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SMSFs warned of risky retirement planning

Posted on November 22, 2017 by admin


The ATO is warning self-managed super fund (SMSF) trustees about the risks of some emerging retirement planning arrangements. Retirees or SMSF trustees who are involved in any illegal arrangement, even by accident, may face severe penalties, risk losing their retirement savings, and potentially, their rights as a trustee to manage their own fund. The Tax Office has released additional information through their Super Scheme Smart Program to help educate retirees and trustees of these complex tax avoidance schemes and arrangements. Super Scheme Smart provides case studies and information packs to ensure taxpayers are informed about illegal arrangements including what warning signs to look for and where to go for help. Many of the arrangements are cleverly designed to look legitimate, give a taxpayer a minimal or zero amount of tax or tax refund or concession, aim to give a present day tax benefit and involve a fair amount of paper shuffling. Some arrangements may be structured in a way which appears to satisfy certain regulatory rules, however, these arrangements are often ‘too good to be true’ and are in fact illegal. Among the ATO’s previous concerns about dividend stripping arrangements and contrived arrangements involving diversion of personal services income to […]


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ATO’s data matching programs

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The Australian Tax Office (ATO) has sophisticated data matching programs in place to ensure individuals and businesses are complying with their obligations and to uphold the integrity of the tax system for the community at large. The Tax Office uses data matching to pre-fill tax returns, ensure people and businesses are lodging tax returns and activity statements when required, correctly declaring their income and claiming offsets, and meeting their tax obligations. It helps to detect dishonest individuals and businesses operating outside the tax system, detect fraud against the Commonwealth and to recover debt. The following areas are currently under close scrutiny: Credit and debit cards The ATO obtains data from banks and financial institutions to identify the total credit and debit card payments received by Australian businesses. Specialised payment systems Data on electronic payments made through specialised payment systems to Australian businesses is analysed in conjunction with data collected through the credit and debit card data-matching program. Business transactions through payment systems Data is collected from organisations that process electronic payments for businesses in a report. Online selling Details of online sellers who sell goods and services to the value of $12,000 or more is attained. Data is obtained from […]


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SMSF annual return for pension phase trustees

Posted on November 15, 2017 by admin


Self-managed super fund (SMSF) trustees who are in pension phase must lodge their SMSF annual returns if they remain active, or choose to wind up the fund. The ATO is warning SMSF trustees about their regulatory obligations and is paying close attention to those SMSFs that are not meeting their lodgment obligations. Trustees must lodge a Self-managed superannuation fund annual return 2017 if it was a self-managed super fund on 30 June 2017, or a self-managed super fund that was wound up during 2016-17. Super funds that are not SMSFs at the end of 2016-17 must use the fund income tax return 2017 and, where required, a separate super member contributions statement. Even if your fund does not have a tax liability, your SMSF must lodge an SMSF annual return.


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Using the margin scheme for property sales

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Those selling property as part of a business sale may be eligible for the margin scheme. The margin scheme is a way of working out the GST you must pay on the property that you are selling as part of your business. The scheme is only applicable if the sale of a property is taxable. The GST on property sales is generally equal to one-eleventh of the sale price. If the margin scheme is used, the GST is calculated on the difference between the sale price and your purchase price of the property (or the property’s value on 1 July 2000 if it was acquired before that date). To meet the eligibility requirements you need to be registered for GST or required to be registered for GST. Contact our office to check your eligibility for the margin scheme when selling property as the application of GST to property-related transactions can be quite complex.


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SMSFs: Stats

Posted on November 10, 2017 by admin


The Australian Tax Office (ATO) has released its June 2017 quarterly SMSF statistical report detailing key SMSF figures. As of June 2017, the number of SMSFs increased to 596,516. The number of SMSF members in Australia is 1,124,453. The estimated value of total Australian and overseas SMSF assets is $696.7 billion. The number of annual wind-ups including both those initiated by trustees and those as a result of ATO compliance and cleansing activity was 1,419 as of June 2017. This is a significant decrease from 10,551 in June 2016. The top five asset types held by SMSFs by value include listed shares (30 per cent or $212,210m), cash and term deposits (23 per cent or $159,686m), non-residential real property (11 per cent or $74,772m), unlisted trusts (10 per cent or $71,455m) and other managed investments (5 per cent or $37,695m).


