your house in order, what you need to know about capital gains tax: Terry Hayes

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

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[smartcode_project_cta:default project_id=152737]

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Terry Hayes

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