Borrowing by superannuation funds under scrutiny

The final report of the Murray Financial System Inquiry (the Inquiry) was released on 7 December 2014. The Inquiry made 44 recommendations relating to the Australian financial system. The Inquiry identified two general themes where there is significant scope to improve the functioning of the financial system:

• funding the Australian economy; and
• competition

The Inquiry identified a number of distortions that impede the efficient market allocation of financial resources, including taxation, information imbalances and unnecessary regulation. Reducing the distortionary effects of taxation should lead the system to allocate savings (including foreign savings) more efficiently and price risk more accurately. The Inquiry has referred identified tax issues for consideration in the Tax White Paper.

SMSF borrowings – prohibition on LRBAs

The Inquiry recommended removing the exception to the general prohibition on direct borrowing for limited recourse borrowing arrangements (LRBAs) by superannuation funds. The report recommended that the current superannuation borrowing exception in s 67A of the SIS Act should be removed on a prospective basis. Importantly, superannuation funds with existing borrowings would be permitted to maintain those borrowings. However, funds disposing of assets purchased via direct borrowings would be required to extinguish any associated debt at the same time. Key points include the following:

• Since 24 September 2007, super funds have been allowed to borrow pursuant to a limited recourse borrowing arrangement (LRBA) that strictly complies with the requirements in s 67A and 67B of the SIS Act. The current provisions allow superannuation funds (especially SMSFs) to borrow directly, with the underlying asset quarantined in a holding trust arrangement.
• The Inquiry panel noted that the amount of money borrowed by superannuation funds using LRBAs has increased from $497 million in June 2009 to $8.7 billion in June 2014. While the limited recourse nature of these arrangements alleviates the risk of losses resulting in claims over other fund assets, the Inquiry argues that LRBAs still magnify the chances of large losses (either inside or outside the fund). According to the final report, further growth in superannuation funds’ direct borrowing would, over time, increase risk in the financial system. The report argues that the prohibition of LRBAs will help to “prevent the unnecessary build-up of risk in the superannuation system and the financial system more broadly”. In addition, the report claims that borrowing by superannuation funds transfers some of the downside risk to taxpayers, who underwrite the safety net provided through the age pension.
• When the interim report was released in July 2014, the SMSF Professionals’ Association of Australia (SPAA) argued that any changes to the use of borrowing by superannuation funds should target the “fringes” of the superannuation borrowing market and concentrate on inappropriate promotion of borrowing in superannuation funds. At the time, SPAA CEO Andrea Slattery said that the use of gearing by SMSFs was being done “sensibly” and only used by a very small percentage (0.5%) of SMSFs. According to Mrs Slattery, most loans made to SMSFs are being made with responsible lending practices. Banks have tighter lending policies and have experienced lower levels of default with this type of credit facility compared with loans made for other purposes, Mrs Slattery said.

Other recommendations made by the Inquiry

The Inquiry also made the following recommendations:

Income product

Require superannuation trustees to pre-select a comprehensive income product for members’ retirement. The product would commence on the member’s instruction, or the member may choose to take their benefits in another way. Impediments to product development should be removed.

Fund choice

Provide all employees with the ability to choose the fund into which their superannuation guarantee contributions are paid.

Competency of financial advice providers

Raise the competency of financial advice providers and introduce an enhanced register of advisers.

In the Inquiry’s view, the minimum standards for those advising on Tier 1 products should include the following:

• a relevant tertiary degree;
• competence in specialised areas, such as superannuation, where relevant; and
• ongoing professional development (including technical skills, relationship skills, compliance and ethical requirements) to complement the increased focus on standards of conduct and professionalism as recommended elsewhere in the report.

Although the Inquiry did not recommend a national exam for advisers, it said this could be considered if issues in adviser competency persist.

Register of advisers

The Inquiry supported the establishment of the enhanced register to facilitate consumer access to information about financial advisers’ experience and qualifications and improve transparency and competition. It suggested that further consideration could be given to adding other fields, such as determinations by the Financial Ombudsman Service (FOS). The register should be designed to take into account future developments in automated advice and record the entity responsible for providing such services.

Interests of financial firms and consumers

Better align the interests of financial firms with those of consumers by raising industry standards, enhancing the power to ban individuals from management and ensuring remuneration structures in life insurance and stockbroking do not affect the quality of financial advice.