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Changes to GST on low-value imported goods

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Australian goods and services tax (GST) will be implemented on sales of low-value goods imported into Australia by consumers as of 1 July 2018. According to the ATO, business will have to register for GST, change GST on sales of low-value imported goods and lodge returns if they meet the $75,000 AUD registration threshold. These business includes merchants who sell goods, electronic distribution platform operators or re-delivers. Customs duty and clearance charges will be changed to the importer at the border under existing process should goods be imported in a consignment over the value of $1,000 AUD. Through the implementation of this new law, businesses will not: – Charge GST on a sale where GST is to be charged at the border. This occurs when an item is worth over $1,000 AUD or is a tobacco product or alcoholic beverage. – Need to charge GST where it is clear that multiple goods will be shipped in the one consignment coming to a value of over $1,000 AUD. In these instances, GST will be charged at the border instead. The ATO will be holding a number of international engagements on the application of Australian GST to low-value, imported goods sales throughout […]


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SMSF: Capital vs revenue expenses

Posted on November 1, 2017 by admin


Self-managed super funds (SMSFs) have access to a range of tax deductions for expenses incurred. Whether the expenses are capital in nature or are considered as revenue will affect eligibility for claiming such deductions. The Tax Office considers an expense that is incurred in establishing or making enduring changes to a super fund’s structure or function as capital and not deductible under the general deduction provision. For example, the costs of establishing an SMSF are capital in nature. An expense incurred in acquiring capital assets is also usually capital in nature. Trust deed amendment costs incurred in establishing a trust, executing a new deed for an existing fund and amending a deed to enlarge or significantly alter the scope of the trust’s activities are generally not deductible as they are capital in nature. If trust deed amendments are required to facilitate the ongoing operations of the super fund, they are generally deductible. For example, if a fund amends a trust deed to keep it up to date with changes in super legislation this would be deductible. Furthermore, expenses incurred in making changes to the internal organisation or day to day running of the fund are not considered to be capital […]


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ATO to focus on cash-only businesses

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To protect honest, compliant Australian businesses, the Australian Taxation Office has placed a strong emphasis on targeting the cash and hidden economy. The ATO is visiting businesses that deal predominantly in cash, with a focus on those that: Fail to meet super or employer obligations, and that fail to register for GST or lodge activity statements. Operate outside regular small business benchmarks specific to their industry. Show discrepancies between what they have reported and our collected data relating to electronic payments. Operate and advertise as cash only. Income does not correlate with the lifestyle of the business owner, i.e. assets and spending habits exceed what is expected of someone with their reported income. Are reported to the ATO by members of the community or any third party regarding potential tax evasion. Are part of an industry that is known for dealing primarily in cash only. When out visiting cash-only businesses, the ATO will be working in unison with local authorities and industry associations to asks questions and discuss: Why the business operates primarily or only in cash. The need to lodge tax returns and activity statements. How to be compliant in relation to tax and super obligations. Different claims and […]


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Authority for super complaints introduced

December 14, 2018

The new Australian Financial Complaints Authority (AFCA) will make it easier for individuals and small businesses to make complaints about their superannuation financial firms.

The Coalition government has responded to criticisms of previous dispute resolution bodies by creating a new financial disputes framework. AFCA has been described as a “one-stop shop” that will improve outcomes for consumers and increase the efficiency of the dispute resolution process.

AFCA’s jurisdiction
AFCA has been given authority over a range of complaint areas including:

What you can make complaints about
Your super complaint to AFCA must adhere to its governing rules. AFCA has specific time limits for complaints but no monetary limits.

You can make complaints about: