Latest news with #taxpayers
CBC
8 hours ago
- Business
- CBC
Poilievre says Conservatives will back Liberal tax cuts, but wants them to go further
Conservative Leader Pierre Poilievre said Wednesday that his party will support proposed Liberal tax cuts but urged the governing party to make those cuts steeper. "We are the party of taxpayers. We will vote for every tax cut always and everywhere. We love taxpayers and we want taxpayers to be better off," Poilievre told reporters outside the House of Commons. "The question we always ask is, 'Is the proposal better than the status quo?' If it is then we support it. If it's not then we oppose it." Prime Minister Mark Carney promised to bring in an income-tax cut by Canada Day. The Conservatives proposed a similar, but steeper, tax cut during the election campaign. It's rare, but not unheard of for the Official Opposition to back government legislation. Poilievre's Conservatives have done so in the past. WATCH | Carney talks government ambitions in exclusive interview: Carney talks U.S. relations, his government's ambitions in exclusive interview | Power & Politics 22 hours ago Duration 21:01 Prime Minister Mark Carney sat down for a wide-ranging one-on-one interview with CBC's Power & Politics host David Cochrane on Tuesday. Carney addressed Canada's current relationship with the U.S. along with the challenges ahead for his new government, including housing affordability and separatist sentiment in Alberta. Poilievre said the Liberals should go further with their income tax cut and other policies, but suggested he would support any tax cut that's on the table. "We will offer even better ideas in the future and as I said a few weeks ago, I'm encouraging the Liberals to steal my ideas because we have the best ideas," the Conservative leader said Wednesday. Included in Tuesday's throne speech was a Liberal pledge to remove the GST on homes under $1 million. Poilievre suggested the Liberals should go further on this policy as well. Poilievre called on the Liberals to present a budget this spring rather than waiting until the fall as is currently planned. WATCH | 'I'd love to be in there,' Poilievre says: 'I'd love to be in there,' Poilievre says about first question period 1 hour ago Duration 0:43 Conservative Leader Pierre Poilievre said from the foyer of the House of Commons that he'd 'never really been a spectator of the House' when asked how it felt to not have a seat at the start of Parliament. The Conservative leader's comments came just ahead of the first question period of this parliamentary session. Poilievre, who lost his seat during the last election, had to watch the proceedings from outside the chamber. "I'd love to be in there, it's a great place. I love the House of Commons. I love the excitement and the thrill. I've never really been a spectator of the House, but I'm going to work hard to earn the opportunity to do it again," he said when asked about missing the first question period. Poilievre is aiming to run in a byelection in the Alberta riding of Battle River-Crowfoot once it's called. That vote is expected to take place sometime this summer. NDP expects to be included in question period Tuesday also marked the first question period that the NDP was facing with its reduced caucus. The New Democrats only have seven seats, short of the required 12 required to be recognized as an official party under House of Commons rules. Being a recognized party includes a few perks, including a guaranteed number of questions during every question period. WATCH | Davies says NDP will ask questions every day: Interim NDP leader says party will get 7 questions a week 8 minutes ago Duration 0:32 Don Davies, interim leader of the New Democratic Party, says the Speaker has allocated the party seven questions a week and plans to ask 'at least one question every day, sometimes two.' Despite not having that official status, interim NDP leader Don Davies told reporters on Tuesday that his party is expecting to be allocated seven questions a week. "We're going to have at least one question every day — sometimes two — so we're going to be a regular feature of question period," Davies told reporters. Davies asked the last question during Wednesday's question period. The NDP has been negotiating with other parties to gain a larger role in the House despite its smaller caucus. One question still lingering is whether the NDP would be able to sit on House committees — something only reserved for recognized parties.
Telegraph
18 hours ago
- Business
- Telegraph
Earn over £200k? HMRC could be snooping on you
If you earn over £200,000, you may have had your finances snooped on by the taxman. High earners or those with over £2m in assets are defined as 'wealthy' by HM Revenue and Customs (HMRC). This means a specific team within HMRC is dedicated to ensuring these taxpayers pay the right amount. While the so-called 'wealthy' team has always existed, recently it has ramped up its investigations. According to a recent report by the National Audit Office (NAO), the tax office collected £5.2bn from the wealthy in 2023-24, up from £2.2bn in 2019-20. HMRC has said this tax would have been lost if not for its interventions. In 2023-24, 850,000 individuals – or 2pc of taxpayers – met HMRC's definition of 'wealthy'. Of these, 395,000 had an income of more than £200,000 while the remaining 455,000 had assets worth more than £2m. Around 2,500 taxpayers were worth over £100m.