Create new Financial Regulator Assessment Board

The report recommends creating a new Financial Regulator Assessment Board to advise the Government annually on how financial regulators have implemented their mandates.

“General advice” and ownership structures

The Inquiry recommended renaming “general advice” and requiring advisors and mortgage brokers to disclose ownership structures. The current regulatory framework addresses advice on financial products. The framework makes the following important distinction between personal and general advice:

• Personal advice takes account of a person’s needs, objectives or personal circumstances, whereas general advice does not.
• General advice includes guidance, advertising, and promotional and sales material highlighting the potential benefits of financial products. It comes with a disclaimer stating that it does not take a consumer’s personal circumstances into account.

However, the report says consumers may misinterpret or excessively rely on guidance, advertising, and promotional and sales material when it is described as “general advice”. The use of the word “advice” may cause consumers to believe the information is tailored to their needs. Behavioural economics literature and ASIC’s financial literacy and consumer research suggests that terminology affects consumer understanding and perceptions. Often consumers do not understand their financial adviser’s or mortgage broker’s association with product issuers.

The Inquiry believes greater transparency regarding the nature of advice and the ownership of advisers would help to build confidence and trust in the financial advice sector. In particular, the report said “general advice” should be replaced with a more appropriate, consumer-tested term to help reduce consumer misinterpretation and excessive reliance on this type of information. The Inquiry believes the benefits to consumers from clearer distinction and the reduced need for warnings outweigh any costs that would be involved.

Tax White Paper

The Inquiry identified a number of taxes that it said distorts the allocation of funding and risk in the economy. The Inquiry also identified other tax issues that may adversely affect outcomes in the financial system. Unless they are already under active Government consideration, the report said the tax issues it flagged should be considered as part of the Tax White Paper process. These include the following issues:

• In reviewing the taxation of contributions and investment earnings in superannuation, the Tax White Paper process should consider aligning the earnings tax rate across the accumulation and retirement phases.
• Tax concessions in the superannuation system are not well targeted to achieve provision of retirement incomes.
• The relatively unfavourable tax treatment of deposits and fixed-income securitiesmakes them less attractive as forms of savings and increases the cost of this type of funding.
• Negative gearing and CGT concessions:

–        Capital gains tax concessions for assets held longer than a year provide incentives to invest in assets for which anticipated capital gains are a larger component of returns. The report said reducing these concessions would lead to a more efficient allocation of funding in the economy.

–        For leveraged investments, the report said the asymmetric tax treatment of borrowing costs incurred in purchasing assets (and other expenses) and capital gains, can result in a tax subsidy by raising the after-tax return above the pre-tax return. Investors can deduct expenses against total income at the individual’s full marginal tax rate. However, for assets held longer than a year, nominal capital gains, when realised, are effectively taxed at half the marginal rate. All else being equal, the increase in the after-tax return is larger for individuals on higher marginal tax rates.

–        The report said tax treatment of investor housing, in particular, tends to encourage leveraged and speculative investment. Since the Wallis Inquiry, higher housing debt has been accompanied by lenders having a greater exposure to mortgages. Housing is a potential source of systemic risk for the financial system and the economy.

• The case for retaining dividend imputationis less clear than in the past. To the extent that dividend imputation distorts the allocation of funding, a lower company tax rate would likely reduce such distortions. The report said the benefits of dividend imputation, particularly in lowering the cost of capital, may have declined as Australia’s economy has become more open and connected to global capital markets. If global capital markets set the (risk-adjusted) cost of funding, then dividend imputation acts as a subsidy to domestic equity holders. That would create a bias for domestic investors, including superannuation funds, to invest in domestic equities. The report said imputation provides little benefit to non-residents that invest in Australian corporates.
• For non-residents, repatriated income from Australian investments is, in some cases, subject to withholding tax. The unequal tax treatment of repatriated income may affect the funding decisions of Australian entities and place Australia at a competitive disadvantage internationally. Lower, more uniform withholding tax rates would unwind these distortions.
• Simplifying the tax rules for Venture Capital Limited Partnerships (VCLPs) and streamlining Government administration of the regime would reduce barriers to fundraising.
• GSTis not levied on most financial services. This may contribute to the financial system being larger than it otherwise would be.

