ATO provides further guidance on SMSF related party arrangements

The ATO has provided further guidance regarding limited recourse borrowing arrangements (LRBAs) and when non-arm’s length income (NALI) rules apply to a related party LRBA. The Tax Office recently released a Taxation Determination (TD 2016/16) and updated their Practical Compliance Guideline (PCG 2016/5/) to provide further clarification concerning the circumstances where a self-managed super fund…

Government passes ‘fairer’ super changes

The Australian Government has recently passed what it is calling the ‘most significant superannuation reforms in a decade’. The reforms include the introduction of a $1.6 million transfer balance cap, which places a limit on the amount an individual can transfer into the tax-free earnings retirement phase and the introduction of the Low Income Superannuation…

Succession planning for SMSFs

A mandatory component of managing a self-managed super fund (SMSF) is planning out what will happen to the fund if its trustee was to pass away. While succession planning may not be one of the first responsibilities that comes to mind when managing an SMSF, it is a necessity that can provide certainty and peace…

ATO crackdown on trusts

The ATO is currently targeting contrived trust arrangements that minimise tax by creating artificial differences between the taxable net income and distributable income of closely held trusts. Arrangements where trustees are engineering a reduction in trust income to improperly gain favourable tax breaks or pay no tax at all are being targeted by the Tax…

Income tests for tax offsets

Income tests are used to work out a person’s eligibility for tax offsets and benefits which can reduce the amount of tax they have to pay. The Australian Taxation Office considers various items from a person’s tax return when applying income tests. For example, a number of offsets, benefits and obligations are assessed using a…

Transition to retirement (TTR) changes

With the Federal Government’s proposed changes to the transition to retirement (TTR) pension to take effect from 1 July 2017, those with existing arrangements should review them to avoid any adverse impact on their retirement funds. Following changes in the 2016 Federal Budget, from 1 July 2017, transition to retirement (TTR) pensions will no longer…

Claiming tax offsets and rebates

Tax offsets (also known as ‘rebates’) can directly reduce the amount of tax payable on a person’s taxable income. While claiming certain tax offsets can reduce a person’s tax payable to zero, on their own, they cannot create a tax refund. Here are three common types of tax offsets some individuals are eligible to claim:…