Forbes
a day ago
- Business
- Forbes
Foreign Grantor Trusts, Section 679, And U.S. Taxes
IRS foreign grantor trust Grantor trusts are treated differently from other trusts for federal income tax purposes. Whereas many trusts are respected as separate entities, grantor trusts are disregarded with the grantor (or deemed owner) of the trust required to report the trust's tax items (e.g., income, deductions, credits, etc.). Generally, a trust is characterized as a grantor trust if the trust meets one or more of the requirements set forth in the grantor-trust rules (i.e., sections 671 through 679). Foreign trusts often qualify as grantor trusts under the grantor-trust rules. Indeed, section 679 of the Code specifically targets foreign trusts for this tax treatment if the trust has a U.S. transferor and U.S. beneficiaries. Where section 679 applies, the U.S. transferor is treated as the grantor of the trust, requiring the transferor to report the trust's income and other items on a tax return and corresponding international information returns such as IRS Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner. Because many tax professionals and taxpayers are unaware of the nuances of section 679, the provision often acts as a trap for the unwary. Prior to discussing section 679, it is important to understand the term 'foreign trust' as section 679 only applies to these types of trusts. Under federal tax law, a trust means an arrangement in which a trustee takes title to property for the purpose of protecting or conserving it for the benefit of third-party beneficiaries. To determine whether a foreign entity is a trust or another type of legal arrangement (e.g., a foreign corporation), taxpayers must analyze applicable foreign law against the backdrop of U.S. tax principles. If the arrangement constitutes a trust for U.S. tax purposes, the next inquiry is whether the trust is foreign. Generally, a trust is foreign if a U.S. court lacks the authority to exercise primary supervision over the trust or a U.S. person lacks the authority to control the decisions of the trust. All other trusts are considered domestic trusts and not subject to section 679. Section 679 applies if a U.S. person transfers property or cash to a foreign trust and the foreign trust has a U.S. beneficiary. For these purposes, U.S. persons and beneficiaries include U.S. citizens and residents. To qualify as a U.S. beneficiary of a foreign trust under section 679, the U.S. beneficiary must have rights to trust income or corpus. Therefore, a foreign trust has a U.S. beneficiary under section 679 if: (i) any part of the trust's income or corpus may be paid or accumulated during the tax year to or for the benefit of a U.S. person, or (ii) if the trust was terminated in the tax year, any part of the trust's income or corpus could be paid to or for the benefit of a U.S. person. Trust income and corpus is deemed accumulated even if the U.S. person's interest in the trust is contingent on future events. Generally, the trust's governing documents and applicable foreign law determine whether a U.S. beneficiary has rights in the income or corpus of a trust. However, section 679 recognizes that U.S. persons may enter into oral understandings concerning the trust's administration—accordingly, section 679(c)(5) provides that the IRS may look beyond the trust's written documents to determine whether there is a U.S. beneficiary. In some instances, foreign persons may establish a foreign trust and relocate to the U.S. Under section 679(a)(4), a foreign trust becomes subject to the section 679 grantor-trust rules if a nonresident alien individual transfers property or cash to a foreign trust and becomes a U.S. resident within five years of the transfer date (assuming the foreign trust also has a U.S. beneficiary). A nonresident alien individual's starting date for these purposes is governed under section 7701(b)(2)(A). For example, an individual who becomes a lawful permanent resident (e.g., a green-card holder) and who does not meet the substantial presence test in that tax year has a starting residency date based on that person's first day present as a lawful permanent resident. If the individual satisfies the substantial presence test, the starting residency date is the first day in which the individual was physically present in the U.S. Section 679 also provides a special rule for domestic trusts that are later treated as foreign trusts. Under this rule, section 679 applies if a U.S. citizen or resident transfers property to a domestic trust and the trust becomes a foreign trust during that person's lifetime. Where this rule applies, the U.S. person is deemed to make a transfer of property to the foreign trust as of the date the trust becomes foreign. Notably, section 679(d) contains a provision that presumes that a foreign trust has U.S. beneficiaries (i.e., that it falls within the scope of section 679). Therefore, if a U.S. person transfers property or cash to a foreign trust, the IRS may treat the trust as having U.S. beneficiaries unless the person: (i) submits any requested information to the IRS, and (ii) demonstrates to the satisfaction of the IRS that the trust does not have U.S. beneficiaries. Foreign trusts often hold investments and other income-producing properties. Although foreign trusts are often not subject to U.S. income tax, they become subject to such taxes when section 679 applies. In these instances, the U.S. transferor must report the foreign trust's income under the grantor-trust rules. In addition, the U.S. transferor must often prepare and file substitute IRS Forms 3520-A on behalf of the trust to report the trust's activities to the IRS. The failure to understand the broad scope of section 679 can result in adverse U.S. tax consequences, including required payment of prior year income taxes, interest, and significant penalties.
ABC News
2 days ago
- Business
- ABC News
ATO warns millions of Aussies claiming work-related tax deductions
Australians are being warned by the Australian Taxation Office (ATO) to stop claiming private expenses as work-related or as donations on their tax returns.