Consultation and comments

The Treasurer said the Government intends to consult with industry and consumers before making any decisions on the recommendations. Written submissions are being sought from all stakeholders, including industry and members of the public. As a number of recommendations are the responsibility of the financial regulators – APRA, ASIC and the RBA – those submissions will be made available to these agencies unless the submitter indicates otherwise.

Comments close on 31 March 2015 and should be sent to: Senior Adviser, Financial System and Services Division, The Treasury, Langton Crescent, Parkes ACT 2600; email: fsi@treasury.gov.au. For enquiries, please call David Crawford on (02) 6263 2757.

Source: Murray Financial System Inquiry Final Report, http://fsi.gov.au/publications/final-report.

Bitcoin and ATO approach to past transactions

The ATO has finalised a number of its rulings (a GST Ruling and several Income Tax Determinations) relating to the application of the tax laws for Bitcoin and similar crypto-currencies.

The ATO says all these rulings have application to tax periods before their date of issue (ie 17 December 2014) as they discuss laws that were already operative. However, the Tax Commissioner will not generally apply compliance resources to tax periods that started before 1 October 2014 for goods and services tax (GST), or 1 July 2014 for other tax issues, for taxpayers that can show they have made a genuine attempt to determine the tax treatment of Bitcoin and then adopted a consistent position regarding that tax treatment in those past tax periods.

Rulings

Details of the rulings are as follows:

TD 2014/25

Is Bitcoin a “foreign currency” for the purposes of Div 775 of the ITAA 1997?

The ATO view is that Bitcoin is not a “foreign currency” for the purposes of Div 775 of the ITAA 1997. The Determination states that the Commissioner’s view is that the current use and acceptance of Bitcoin in the community is not sufficiently widespread that it satisfies the test in Moss v Hancock [1899] 2QB 111, nor is it a generally accepted medium of exchange as per Travelex Ltd v FCT (2008) 71 ATR 216. Accordingly, the Determination indicates that Bitcoin does not satisfy the ordinary meaning of money. Since foreign currency is defined as a currency other than Australian currency, the Commissioner states that Bitcoin is not a foreign currency under Div 775 as it is not legally recognised as a unit of account and form of payment by the laws of any other sovereign country. The Determination was previously issued as Draft TD 2014/D11 and is the same.

TD 2014/26

Is Bitcoin a “CGT asset” for the purposes of s 108-5(1) of the ITAA 1997?

The ATO considers that Bitcoin holding rights amount to property and as such it is a “CGT asset” for the purposes of s 108-5(1) of the ITAA 1997. According to the Determination, the disposal of Bitcoin to a third party will usually give rise to CGT event A1 and taxpayers will be assessed on capital gains made. However, in circumstances where the Bitcoin is considered to be a personal use asset (ie kept for personal enjoyment or use) taxpayers may have access to s 118-10(3). The Determination was previously issued as Draft TD 2014/D12 and is the same.

TD 2014/27

Is Bitcoin trading stock for the purposes of s 70-10(1) of the ITAA 1997?

The ATO considers that when held for the purpose of sale or exchange in the ordinary course of a business, Bitcoin is trading stock for the purposes of s 70-10(1) of the ITAA 1997. The Determination states that this is evident from the context in John v FCT (1989) 20 ATR 1 (in which the definition of trading stock was considered) that the trading activity to which the definition applies involves the passing of a proprietary interest in the things traded. In addition, it is also clear from FCT v Sutton Motors (Chullora) Wholesale Pty Ltd (1985) 16 ATR 567 that intangible property such as shares are capable of being trading stock. The Determination was previously issued as Draft TD 2014/D13 and is the same.

TD 2014/28

FBT: is the provision of Bitcoin by an employer to an employee in respect of their employment a property fringe benefit for the purposes of s 136(1) of the FBTAA?

The ATO considers that the provision of Bitcoin by an employer to an employee in respect of their employment is a property fringe benefit for the purposes of s 136(1) of the FBTAA. The Determination states that Bitcoin is not tangible property for the purposes of the FBTAA nor is it real property, and Bitcoin holding rights are not a chose in action. However, it states that as the definition of intangible property includes “any other kind of property other than tangible property”, Bitcoin will fall within this definition. In addition, the Determination indicates that since Bitcoin is not money but is considered property for tax purposes, it satisfies the definition of a “non-cash benefit” and is excluded from PAYG withholding, which in turn means that it is not “salary or wages”. The Determination was previously issued as Draft TD 2014/D14 and is the same.

