Tax implications of Cryptocurrency

Posted on April 14, 2018September 19, 2023 by Admin

The boom this year in cryptocurrency trading and mining has created a new set of considerations for investors. In some countries cryptocurrency is actually illegal in its entirety. In Australia, it has been legal since 2014 and the ATO has issued tax guidance with a tax lawyer on the subject with evolving depth and complexity since then. Australia has been an area of growth for cryptocurrency operations because Australia was one of the first countries to specifically legalize it. Make sure to trade on the best day trading platform uk. Also, there are already controls on money laundering through cryptocurrency in Australia and exchanges have already been audited by the ATO for information concerning the identities of the holders of various bitcoin accounts. It appears that this early degree of regulation has actually engendered a higher degree of trust in cryptocurrency in Australia than in other jurisdictions where it is entirely unregulated.

At present, the ATO’s official view is that Bitcoin and the cryptocurrencies which operate in a similar way is neither money nor Australian or foreign currency. Rather, it is property and is an asset for capital gains tax (CGT) purposes. However, it is important to note that there is at present very little if any guidance from courts on the subject. In the final analysis, courts interpret the laws laid down by parliament. The ATO can provide interpretive guidance on the law but cannot ‘make law’ in the sense that courts can. It is entirely possible that decisions of the courts in the future could lead to new interpretations of the tax positions of cryptocurrency. The legislation which has been expounded by parliament has also been generic in nature and targeted to the specific circumstances of various groups dealing cryptocurrency.

It is at present uncertain to some degree what the treatment of cryptocurrency might be in terms of income or capital and what deductions might apply in the case of each and the result will most likely depend on the circumstances of the individuals or organizations concerned. Mining operations for cryptocurrency also have attracted interpretive guidance from the ATO but as yet no definitive statement of law from the courts.

We have already accumulated significant experience with the taxation and legal implications of cryptocurrency and would be more than happy to assist you with advice or representation if required. Our lawyers have a deep understanding of the world of cryptocurrency and how regulation applies to it in Australia.

14 April 2018

Exit Fees and Refinancing

Posted on December 21, 2010 by Admin

One of the major barriers to refinancing to a better loan is the fact that there are now moves to abolish the punishing exit fees which prevent people from switching to a better deal on a home loan. In the new package announced by the government desinged to control the big four bank monopoly, Treasurer Wayne Swan at the weekend that borrowers who take out a home loan from July next year will be spared an early exit fee.

The new legislation, to be introduced in 2011, would see lenders prosecuted if they tried attempt to re-introduce exit fees under another title. As it stands, the Commonwealth and Westpac banks charge a $700 and $900 exit fee respectively. ANZ has also offered some sweeteners. It says it will abolish its deferred establishment fee, more commonly termed an exit fee, as well as dropping fees for customers switching to a special three-year fixed loan it is offering. ANZ is cutting its three-year fixed home loan rate by 44 basis points to 7.1 per cent per annum until the end of the year.

ANZ says there will not be any more increases in the bank’s interest rates for now. “Obviously we will continue to keep a close watch on funding costs. Certainly I hope there isn’t any further move because I do appreciate that this is very stressful on many of our customers,” he said.

This reform will make it much simplier and cheaper to exit a home loan and change to a provider who can offer a better deal, increasing the overall competitiveness of the banking sector as they are forced to match each other’s prices when customer’s fly to to the cheaper loans or the loans that provide a better service. If you are interested in refinancing, a solicitor can assist you with the transfer of the loan by discharging the mortgage and creating the new mortgage with the bank.

Bank Fees Class Action

Posted on August 8, 2010 by Admin

Banks could charge up to $60 if you became overdrawn, went beyond an agreed limit, or made a late payment. Although the real cost of this is probably only one or two dollars, Banks have netted millions as a result. Litigation funding firms have now begun planning large scale class actions, to make banks repay all the exception fees they have deducted over the last six years, plus interest. The normal deal on litigation funding like this is that the lender will receive its money back and a 25% share of any compensation received.

The banks which are involved in this class action and could be liable to anyone who was a customer of theirs that they charged these fees to. The banks who are involved in these actions include Australia New Zealand Banking Corporation (ANZ), Bank of Queensland, Bank South Australia, Bankwest, Bendigo Bank, Citibank,
Commonwealth Bank, Hong Kong Shanghai Banking Corporation (HSBC), National Australia Bank (NAB), St. George, Suncorp and Westpac. If you think that you may have a case in relation to these banks the option of litigation funding makes it very likely that you can litigate this case without any financial risk involved. Please do not hesitate to contact us using the contact form on this site if you would like more information about the bank fees class action.