ABC News
2 days ago
- Automotive
- ABC News
Tax time 2025: ATO warns millions of Aussies claiming work-related tax deductions
Australians are being warned by the Australian Taxation Office (ATO) to stop claiming private expenses as work-related or as donations on their tax returns. About 9 million Australians claimed about $28 billion worth of work-related expenses in their 2023-24 tax returns (as of 31 March 2025), many relating to working from home. The average claim made by taxpayers was about $3,000. But assistant commissioner Rob Thomson says the ATO has recently identified some dodgy claims that the agency has rejected. "We do see some funny claims — we had someone this year who tried to claim their engagement ring as a donation on the tax return," he told ABC News. "We had a company director claim the treadmill, juicer, coffee machine, their gaming console and a bunch of other stuff as working-from-home expenses. "Now on both of those [claims], they're private in nature and you can't claim them on your tax return. "So we are just reminding people that if they are making a work-related expense to follow the three golden rules — you need to have paid for it yourself, it directly needs to relate to the income that you're earning, and that it can't be private in nature." Car expenses: $10.3 billion, 3.6 million Travel expenses: $2.5 billion, 1.5 million Clothing: $2.2 billion, 6.5 million Self-education: $1.8 billion, 1 million Other: $10.8 billion, 7.9 million Total: $27.6 billion, 9.2 million (Source: ATO, data to March 31, 2025) Car-related travel made up the bulk of work-related expense claims. In 2023-24, 3.6 million people claimed about $10.3 billion in car expenses. Mr Thomson says there are two methods that people can use to make car travel claims, but urges people not to "double dip" by claiming the same items. There's the "logbook method", which requires taxpayers to keep a logbook for 12 weeks of the income year, which is a representative sample of their typical work pattern. The logbook method includes a deduction of a percentage of a taxpayer's car expenses, including fuel, maintenance, and registration, unlike the "cents per kilometre" method, which only allows people to claim a set rate. The set rate is 88 cents per kilometre for 2024-25 (in 2023-24 it was 85 cents per kilometre), and allows people to claim a maximum of 5,000 business kilometres per car, per year. Mr Thomson says while the cents per kilometre method doesn't require written evidence to show exactly how many kilometres you travelled, the ATO may still ask people to show how they worked out their business kilometres, for example, via diary records. "Now, that's an all-inclusive method, so that includes all your motor vehicle expenses, including rego and insurance, but what we do see is people still (incorrectly) claiming those expenses separately on the tax return," he said. About 4 million Australians claimed expenses for working from home last financial year. Mr Thomson says there are two methods for claiming expenses related to working from home — the "fixed cost" or "actual cost" method. The fixed-cost method allows people to claim a fixed amount of 70 cents per hour for every hour they work from home in 2024-25. (Note, the rate for the previous financial year was 67 cents per work hour.) The fixed-rate method is not as onerous as it doesn't require people to apportion expenses between private and work. But it restricts them from claiming each expense — such as mobile and internet, or electricity and gas, or home office stationary — separately. Under the actual cost method, taxpayers can claim each expense they have for working from home separately. It may be worth checking with an accountant if it will result in a bigger tax deduction. However, Mr Thomson notes that the actual-cost method is more complicated. He says it requires more detailed record keeping since people need to apportion what's private and what's work-related. In their 2023-24 tax returns, 1.7 million individual investors claimed rental tax deductions. This resulted in an average net rental loss of $1,800 down from an average net gain of $100 the year before. Mr Thomson says common mistakes are people claiming private loans as investment loans. "People will be using a mixed loan — they'll use part of it for their investment property and part for a private purpose, such as going on a holiday (or) buying a car," Mr Thomson said. "We are just reminding people that they can only claim the interest related to the income they generate from the [investment] property. "And they need to do that for the life of the loan, just not once they've paid off the capital that might have related to the car they purchased." He says they've also seen a case of someone trying to claim expenses for a property manager when they didn't use one. "So obviously you have to incur the expense to be able to claim it," he said. About 400,000 people bought or sold cryptocurrencies last financial year. The ATO is currently updating this data. Mr Thomson says many Australians don't keep any records when it comes to cryptocurrencies. "Now for most investors that is a capital gain or a capital loss. "But just a reminder to keep good records both when you're purchasing the crypto and then when you sell it." The ATO continues to use data matching and analytics to catch tax cheats. It uses income data from banks, state revenue offices, land titles offices, motor vehicle registries, insurance companies, share registries, ASIC, PayPal, eBay, Uber, Airbnb and crypto asset exchanges. This information allows the ATO to pre-fill tax returns and ensure taxpayers correctly declare their income. It also allows the agency to identify cases of fraud. In relation to 2024 lodgements, more than 584,000 individual tax returns were adjusted in its data matching programs and advanced analytical models before issuing tax assessments. This includes adding omitted income, removing overstated deductions and tax credits, and correcting apparent discrepancies. Mr Thomson also urges taxpayers not to lodge their returns too early to allow the ATO to get all the information required to pre-fill tax returns.