GSTR 2014/3

The GST implications of transactions involving Bitcoin

In this GST Ruling, the ATO considers whether Bitcoin is “money” as defined in s 195-1 of the GST Act and whether it is a “financial supply” under s 40-5(1) of the GST Act. The Ruling states that a transfer of Bitcoin is a “supply for GST purposes” as Bitcoin is not “money” for the purposes of the GST Act. It also states that a supply of Bitcoin is not a “financial supply” and therefore is not input taxed. Further, the Ruling indicates that a supply of Bitcoin is a taxable supply under s 9-5 if the other requirements are met and the supply of Bitcoin is not GST-free under Div 38 (eg as a supply to a non-resident for use outside Australia). It also states that a supply of Bitcoin in exchange for goods or services will be treated as a barter transaction. The Ruling states that Bitcoin is not goods and cannot be subject of a taxable importation under para 13-5(1)(a), however, an offshore supply of Bitcoin can be a taxable supply under the “reverse charge” rules in Div 84. In addition, it states an acquisition of Bitcoin will not give rise to input tax credits under Div 66 (ie input tax credits for certain acquisitions of second-hand goods), nor will it be a supply of a voucher under Div 100. The Ruling was previously issued as Draft GSTR 2014/D3 and contains changes. It includes eight examples outlining the various GST consequences of using Bitcoin in exchange for goods or services.

Updated ATO guidance paper

Following the release of the Taxation Determinations and GST Ruling listed above, the ATO updated its guidance paper entitled Tax treatment of crypto-currencies in Australia – specifically bitcoin. The ATO says that where other crypto-currencies have the same characteristics as Bitcoin, the information in its guidance paper applies equally to the taxation treatment for other crypto-currencies. The guidance covers issues such as: record-keeping required re Bitcoin; using Bitcoin to pay for personal transactions; mining Bitcoin; Bitcoin exchange transactions; and disposing of Bitcoin acquired for investment.

The guidance paper (dated 18 December 2014) is available on the ATO website at https://www.ato.gov.au/General/Gen/Tax-treatment-of-crypto-currencies-in-Australia—specifically-bitcoin.

Sources: TD 2014/25, http://law.ato.gov.au/pdf/pbr/td2014-025.pdf;
TD 2014/26, http://law.ato.gov.au/pdf/pbr/td2014-026.pdf;
TD 2014/27, http://law.ato.gov.au/pdf/pbr/td2014-027.pdf;
TD 2014/28, http://law.ato.gov.au/pdf/pbr/td2014-028.pdf;
GSTR 2014/3, http://law.ato.gov.au/atolaw/view.htm?DocID=GST/GSTR20143/NAT/ATO/00001.

Are your superannuation savings goals on track?

Superannuation should never be a “set and forget” strategy. With the new calendar year here, now is a good time to review circumstances and set some new goals to help boost retirement savings. There have been a few changes to superannuation, which applied from 1 July 2014. The following are some considerations.

Superannuation guarantee rate

On 1 July 2014, the super guarantee rate increased to 9.5% (up from 9.25% for 2013–2014).

Contributions caps

The general concessional contributions cap is $30,000 for 2014–2015 (up from $25,000 for 2013–2014).

Concessional cap for over 60s/50s

A higher concessional contributions cap of $35,000 applied for 2014–2015 for people aged 59 years or over on 30 June 2013, instead of the general concessional cap ($30,000 for 2014–2015). For 2014–2015, this temporary concessional cap of $35,000 also applied for those aged 49 years or over on 30 June 2014. This temporary $35,000 concessional cap (not indexed) will cease when the general cap reaches $35,000 through indexation (expected to be 1 July 2018).

Non-concessional contributions cap

This increased to $180,000 (or $540,000 every three years for those under age 65) from 2014–2015 (up from $150,000 for 2013–2014 or $450,000 over a three-year period).

Government co-contribution

A 50% matching applies whereby the Government will pay a co-contribution up to a maximum of $500 for a $1,000 eligible personal contribution for individuals with total incomes up to $34,488 for 2014-15 (phasing down for incomes up to $49,488).

