General information

Australian Business Register

We are authorised by the A New Tax System (Australian Business Number) Act 1999 and other taxation laws to collect certain information relating to your entity. We may use business details supplied on the tax return to update the information held in the Australian Business Register (ABR) in relation to your entity. This may include cancelling the ABN if your entity is no longer entitled to be registered in the ABR.

Where authorised by law, selected information on the ABR may be made publicly available and some may be passed on to other Commonwealth, state, territory and local government agencies. These agencies may use ABR information for purposes authorised by their legislation, or for carrying out other functions of their agency. Examples of possible uses include registration, reporting, compliance, validation and updating of databases.

You can find details of agencies that regularly receive information from the ABR at abr.gov.auExternal Link or you can phone us on 13 92 26 between 8.00am and 6.00pm Monday to Friday to have a list of the agencies sent to you.

See our privacy statementExternal Link for more information about:

• privacy
• the information we collect
• how it may be used.

Foreign exchange (forex) gains and losses

Under the forex measures (Division 775 of the ITAA 1997) and the general translation and functional currency rules (Subdivisions 960-C and 960-D of the ITAA 1997), forex gains and losses are generally brought to account as assessable income or allowable deductions when realised. The forex measures cover both foreign currency denominated arrangements and, broadly, arrangements to be cash-settled in Australian currency with reference to a currency exchange rate. Forex gains and losses of a private or domestic nature, or in relation to exempt income or non-assessable non-exempt income, are not brought to account under the forex measures.

If a forex gain or loss is brought to account under the forex measures and under another provision of the tax law, it is assessable or deductible only under the forex measures.

Generally, where the TOFA rules apply to the forex gains and losses of a trust then those gains and losses will be brought to account under those TOFA rules instead of the forex measures.

Additionally, forex gains and losses will generally not be assessable or deductible under the forex measures if they arise from certain acquisitions or disposals of capital assets, including CGT assets and depreciating assets, and the time between the acquisition or disposal and the due date for payment is no more than 12 months. Instead, any forex gain or loss is usually matched with or integrated into the tax treatment of the underlying asset.

The general translation rule requires all tax-relevant amounts to be expressed in Australian currency regardless of whether there is an actual conversion of that foreign currency into Australian dollars.

The tax consequences of forex gains or losses on foreign currency assets, rights and obligations that were acquired or assumed before 1 July 2003 are determined under the law as it was before these measures came into effect, unless:

• you have made a transitional election that brings these arrangements under the forex measures, or
• there is an extension of an existing loan (for example, an extension by a new contract or a variation to an existing contract) that brings the arrangement within these measures.

For more information, see Foreign exchange gains and losses.

Interposed entity elections and family trust elections

The Tax Laws Amendment (2007 Measures No. 4) Act 2007 amended Schedule 2F to the Income Tax Assessment Act 1936 (ITAA 1936) to:

• allow interposed entity elections to be revoked where the election was made for an entity that was already included in the family group of the individual specified in the family trust election at the election commencement time. An interposed entity election may also be revoked at a later time where the entity becomes wholly owned by members of the family group. If an interposed entity election is revoked you need to complete an Interposed entity election or revocation 2018 (NAT 2788) and attach it to the trust’s tax return
• broaden the definition of family to include lineal descendants of a nephew, niece, or child of the test individual or the test individual’s spouse
• ensure that the death of a family member does not by itself result in another family member ceasing to be a member of the family
• exempt distributions made to former spouses, former widows/widowers and former stepchildren from family trust distribution tax by including them within the definition of family group
• allow family trust elections to be revoked if the family trust is a fixed trust or if the family trust election was not required for deduction of tax losses, bad debt deductions or accessing franking credits
• permit family trusts that have made a family trust election in respect of the same test individual to be included in each other’s family group and not treated as an outsider to the trust for the purposes of the income injection test
• allow the test individual specified in a family trust election to be changed only once, where the new test individual was a member of the original test individual’s family, provided that no conferrals of present entitlement to (or distributions of) income or capital of the family trust (or an interposed entity) have been made outside the new test individual’s family group.

Electronic lodgments

Tax agents who lodge trust tax returns through the electronic lodgment service (ELS) must complete the Partnerships and trusts rental property schedule 2018 if item 9 Rent is completed.

You do not have to complete that schedule if you are lodging a paper version of the trust tax return.

Information matching

We are making increasing use of information-matching technology to verify the correctness of tax returns.

Ensure all information is fully and correctly declared on your tax returns. Certain claims made may be subject to additional scrutiny by us.

In particular, we will be checking the following on the 2018 tax returns:

• distributions from partnerships and trusts
• total salary and wages paid against the pay as you go (PAYG) withholding system
• interest and dividend income
• franking credits claimed.

Hobby or business

It is important to determine whether the trust is carrying on a business, as distinct from pursuing a hobby, sport or recreational activity that does not produce assessable income.

The factors or business indicators various courts and tribunals have taken into account in determining if a business exists for tax purposes include whether the activity:

• has actually started
• has a significant commercial purpose or character
• is undertaken with a purpose of profit as well as a prospect of profit
• is carried out in a manner that is characteristic of the industry
• has repetition, regularity or continuity
• is planned, organised and carried on in a business-like manner
• is of a sufficient size, scale and permanency to generate a profit
• is not more properly described as a hobby, recreation or sporting activity.

For more information, see Are you in business? and TR 97/11 Income tax: am I carrying on a business of primary production?