Current news from our news service

Hot Issues
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Tax Time Checklists - Individuals; Company; Trust; Partnership; and Super Funds
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Year-end tax planning
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Home Office & end of 2021 tax year
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ATO extends STP finalisation due date
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Super transfer balance cap increase from 1 July 2021
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ATO extends Division 7A COVID-19 relief
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Tax implications - more than one job
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Tax mix to rely more heavily on income tax as the Treasurer ducks austerity
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10% Super Guarantee from 1st July 2021
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End of year financial strategies
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Closely held payees: STP options for small employers
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Videos to help understand accounting topics.
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ATO Small Business Newsroom - May / June
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New insolvency rules commence
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ATO sheds light on crypto compliance focus
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Post Federal budget reflections
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Federal Budget 2021 - Overview
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Building a more secure and resilient Australia
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Federal Budget 2021 - Health
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ATO signals crackdown on 4 ineligible work-from-home claims
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Taxpayers urged to keep work-from-home records
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Businesses feeling ‘adverse’ impacts of COVID-safe measures: ABS
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New insolvency rules commence
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ATO promises not to ‘destroy’ businesses as it resumes debt collection
Article archive
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Quarter 4 October - December 2015
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Quarter 3 July - September 2015
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Quarter 2 April - June 2015
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Quarter 1 January - March 2015
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Quarter 4 October - December 2014
Quarter 1 of, 2015 archive
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ATO states estimates are acceptable
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Hockey considers super access for first time home buyers
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Reportable Fringe Benefit Amount - Employer Reporting
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Simple Mistake on Share Transfer
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ATO highlights billions in forgotten super
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In a bankruptcy what does a trustee do?
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Bankruptcies, what are they?
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SMSF trustees unprepared for new collectibles rules
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We wish all our clients a Merry Christmas, a Happy New Year and a restful holiday
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Employee Christmas Parties and Gifts – Any FBT?
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Breaking down the latest ATO determination on TRIS
Bankruptcies, what are they?

 

In each of 2013 and 2014 financial years approximately 20,000 Australians declared themselves bankrupt.

       

A declaration of bankruptcy is one of several options available to persons who may be insolvent and provides a finalisation or moratorium to all of their creditors.  It may be initiated by either the debtor themselves or a creditors petition via the courts.

The affairs of the debtor are transferred to a specialist accountant who then stands in the shoes of the debtor and then acts with all the authority in place of the debtor.

It provides an elimination of all obligations and disposal of most property.  All debts e.g. tax debts, credit cards, telephone accounts, which are unsecured, will be eliminated, whilst secured debts e.g. home loan, business loan will be complicated until enforcement of security determines what equity (if any) exists.

It may also cause problems for anyone who has guaranteed an account e.g. a parent who has guaranteed a phone plan for a minor.

The trustee ends the bankruptcy by making a distribution to creditors to finalise their entitlements.  The debtor is then, after the period of bankruptcy (typically five years) able to start their financial arrangements again.  Obtaining credit and starting a new business will certainly not be as easy with bad credit ratings and financiers reluctant to advance other than a minimum level of credit.  Previously simple tasks e.g. renting, phone and utilities will be challenging.

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