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SMSF’s and non-arm’s length income Posted on Jun 29, 2015 by editor

Super

Self-managed super funds and related parties must transact on arm’s length terms. This ensures that both parties are acting in their own self-interest and will not succumb to any pressure from the other party. The true market value of an asset should always be reflected in the purchase and sale price of assets. Members need to be aware of any income that can be classified as non-arm’s length to avoid being taxed at the highest marginal rate. A potential non-arm’s length hazard is a limited recourse borrowing arrangement (LRBA). Under an LRBA, a member can borrow money to purchase an […]

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Tax discount for unincorporated small businesses Posted on Jun 29, 2015 by editor

Tax

To drive small business growth, the Government’s 5 per cent tax discount for unincorporated small businesses with an annual turnover of less than $2 million will take effect from 1 July 2015. The discount will be capped at $1000 per individual for each income year and will be delivered as a tax credit in their tax return. It is expected to deliver a tax cut of $1.8 billion over the next four years. Individual taxpayers can still calculate their business income the same way and then add a 5 per cent discount on the income tax payable on the business […]

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SMSF’s under scrutiny for ‘loose’ loans Posted on Jun 22, 2015 by editor

Super

The ATO has reiterated it will be investigating self-managed super fund members who have an estimated $600 million in related-party loans for shares and property in their funds. Some members are taking out loans with a related party, which refers to friends, associates or family, on terms more favourable than what might have been attained from a bank. The tax office is concerned that these loans are not being made and maintained on a strict commercial basis and so, are breaching regulations. The ATO is willing to assist members who are caught up in such arrangements and resolve any issues. […]

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Last-minute tax tips for individuals Posted on Jun 22, 2015 by editor

Tax

With just over a week until June 30, here are some tips that can help savvy individuals make the most out of their tax refund for the 2014-15 year. The following tips are by no means exhaustive and may not be relevant to every personal situation. Keep your receipts The most important thing every individual taxpayer needs to know when it comes to claiming their tax is what expenses they can claim.  For most individuals, finding and organising receipts at tax time can be challenging and time-consuming. But, some of this stress can be avoided if they are mindful that […]

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ATO cracks down on high work-related deductions Posted on Jun 16, 2015 by editor

Tax

The ATO is closely scrutinising employees who make abnormally high work-related expense claims. The tax office is using advanced data and technology to identify and investigate claims that stand out from the usual. They are repeatedly targeting people who claim a tax deduction for using their computer, phone or other electronic devices to perform duties, transport bulky tools and equipment, or travel between work and home. If an employee has to use their computer, phone or other electronic devices for work purposes, they cannot claim a private usage portion. They must ensure they claim the correct amount and have evidence […]

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Revise your SMSF investment strategy Posted on Jun 15, 2015 by editor

Super

Self-managed super fund members should revise their strategy regularly to ensure it continues to reflect their circumstances and the fund’s investment objective. A self-managed super fund requires a clear, well-documented investment strategy to be successful. Characteristics of these SMSF investment strategies include: – ability to pay benefits when members retire. A member must be able to maintain their standard of living when they leave the workforce. – consider member needs and personal situations. The strategy takes on board the member’s age, their expected retirement date and identifies an appropriate investment option. – liquidity of the fund assets. It is crucial for […]

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CGT on property in deceased estates Posted on Jun 9, 2015 by editor

Tax

If you are appointed as an executor in a will, your responsibilities commence following the death of the will-maker. It is important for executors to consider the capital gains tax implications of a deceased estate when it is time to administer the estate property for its beneficiaries. There is generally no CGT payable for the transfer of an asset from the deceased’s name to a beneficiary or the executor. However, the asset will become liable for CGT when it is sold by the beneficiary or an executor. If the property was the deceased’s main residence, then the estate will have […]

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Self-managed super fund mistakes to avoid for EOFY Posted on Jun 1, 2015 by editor

Super

It is important for investors to have a good understanding of their SMSF to help reduce tax bills and maximise their wealth. To avoid being issued an SMSF audit by the ATO, investors should take the following advice on board: – Read the trust deed to gain a better understanding of how the fund works. – Have a regularly revised investment strategy, which takes into consideration liquidity, risk and return, diversification, meeting liabilities and insurance. – Update binding death nominations to ensure that trustees pay the income and capital of the trust to intended beneficiaries. – Utilise the transition-to-retirement pension […]

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ATO cracks down on holiday homes Posted on Jun 1, 2015 by editor

Tax

The ATO is targeting holiday-home owners who are over-claiming on tax deductions for periods when their property isn’t being leased. Some owners have been rejecting tenants so that their holiday home is available for them to use. They provide their accountants with authority to rent documents to make it appear that they are trying to rent the house. They then use the tax deduction to claim ongoing property maintenance costs to upkeep it for potential tenants. For example, an investor rented out their holiday home to friends and family at a lower-than-market rate and tried to claim a deduction. The […]

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