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The benefits of a binding death nomination Posted on Jul 29, 2015 by editor

Super

Signing a binding death nomination can help your beneficiaries make the most of tax savings in super. A binding death nomination compels your super fund’s trustees to direct your super to the chosen dependent beneficiary upon your death. It also means your beneficiaries can receive any assets within the tax-effective structure of super. This is especially relevant for surviving spouses, so they can continue to receive tax-free income streams or superannuation payout upon death. Those who do not sign a binding death nomination will most likely have their super passed to the beneficiaries at your will’s direction, which can result […]

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Tax deductions misconceptions Posted on Jul 29, 2015 by editor

Tax

Wrongly claiming tax deductions can result in heavy penalties from the tax office. Despite this, many Australian taxpayers continue to attempt claiming invalid tax deductions that are rejected by the tax office. While some are not quite so obvious, below are some common misconceptions about deductions that many taxpayers believe. Driver’s licence: While claiming deductions for vehicle expenses such as repairs and servicing is allowed, claiming for the cost of a standard driving licence is not. Vaccinations: Vaccinations against the diseases an employee may be in contact with due to work are not tax deductible Childcare: Claiming deductions on the […]

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Splitting superannuation Posted on Jul 22, 2015 by editor

Super

When a marriage or de facto relationship breaks down, any property can be divided between the parties. Under the Family Law Act 1975, superannuation is also treated the same way. Parties must enter a superannuation agreement or obtain a court order to allow the splitting of their superannuation. A spouse may seek a court order when the parties cannot reach an agreement about how to split super. The trustee is obligated to pay an amount or a percentage of the member’s super to the non-member spouse, so it is essential for the non-member spouse to provide the trustee with advice […]

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Employee reimbursements and GST Posted on Jul 22, 2015 by editor

Tax

Business owners registered for GST may be able to claim GST credits for an employee-reimbursed expense. A reimbursement occurs when a business repays an employee for the price (or part of the price) of a purchase they have made. There are three conditions that an owner must meet in order to claim GST credits: the employee’s purchase must be taxable. the purchase is related to the employee’s work activities. the employee is not entitled to a GST credit for the expense. To substantiate the claim, the owner must also be able to provide the relevant receipts or tax invoices issued […]

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Avoiding SMSF death benefit disputes Posted on Jul 15, 2015 by editor

Super

Recent family disputes over superannuation death benefits carry an important warning to current SMSF trustees. The disputes have highlighted the need for trustees to have appropriate and binding death-benefit directions planned while members are still alive, in order to reduce the risk of a dispute arising. When there are clear death-benefit directions, surviving trustees have no choice but to comply with them. Small business owners who use a self-managed super fund can be particularly vulnerable to these types of disputes, especially those involved in a family business. This is because many small business owners hold their family business premises in […]

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Changes to the taxation of employee share schemes Posted on Jul 13, 2015 by editor

Tax

Changes to the tax treatment of employee share schemes, which took effect on 1 July 2015, means employees can now share in and gain from the future growth and success of a business. The changes allow employees, who are issued with share options, to defer paying tax until they are able to grasp a benefit from the options. The new 15-year tax deferral period gives employees enough time to cash in their shares and options while removing the risk of paying an unfunded tax liability. This was a reoccurring issue when the maximum period of tax deferral was seven years. […]

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Small business CGT concession common errors Posted on Jul 7, 2015 by editor

Tax

The ATO recently reported that small business owners were repeatedly making common mistakes when applying for capital gains tax (CGT) concessions eligibility tests. A taxpayer may qualify for the CGT concessions if they: – own a business with an annual aggregated turnover of less than $2 million; – are involved in a partnership that owns a CGT asset; – own active business assets that are used by an associated small business; – satisfy the maximum $6 million net asset value test; – satisfy the active asset test. This test requires the asset to be active for seven and a half […]

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Refund of excess non-concessional contributions Posted on Jul 7, 2015 by editor

Super

The Government recently made changes to excess non-concessional contributions, bringing the treatment of excess non-concessional contributions into line with the treatment of excess concessional contributions. The changes eliminate double taxation, where individuals were being taxed at the top marginal tax rate even though they paid income tax on contributions prior to making contributions to their fund. Members aged under 65 are allowed to contribute up to $180,000 each year to their super fund using after-tax funds known as non-concessional contributions. In addition, they can bring forward two years’ worth of contributions. However, they must not exceed a maximum of $540,000 worth […]

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