PFA Member Profile: Abi Chellapen, Director – Tax, SW Accountants and Advisors
Abi is a Partner of SW Audit and a Director of SW Accountants & Advisors. She has over 17 years’ experience in providing tax advice and tax compliance services to a wide range of clients, but with particular emphasis on the funds management industry. Abi’s clients include a number of ASX listed and wholesale property funds, equity funds, debt funds, corporate entities and large complex private groups. Abi is also an active committee member of the Property Council of Australia’s state taxes committee.
Q. Is there anything from a tax perspective that’s currently a hot topic which impacts funds?
The VCAT decision in Oliver Hume Property Funds was an adverse outcome for property funds with assets in Victoria. The decision means investors acquiring an interest in a Fund through an IM, after the fund has entered into a contract to acquire property, may be subject to landholder duty. This effectively imposes double duty on the transaction. The case is currently on appeal.
Another significant topic of interest for property funds is the new federal thin capitalisation rules, effective from 1 July 2023. The thin capitalisation rules limit debt deductions for Australian funds controlled by foreign persons. The new thin cap regime replaces the safe harbour rules (asset-based) with a new test that limits net debt deductions to 30% of tax EBITDA (a fixed ratio test).
The new rules are potentially detrimental to property funds that borrow at the head entity level to fund equity investment in an underlying subsidiary trust, which acquires the property. In this structure, the head entity may potentially be denied all debt deductions under the new fixed ratio test. The Bill is currently with the Senate Economics Legislation committee. The industry is eagerly waiting to see if the rules will be amended to ensure a fairer outcome for property funds structured as described above.
Q. What drives you in your work?
I know tax sometimes isn’t the most exciting dinner time conversation, but it is an area that impacts everyone. The impact that tax has on businesses is significant and I feel fortunate to work in a space that is constantly changing. I am passionate about how these changes impact on my clients and how to best help them navigate through the challenges the Australian tax system throws at us!
Q. How do you measure the impact of ESG in your firm?
We have a number of high priorities on our agenda related to some core components, this includes authentic activities that our people are aligned to, which support the United Nations Sustainable Development Goals, and finding ways that engage with our clients and communities. Diversity, Equity and Inclusion (DEI) is another key imperative we are currently focused on, looking over our frameworks, processes and activities that support longer term strategic action. While we are not required to comply with Modern Slavery requirements, from an ethical standpoint, we developed a Voluntary Statement and are committed to a range of actions every two years to ensure we are on target with our commitments. This includes reviewing our supply networks and putting in place frameworks to support this as we continue to grow. We are also undertaking the development of our Reflect RAP and are using a range of methods to support our people in being able to learn more and reflect on what reconciliation means to them.
First and foremost, our CSR Committee, a sub-committee to the Board, is charged with the responsibility of progressing these strategic imperatives. On this basis, once some items are further progressed, the ESG measurements will be incorporated and relevant and appropriate measurements will be put in place. At all times, our focus as a firm is to ensure that what we are doing is authentic and not a ‘tick the box’ exercise.
Q. How has PFA membership been of value to you?
For me there’s been two aspects to the PFA membership that I have found most valuable. Firstly, the knowledge that the PFA provides/shares with its members regarding various topics – legal, valuations, insurance, ESG, industry trends and performance. I find it important to have a good understanding of the broader issues (beyond tax) that impact on my clients. Secondly, and probably more importantly, is the opportunity to network and build relationships with others in the property funds space. In recent times, the PFA has organised Women’s Networking Lunches that have proven to be a great way to build relationships with like-minded women in the property sector.
Q. What are you currently streaming?
I am currently watching The Good Doctor. It’s an old show, but one I missed when it was initially released. The main star of the show is an autistic doctor, Dr Shaun Murphy. One of the things I have found inspiring is that Shaun is always asking for advice from his mentors/colleagues as he is constantly trying to be a better doctor, better partner and a better friend. I think that is something we all should do more often. As we get older, we don’t put as much time and effort into growing and improving as a person, and this show was a reminder for me to focus on that again.
Q. Do you have a favourite holiday destination?
My favourite holiday destination is Spain. My husband and I went there for our honeymoon 14 years ago and, no surprise, it still holds as my favourite spot. Spain brings together great atmosphere, great food and amazing architecture.
Q. A great restaurant you would recommend?
One of my favourite restaurants is Pastuso in the famous AC/DC Lane in Melbourne. It has amazing Peruvian food that goes together with a very tasty pisco sour!
Q. What advice would you have for someone embarking on an accounting career in property?
It might seem obvious, but I think to enjoy a career in property it helps to be passionate about property. I have always loved buildings. I grew up going to residential development sites with my dad. So when I landed a job where property funds were a big focus, I felt pretty lucky.