Other considerations

Other issues to consider include the following:

• reviewing arrangements to salary sacrifice super with employers;
• protecting super accounts from identity crime (eg changing passwords for accounts that can be viewed online);
• consolidating multiple super fund accounts to save on super fund fees. However, there may be good reasons to maintain multiple accounts (these should be documented); and
• checking insurance and investment options to ensure they are still relevant.

Practitioners may want to also review the ATO’s Key superannuation rates and thresholds publication for more super issues to consider. The publication (last updated 8 December 2014) is available on the ATO website at https://www.ato.gov.au/Rates/Key-superannuation-rates-and-thresholds.

GST treatment of credit card surcharges – GSTR 2014/2

GST Ruling GSTR 2014/2 (issued on 17 December 2014) outlines the GST treatment of surcharges imposed on credit card transactions, surcharges imposed on debit card transactions, and fees payable for ATM services. It outlines the following GST treatment in relation to the services and transactions.

Credit card surcharge

The Ruling indicates that a credit card surcharge imposed by a merchant on a customer in respect of a credit card transaction forms part of the price for a supply of goods or services to the customer. The surcharge is part of the consideration payable by the customer for the supply of the goods or services made by the merchant, and where a surcharge is imposed on payment for more than one supply, the merchant can use any fair and reasonable method to apportion the surcharge.

In addition, the Ruling states that where an entity may act as an agent for a third party that supplies goods or services to the customer, but makes a separate supply to the customer of processing the transaction, the surcharge does not form part of the consideration for the supply of goods or services made by the third party. It also states that where a customer uses a credit card to satisfy an outstanding liability for a supply of goods or services and incurs a credit card surcharge, the surcharge is additional consideration for the supply of goods or services, and may cause an adjustment event.

According to the Ruling, where an amount is required to be paid by a specified date, and an additional fee or charge becomes payable if the amount is not paid by that date, the additional fee or charge is consideration for the supply of an interest in or under a credit arrangement. It is therefore consideration for an input taxed financial supply. It also states that where a customer incurs a credit card surcharge when paying for both the goods or services and the additional fee or charge under the credit arrangement, the merchant can use any fair and reasonable method to apportion the surcharge between the supplies.

The Ruling also states that a credit card surcharge imposed on a customer in respect of a credit card transaction used for a payment, or the discharging of a liability to make a payment, of an Australian tax or an Australian fee or charge subject to Div 81 has the same treatment as the underlying payment of the tax, fee or charge.

Debit card surcharge

According to the Ruling, a debit card surcharge imposed by the merchant on a customer in respect of a debit card transaction to pay for the supply of goods or services forms part of the price for the supply of the goods or services to the customer. It also states that where a customer uses a debit card to satisfy an outstanding liability for a supply of goods or services and incurs a debit card surcharge, the surcharge is additional consideration for the supply of goods or services, and may constitute an adjustment event.

The Ruling also outlines the following:

• a merchant that imposes a surcharge on a customer for withdrawing cash through a debit card transaction makes a taxable supply where the requirements of s 9-5 are satisfied. The merchant is supplying the customer with the service of accessing the relevant payment system through the use of the terminal to authorise the transaction.
• a fixed debit card surcharge imposed by a merchant on a customer in respect of a debit card transaction that includes both a supply of goods or services and a cash withdrawal forms part of the consideration for the underlying supply of the goods or services.

ATM services

The Ruling states that a fee imposed for an ATM service listed under subreg 40-5.09(4A) of the GST Regulations is consideration for an input taxed supply. However, a facility that is used to access a payment system other than the ATM system (ie EFTPOS) is not used to provide an ATM service under subreg 40-5.09(4A).

Changes from the Draft Ruling

The Ruling was previously issued as Draft GSTR 2014/D2 and contains changes. It includes 10 examples which considers various scenarios and outlines the GST treatment of the various scenarios.

Date of effect

This Ruling applies both before and after its date of issue.

ATO ID 2008/116 withdrawn

On 17 December 2014, the ATO withdrew ATO ID 2008/116 (GST and credit card surcharge for payment of an Australian tax, fee or charge). The ATO said the ID has been replaced by GSTR 2014/2 (see above). The withdrawn ID is available on the ATO Legal Database at http://law.ato.gov.au/atolaw/view.htm?docid=%22AID%2FAID2005203%2F00001%22.

