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Consolidating your super Posted on Apr 12, 2017 by editor

Super

Chances are, if you have had more than one job, you will most likely have multiple super accounts. Having multiple super accounts means more fees and less savings. Consolidating all your super accounts into one account can help you to keep track of your super, reduce unnecessary paperwork, and most importantly, save on costs. The first step in consolidating your super is selecting a fund to move all of your super savings into. When comparing funds, consider funds with lower fees; suitable investment options; extra benefits; funds which have performed well over the last 5 years; and provide appropriate insurance […]

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New measure to combat franked distributions funded by capital raisings Posted on Apr 12, 2017 by editor

Tax

The Government has announced a new measure in the 2016-17 Mid-Year Economic and Fiscal Outlook to prevent the distribution of franking credits where a distribution to shareholders is funded by particular capital raising activities. This new measure is intended to address issues raised by the Tax Office’s Taxpayer Alert 2015/2 regarding arrangements used by companies for the purpose of, or for purposes which include, releasing franking credits or streaming dividends to shareholders. The ATO have been reviewing arrangements with all or most of the following features: A company with a significant franking credit balance raises new capital from existing or […]

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Reviewing your trust deed before 30 June Posted on Apr 4, 2017 by editor

Super

With changes to Australia’s superannuation rules coming into play on 1 July 2017, self-managed super fund (SMSF) trustees would do well to review their fund’s trust deed. Despite the fact that maintaining an up-to-date trust deed is a vital aspect of managing a SMSF, many trustees fail to do so, usually due to the time and cost restraints associated. However, a SMSF trust deed can only ensure compliance and protect the trustee’s interests if it is regularly updated and reflects current superannuation rules. As part of the super reforms announced in last year’s Federal Budget, tighter superannuation rules will apply […]

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Lump sum payments received by healthcare practitioners Posted on Apr 4, 2017 by editor

Tax

The ATO has provided further guidance for healthcare practitioners dealing with lump sum payments from healthcare centre operators. The Tax Office is concerned with some practitioners who have received lump sum payments and have incorrectly treated the payments as a capital gain. These practitioners have then applied the small business CGT concessions to reduce the capital gain, in many instances reducing it to nil. The ATO has clarified that a lump sum payment from a healthcare centre operator is more likely to be ordinary income of the practitioner for providing services to their patients from the healthcare centre rather than […]

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Who is a ‘related party’ in an SMSF? Posted on Mar 29, 2017 by editor

Super

Self-managed super funds (SMSFs) have a number of investment restrictions which apply to transactions conducted within the fund. One such restriction applies to transactions involving ‘related parties’ of the fund and ‘relatives of members.’ No one associated with the SMSF should obtain a present-day benefit from the fund’s investments. The fund needs to meet the ‘sole purpose test’ of providing death or retirement benefits to the SMSF members or their dependents. A breach to the investment restrictions may result in significant penalties, such as the disqualification of a trustee and even prosecution. The Tax Office considers a ‘related party’ as: […]

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ATO to report unpaid debts to credit agencies Posted on Mar 29, 2017 by editor

Tax

The Mid-Year Economic and Fiscal Outlook 2016-17 (MYEFO) announced that from 1 July 2017, the ATO will disclose tax debt information of businesses who have not effectively engaged with the ATO to credit reporting bureaus. The new measure is aimed at enhancing the integrity of the tax system and ensuring businesses who are not compliant do not gain an unfair competitive advantage over those businesses who are. The ATO will initially pass on unpaid debts from businesses with an Australian Business Number and with a tax debt of more than $10,000 which is at least 90 days overdue. In addition, […]

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Investing on arm’s length Posted on Mar 23, 2017 by editor

Super

Running a self-managed super fund requires trustees to adhere to complex laws and follow a number of onerous rules. One of the most fundamental investment rules for SMSFs is that the trustees must transact on an arm’s length basis to ensure no conflict of interest arises. An arm’s length transaction requires trustees to conduct on a commercial basis as if there was no relationship between the parties. This means the purchase and sale price of fund assets should always reflect the true market value of the asset, and the income from the assets held by the fund should always reflect […]

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Preparing for the FBT year-end Posted on Mar 23, 2017 by editor

Tax

With the fringe benefits tax (FBT) year ending 31 March 2017, now is the time for business owners to get their FBT affairs sorted. When calculating FBT liability, employers must gross-up the taxable value of benefits provided to reflect the gross salary employees would need to earn at the highest marginal tax rate (including Medicare levy) to buy the benefits after paying tax. To calculate fringe benefits taxable amounts, employers must use two separate gross-up rates: Type 1: Higher gross-up rate is used where employers (or other benefit providers) are entitled to a GST credit for GST paid on benefits […]

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Transitional CGT relief for SMSFs Posted on Mar 14, 2017 by editor

Super

Self-managed super funds can access Capital Gains Tax (CGT) relief to provide temporary relief from certain capital gains that might arise as a result of individuals complying with the transfer balance cap, and Transition to Retirement Income Stream (TRIS) reforms, commencing on 1 July 2017. The transitional CGT relief is designed to preserve the income tax exemption for certain, accrued capital gains which would have been exempt, if the underlying CGT assets had been disposed of before the changed treatment of TRIS’s and before a member transfers to comply with the transfer balance cap starting. CGT relief is available for […]

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Easier GST reporting for food retailers Posted on Mar 14, 2017 by editor

Tax

Many small food retailers buy and sell products that are both taxable and GST-free. Depending on the point-of-sale equipment used, identifying and recording these sales can be difficult for business owners. The ATO has introduced a series of simplified accounting methods (SAMs) to make it easier to account for GST and work out the amount of GST that is liable at the end of each tax period. There are five SAMs to choose from. The SAM you choose will depend on your business’ turnover, the nature of your business and the nature of your point-of-sale equipment (except for the purchases […]

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