Sportspeople, media personalities, celebrities and ‘insta’ influencers beware. The ATO has taken a U-turn on how fame and image
should be taxed.
If
you’re famous and make an income from your fame and image, the way the ATO believes you should be taxed on the income you make may change
under a new draft determination set to take effect on 1 July 2023. It is not uncommon for celebrities to attempt to transfer the rights to
the use of their name, image, likeness, identity, reputation etc., to a related entity such as a company or trust.
This related entity then manages these rights, generating income from exploiting their fame and image. For example, where a media
personality’s image is used on product packaging. One of the aims of arrangements like this is to enable the income to taxed in the entity
at a lower rate of tax or to be distributed to related parties who might be subject to lower tax rates.
What will CHANGE?
The new draft determination (TD 2022/D3) deals
specifically with the rights to use a celebrity’s fame and image. The ATO’s argument is that the individual doesn’t have a
proprietary right in their fame, which means that attempting to transfer the right relating to their fame to another entity would not be
legally effective. That is, you cannot separate the fame from the individual, it vests with the individual regardless of any agreements put
in place.
As a result, any income relating to an individual’s fame or image that is received by a related entity is treated as if it was simply
being collected on behalf of the individual and should be taxed in the hands of that individual.
WEBINAR 11 SEPT // 12PM
The final session focuses on the changing legal environment, highlighting recent amendments to the Fair Work Act, capturing independent
contractors under workers' compensation schemes, payroll tax considerations, superannuation compliance, and practical steps to mitigate
risks.
WEBINAR 4 SEPT // 12PM
In the third session, we'll delve into superannuation guarantee changes, including proposed changes to payday superannuation, new rates and
bases, and the impact on SG liability. Gain insights into employer deductions, termination of employment considerations and more.
WEBINAR 28 AUG // 12PM
Master allowances and reimbursements, understand their PAYG and super guarantee implications, and learn to navigate travel vs.
living-away-from-home allowances. Gain insights into FBT considerations, new ATO record-keeping requirements, and effective salary packaging
arrangements.
Building on the findings from Xero Small Business Insights (XSBI) report, Small business productivity: Trends, implications and strategies, this special report presents industry and regional labour productivity data for small businesses.
The main residence exemption exempts your family home from capital gains tax (CGT) when you dispose of it.
