Editor: The following three cases are good examples of why
you should always get tax advice up-front before entering into
Case 1 is the sad tale of a taxpayer who sold a
property, didn't receive the full proceeds of the sale but
still had to pay the taxman the GST, as if they had received the
In this case, when the purchaser couldn't come up with the
full amount at settlement, the taxpayer entered into a vendor's
finance agreement. Under that agreement, the vendor effectively
'loaned' the balance of the purchase price to the
As a result, the taxpayer had to pay GST on the full amount.
In the end, the purchaser couldn't pay the full amount they
owed to the vendor. Nonetheless, GST was still payable on the full
Case 2 involved a taxpayer who deposited
$430,000 into his super fund. When the GFC hit, he panicked and
withdrew half. Six months later he reconsidered, and redeposited
Now, you're only allowed to deposit $450,000 in your own
contributions in a three year period (if you're under 65). But
he thought that, on a net contribution basis, he was OK given that
he had withdrawn about $200K.
Unfortunately, the rules are simple. Don't contribute more
He did and was slugged excess contributions tax on the extra
$80,000 that went into the fund.
Case 3 involved a council worker who claimed
that he was also a share trader, not merely a share investor
– probably to be able to claim losses on sales of shares.
Even though the taxpayer had turnovers of $934,575 and $385,938
in the years concerned, the AAT member presiding over the case said
that while it was more than a hobby, it was not a business.
The taxpayer even maintained an office specifically for the
purpose of conducting his share trades and for accounting and tax
Editor: Quite clearly, this was a "line ball"
decision that unfortunately went against the taxpayer. Good advice
would have cautioned him to prepare business plans and conduct
himself in a more "business-like" way. Cases 1 and 2
could equally have gone the taxpayers' way with the right
Exemptions or concessions on stamp duty could apply when contemplating the purchase or transfer of NSW real estate.
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