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Super housing legislation

Posted on December 21, 2017 by admin

The First Home Super Saver (FHSS) Scheme and the downsizing contributions into superannuation measures passed Parliament on 13 December 2017. As of 1 July 2017, individuals can make voluntary concessional and non-concessional contributions into their super fund as part of the FHSS Scheme. The scheme may help first home buyers save faster due to the concessional tax treatment within super. From 1 July 2018, individuals can then apply to release their contributions, along with associated earnings, to help purchase their first home. The downsizing contributions into super measure allows individuals who are 65 years and over to make a contribution into their super after selling their home. Contributions of up to $300,000 from the proceeds of your main residence can be added into your super fund. Your spouse may also be able to make a contribution. To be eligible for a downsizer contribution, you must have entered into the contract of sale on or after 1 July 2018 and have owned the home for 10 years or more. Downsizer contributions will be taken into account for determining eligibility for the age pension.

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Earning income from the sharing economy

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The holiday season is a peak time for activities in the sharing economy to increase. During this time those participating in the sharing economy must not forget their tax obligations. The most common sharing economy activities around the festive season include: – Providing ride-sourcing services for a fare. – Completing jobs or errands for payment. – Renting out a room or a whole house or unit. – Renting out a vehicle or a car parking space. Depending on the activity, the tax obligations vary. The ATO is reminding those that participate in the sharing economy to consider the following: – declaring income in their tax return – what income tax deductions and GST credits they can claim for expenses related to earning income and what they can’t claim because of personal use – how all of their sharing economy earnings added together affect their income tax and GST obligations – keeping records of their income and expenses to meet their tax obligations

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Excess Transfer Balance Determinations from January 2018

Posted on December 15, 2017 by admin

The Australian Tax Office will start sending Excess Transfer Balance (ETB) Determinations from January 2018. ETB determinations will be sent to any individuals who have exceeded their transfer balance cap and have not taken any steps to correct this error. If you manage a SMSF and have exceeded the balance transfer cap by less than $100,000 on 1 July 2017 as a result of income streams in existence prior to 20 June 2017, you have until 31 December 2017 to commute the excess capital, under transitional rules. If you manage a SMSF and have exceeded the balance transfer cap by more than $100,000, under the transitional rules, you may receive the ETB determination. The ATO becomes aware of transitional balance cap breach based on information APRA funds pass on. If you receive an ETB determination from the ATO, remember the following: – The quicker the member rectifies the amount owing set out in the ETB Determination from the retirement phase, the lower the amount of excess transfer balance tax they will be required to pay. – The SMSF trustee must report information relevant to the member to the ATO, so that they have all the relevant information needed. It is […]

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Annual ATO closure

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The Australian Tax Office (ATO) will be closed from midday Friday 22 December 2017 to 8.00am Tuesday 2 January 2018 over the festive season. The Tax Agent Portal Dashboard and BAS Agent Portal Dashboard will be available to check portal availability. The ATO’s technical help desk will be available from 7.00am to 6.00pm weekdays, excluding public holidays and 10.00am to 4.00pm Saturdays to assist with technical log on, connection, firewall and VPN issues. The Tax Office will hold returns and forms not processed before the annual closure until processing resumes in the New Year. Lodgements made after 7 December may not issue until the New Year.

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ATO action on overdue SMSF annual returns

Posted on December 7, 2017 by admin

The Australian Tax Office (ATO) is cracking down on self-managed super funds (SMSFs) that have overdue SMSF annual returns, particularly those with two or more returns overdue. As part of its compliance action, the ATO is currently: – Cancelling approximately 9,000 ABNs of SMSFs that show no evidence of operating – Writing to SMSF trustees who are in pension phase to remind them that they still have a lodgment obligation – Continuing to focus on SMSFs with high levels of income and/or high-value assets who also have overdue returns – Taking further compliance and audit action on selected SMSFs – Visiting selected tax agents to obtain feedback on why their SMSF clients’ lodgments are overdue – Contacting tax agents by phone to obtain an agreed date for lodgment of overdue SMSF annual returns. SMSFs that do not meet the agreed lodgment timeframes will be subject to serious financial implications.

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Early payments

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Taxpayers are being reminded they can prepay amounts towards their expected tax bill to help stay on top of their tax and avoid falling into debt. To make a prepayment to the Tax Office, you must get the correct payment reference number, decide how much to pay and choose a payment method. Using the correct payment reference number is critical in ensuring the ATO credits the right account. The payment reference number can be found on a relevant notice or payment slip received from the ATO, or through the ATO portals. The ATO’s research shows keeping amounts for GST, super and income tax payments separate from other business affairs, i.e., in a separate bank account or by making a prepayment helps to stay on top of payments to the Tax Office.

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What disqualifies you from an SMSF

May 20, 2019

SMSF’s are regulated by the ATO and have specific eligibility criteria that members and trustees must follow. While anyone 18 years old or over can be a trustee or director of an SMSF, they mustn’t be under a legal disability, such as mental incapacity, or a disqualified person.

The ATO can render an SMSF trustee as a disqualified person if they see the need, particularly in relation to illegal early access breaches. There are other ways a person may become disqualified and some may not even realise they have been. Continuing to act as an SMSF trustee or director of the corporate trustee while disqualified is an offence, further penalties may apply.

A person is disqualified if they:

The ATO has a Disqualified trustees register to see if an individual has previously been disqualified. The register provides information and easy search options to help determine whether a potential trustee has been disqualified. It is updated quarterly and includes all individuals who have been disqualified since 2012 (when the information was first published electronically).