Source: GST Ruling 2014/2, http://law.ato.gov.au/atolaw/view.htm?docid=%22GST%2FGSTR20142%2FNAT%2FATO%2F00001%22.

Tax Inspector’s proposed new complaint-handling powers

The Tax and Superannuation Laws Amendment (2014 Measures No 7) Bill 2014 was introduced in the House of Reps on 4 December 2014. It proposes to amend the Inspector-General of Taxation Act 2003 by transferring the tax investigative and complaint handling function of the Commonwealth Ombudsman to the Inspector-General of Taxation, and merging that function with the Inspector-General’s existing function of conducting systemic reviews. This provides taxpayers with a specialised complaint-handling process for taxation matters and aligns the systemic review role of the Inspector-General with the correlative powers and functions of the Ombudsman.

According to the Government, the Inspector-General is well-suited to have the sole jurisdiction to investigate individual complaints about the administration of taxation law matters, in addition to the current systemic function. It said that under the changes the Inspector-General will be given all of the powers and functions necessary to comprehensively investigate and handle complaints relating to the administration of taxation laws (of both a systemic and individual nature).

The Bill also proposes consequential amendments to the ITAA 1936 and the TAA. For example, key proposed amendments will allow the Inspector-General to request that a person making a complaint quote their TFN to facilitate the resolution of the matter with the ATO. The changes will also allow ATO officers to provide taxpayer-protected information to the Inspector-General for the purposes of investigating or reporting a matter. Consequential amendments are also proposed to the Tax Agent Services Act 2009 so that members and associated staff at the Tax Practitioners Board may also provide information to the Inspector-General for these purposes.

The amendments are proposed to commence the later of the fourteenth day after the Bill receives Royal Assent or 1 May 2015.

The regulations in the Ombudsman Act 1976 that provide for the payment of fees and allowances to persons for attending or appearing as witnesses will also apply as if they were regulations under the Inspector-General of Taxation Act. The Governor-General may still make regulations that provide for the payment of fees and allowances to persons for attending or appearing before the Inspector-General or a member of the Inspector-General’s staff.

The proposed amendments were announced in the 2014–2015 Federal Budget.

Other amendments

The Bill also makes the following amendments:

CGT exemption for compensation and insurance

Amends the ITAA 1997 to ensure that:

• a CGT exemption is available to certain trustees and beneficiaries who receive compensation or damages;
• a CGT exemption is available to trustees of complying superannuation entities for insurance policies relating to illness or injury; and
• the CGT primary code rule applies to capital gains and capital losses that are disregarded by complying superannuation entities, arising from injury and illness insurance policies, life insurance policies and annuity instruments.

Super excess non-concessional contributions – option to withdraw

Amends the ITAA 1997 and the TAA to make the taxation treatment of individuals with excess non-concessional superannuation contributions fairer.

Super fund mergers

Amends the ITAA 1997 to ensure that individuals whose superannuation benefits are involuntarily transferred from one superannuation plan to another, without their request or consent, are not disadvantaged through the transfer.

Proceeds of crime order – tax info disclosure

Amends the TAA to allow ATO officers to record or disclose protected information to support or enforce a proceeds of crime order. It also clarifies that all orders relating to unexplained wealth made under a state or territory law are included in the definition of “proceeds of crime order”.

Exploration development incentive

The amendments in the Bill, together with the Excess Exploration Credit Tax Bill 2014 (also introduced in the House of Reps on 4 December 2014), introduce an exploration development incentive by amending the ITAA 1997 and other tax legislation to provide a tax incentive to encourage investment in small mineral exploration companies undertaking greenfields mineral exploration in Australia.

Miscellaneous amendments

The Bill makes a number of miscellaneous amendments to the taxation and superannuation laws. The amendments include style changes, the repeal of redundant provisions, the correction of anomalous outcomes, and corrections to previous amending Acts.

Note the Bill will not be debated until after Parliament resumes on 9 February 2015.

Source: Tax and Superannuation Laws Amendment (2014 Measures No 7) Bill 2014, www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r5389

Important: Clients should not act solely on the basis of the material contained in Client Alert. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Client Alert is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.