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Illegal super schemes Posted on Mar 31, 2016 by editor

Super

Australian taxpayers should be aware that some promoters claim to offer early access to super savings by transferring a person’s super into a self-managed super fund. These schemes are illegal and heavy penalties will apply to those who participate in such schemes. Generally, individuals cannot access their super until they retire or meet a condition of release. Some people promoting illegal super schemes will say that they can help access a person’s super now to pay off credit card debt, buy a house or car, or go on holiday. These schemes are illegal and may cost those who engage in […]

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Quarterly GST reporting Posted on Mar 31, 2016 by editor

Tax

Businesses with a GST turnover of less than $20 million who have not been asked by the ATO to report their GST on a monthly basis can report and pay their GST quarterly. Businesses who report and pay their GST quarterly have three reporting options: 1. Calculate and report GST quarterly This option allows businesses to calculate, report and pay their actual GST amounts quarterly. Businesses can use either the accounts method or the calculation worksheet method to work out their GST outlay. Business owners must report amounts at the following labels on their activity statement: total sales (G1) export […]

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The advantages and disadvantages of family SMSFs Posted on Mar 21, 2016 by editor

Super

Many small business owners who run a family business and are nearing retirement face the significant decision of whether to include their adult children in their self-managed super fund (SMSF) as part of their personal and business succession planning. Including children in a family SMSF can have a critical impact on family relationships and finances, especially if parents and adult children work together and share ownership of a family business. While potential benefits exist through well-planned intergenerational SMSFs, it is crucial for owners to compare the possible advantages and disadvantages of intergenerational SMSFs. Potential advantages Estate planning and business succession […]

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Preparing for the FBT year-end Posted on Mar 21, 2016 by editor

Tax

With the end of the fringe benefits tax (FBT) year fast approaching, business owners need to be aware of the FBT and gross up rates when preparing for their FBT return. The FBT rate increased from 47 per cent to 49 per cent from 1 April 2015. The rate increase was due to the introduction of the Temporary Budget Repair Levy imposed on individuals for a two year period (1 April 2015 to 31 March 2017). Consequently, the gross up rates were increased from 1 April 2015 to 2.1463 for Type 1 benefits (GST-creditable benefits), and 1.9608 for Type 2 […]

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Succession planning for SMSF trustees Posted on Mar 15, 2016 by editor

Super

A responsibility that does not immediately spring to mind when managing a self-managed super fund is working out what will happen if a member becomes incapacitated and unable to perform their trustee duties. Succession planning for an SMSF can become quite complicated if not managed on an ongoing basis. It not only requires having a plan; trustees also must stay in touch with Australian superannuation rules as time passes. Finding a replacement trustee can be difficult, and since appointing a replacement trustee, whether as an individual trustee or director of a corporate trustee, gives that person control over the super […]

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Avoiding CGT in your SMSF Posted on Mar 15, 2016 by editor

Tax

It may be beneficial for trustees who buy and sell assets through their self-managed super fund to start a transition to retirement pension to escape the burden of capital gains tax. Capital gains are profits that an SMSF makes on the sale of an asset. Capital gains tax (CGT) is a tax on the profits that a fund, or an individual, makes on the sale of an asset. According to the ATO, CGT refers to the income tax an SMSF pays on any net capital gain it makes e.g. when the fund sells an asset as part of a CGT […]

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No tax penalty when restructuring your business Posted on Mar 8, 2016 by editor

Tax

Federal Parliament recently passed legislation that will allow small businesses to change the legal structure of their enterprise without incurring a capital gains tax (CGT) liability. Instead, the CGT liability can be deferred until eventual disposal. The legislation, ‘Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016′, will apply from July 2016. It provides an optional rollover for small business owners who change the legal structure of their business when transferring assets from one entity to another. The effect of the rollover is the tax cost of the transferred asset/s is rolled over from the transferor to the transferee, providing […]

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Cutting down to the essentials Posted on Mar 8, 2016 by editor

Super

Self-managed super funds (SMSFs) are an attractive option for those who want more control over their retirement savings. However, trustees who have run a fund for as long as SMSFs have been in existence (around 20 years) are likely to have accumulated a lot of paperwork, especially if they engaged in various super strategies throughout the years. Since SMSFs have a statutory obligation to retain certain documents for certain lengths of time, it can be difficult to know what records trustees can afford to cull and continue to satisfy super rules. Another consideration is what information is necessary to provide […]

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Contributing a lump sum into super Posted on Mar 2, 2016 by editor

Super

Australians can make two types of contributions each year; concessional contributions, which are taxed at 15 per cent, and non-concessional contributions, which are not taxed. There is a limit of $35,000 for concessional contributions and $180,000 for non-concessional contributions. However, individuals do have the option of using the three-year bring forward rule that allows taxpayers to contribute a lump sum of $540,000 as a non-concessional contribution if they are under the age of 65. Using the three-year bring forward rule means individuals cannot make extra non-concessional contributions over the next two years. Individuals that have accumulated a large sum of […]

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Renting out a room can incur CGT Posted on Mar 2, 2016 by editor

Tax

A large number of Australians who rent out a room in their home, whether it be via Airbnb or another avenue, are unaware that the practice can incur capital gains tax (CGT). Many assume CGT is not on the cards because profit made from the family home (or ‘primary residence’) is usually tax-free. However, those who earn an income from a portion of the family home may inadvertently create a capital gain for the ATO to grab. Even though CGT is affected by events throughout a vendor’s ownership period, it is often calculated many years down the track, and unfortunately, […]

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