Changes to Superannuation Law Proposed

Posted on July 6, 2010 by Admin

The chief of the Super System Review, Mr Jeremy Cooper has made a determination that over competitiveness in the industry is leading to a failure to capture economies of scale which could be used to benefit fund members and managers. The enormous power which the $2 trillion dollar industry now yields in investment markets means that these funds should be able to gain much better results for their members than they currently obtain. The review system is now of the view that funds should adopt a much more aggressive and direct investment strategy in order to maximize returns by directly owning assets and reducing the fees of intermediaries. The vision of the regulator is that there would one day be only a small number of funds in operation in Australia. This vision consists of only 27 large Australian Prudential Regulation Authority-regulated funds, three with assets of about $200bn, four with $100bn and the rest with an average size of $50bn each. The proposal emphasizes the need for super funds to refocus on funds staking rights for substantial amounts of capital. The examples which the regulator gave of the Australian Superannuation industry missing out on substantial returns as a result of the failure to conglomerate was the where some of the largest Canadian pension funds made a bid for the Transurban group.

Critics of the proposal point out that without substantial incentives for funds to aggregate, it is unlikely that this proposal will be realistic. Also the monopolistic power of the funds would be a concern in terms of the macroeconomic structure of the market for superannuation in Australia. The choice available to consumers would be more limited and less personalized. The commentators who seemed neutral about the proposal reacted by saying that the message from the talk was that the system of superannuation was ultimately built for members and that it has been hijacked by sales people and investment managers and the government intends to restore control to members and the fundamental benefits of the system to members.

National Consumer Credit Code – How will these legal changes affect my business?

Posted on May 25, 2010 by Admin

On 27 April 2009, the Federal Government introduced the National Consumer Credit Reform Package. In the time since then, the new legislation has passed and is soon to become operative. The new legislation is the National Consumer Credit Protection Act 2009 (Cth) which is designed to provide additional safeguards and protections to the process of obtaining credit in this country for all types of consumer credit credit from credit cards to mortgages. The new legislation has been made possible as a result of the referral power in s.51(xxxvii) of the Constitution which has allowed the matter to be referred to the Commonwealth from the States. This was because of the meeting of the Council of Australian Governments (COAG) where it was decided that reform was needed in light of the global financial crisis. Amongst other things, the objective of the package is to replace the state system of consumer credit regulation with a consistent overarching national system which applies in the same way across all of the states. Although the major content of the bill will simply replace the existing consumer credit codes with the same regulations, the new legislation will also require businesses engaging in ‘credit activity’ to hold an Australia Credit Licence which will mean that providers such as finance brokers, mortgage managers and assignees of the major banks will need licences where previously they may not have.

The objective of the licence is to ensure that activities of credit providers are carried out efficiently, honestly and fairly and ensure that the representative are trained and competent to engage in the activities for which they are licensed. The enforcement of the act with be both the power and responsibility of the Australian Securities and Investments Commission. If misconduct occurs, imprisonment of 5 years and civil penalties of up to $220,000 or $1.1million for a corporation can apply. Also, new requirements are to apply to the giving of loans and brokers will need to ensure that the a loan is suitable for a consumer’s needs and that they have the capacity to repay the loan. This will include the obligation to make reasonable inquiries about the financial position of the consumer and to attempt to verify that the information given is correct. Also, credit institutions will need to find out what purpose the credit is being used for and a purpose declaration. Disclosure obligations will also come in in relation to the receipt of commissions. One of the newer and more novel areas to be reformed is that now credit from strata corporations to purchase or renovate buildings will be regulated by the new legislation and another reform is the increasing of the thresholds available for a hardship application. If you would like more information about the consumer credit code and how these changes will affect your business please do not hesitate to contact us.

Changes to the laws of Banking and Finance in Australia

Posted on May 18, 2010October 16, 2023 by Admin

There are a series of sweeping reforms which are about to take place in the Australian system of financial regulation. These will have a marked impact on the way as securities are dealt with under the corporations act and in particular the way that insolvency practitioners manage the securities of insolvent companies. although the bill has not passed yet it is anticipated that it will pass within the next few months and will then become law. There are a series of education programs available in relation to this new legislation, however it will affect many businesses large and small and no matter what type of business you are in it will certainly have an impact at least indirectly on the financial systems which your business employs in its operations, while financial education is also important and resources from straight.com/guides/ can be helpful with this.

The Personal Property Securities (Corporations and Other Amendments) Bill 2010 was introduced into Federal Parliament on 10 March 2010, it is expected to pass soon. This act institutes a number of changes to the system of financial regulation in Australia through changes to the corporations legislation and the institution of some new additional reforms.

The important aspects of the amendments include:

1. Provisions changing the system of registration of charges.
2. Making the Corporations Act more focussed on functional outcomes in relation to securities.
3. More exemptions for interests under the Act;
4. Changes to the priority and extinguishment rules;
5. Changes to the enforcement provisions; and
6. Alterations to the rules governing insolvency practitioners and the management of security interests in insolvent entities.

If you would like more information about these changes to the banking and finance laws which are occurring in Australia, we would be more than happy to help you understand how this will impact your business. Our platform helps you navigate complex processing credit card fees structures. Undoubtedly the new legislation will have a very broad effect and it would certainly be wise to consult a lawyer in relation to how you can change your business to adapt to this new system of regulation.