Div 15: Allowances in respect of employment (s 15-2): 3 elements: Must be a benefit / allowance Benefit must be or “allowed, given granted” Nexus with employment / services rendered Things not included: super lump sum; annual leave payment; dividend; amount assessable as ordinary income under s 6-5 (s 15-2(3)(d)) etc. Note: most things will be fringe benefit, ordinary income or not income, so section doesn’t really work… Return to work payments (s 15-3) Royalties (s 15-20) Indemnity for loss of assessable income (s 15-30) Interest on early payment or overpayments of tax (s 15-35) Reimbursed car expense (s 15-70) Trading stock adjustments (Div 70) and of course: CGT (s 102-5) … CONFLICT RULES Where an amount is both ordinary \ and statutory income, it will be included as assessable income once only (s 6-25). The statutory income provisions prevail over the rules about ordinary income unless otherwise provided (eg. s 15-2). TRADING STOCK Is [product] trading stock? Some items normally considered capital may be trading stock and impact assessable business income (an adjustment for movement in stock) Trading stock is: Anything produced, manufacture red or acquired That is held For the purpose of manufacture, sale or exchange In the ordinary course of business It includes livestock (s 70-10(b)) Examples: land (if in bus of selling land), CDs for music store, shares for share trade, clothes for retailer
Div 15: Allowances in respect of employment (s 15-2): 3 elements: Must be a benefit / allowance Benefit must be “allowed, given or granted” Nexus with employment / services rendered Things not included: super lump sum; annual leave payment; dividend; amount assessable as ordinary income under s 6-5 (s 15-2(3)(d)) etc. Note: most things will be fringe benefit, ordinary income or not income, so section doesn’t really work… Return to work payments (s 15-3) Royalties (s 15-20) Indemnity for loss of assessable income (s 15-30) Interest on early payment or overpayments of tax (s 15-35) Reimbursed car expense (s 15-70) Trading stock adjustments (Div 70) … and of course: CGT (s 102-5) CONFLICT RULES Where an amount is both ordinary \ and statutory income, it will be included as assessable income once only (s 6-25). The statutory income provisions prevail over the rules about ordinary income unless otherwise provided (eg. s 15-2). TRADING STOCK Is [product] trading stock? Some items normally considered capital may be trading stock and impact assessable business income (an adjustment for movement in stock) Trading stock is: Anything produced, manufacture red or acquired That is held For the purpose of manufacture, sale or exchange In the ordinary course of business It includes livestock (s 70-10(b)) Examples: land (if in bus of selling land), CDs for music store, shares for share trade, clothes for retailer