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First Home Super Saver Scheme

Posted on May 30, 2018 by admin


The First Home Super Saver (FHSS) is a scheme that enables Australians to save for their first home inside their superannuation fund. The plan allows for faster saving with the before tax (concessional) treatment within super. The 2017-18 Budget allowed individuals to make voluntary concessional and non-concessional payments into their super to save for their first home as of 1 July 2017. From 1 July 2018, individuals can apply to release their voluntary payments and associated earnings, to buy their first home. To apply for the release of these funds, individuals must be at least 18 years old and: – Never owned property in Australia (i.e., commercial or investment property, vacant land, a lease of land in Australia or a company title interest in land in Australia). – Never requested the Commissioner to grant a FHSS release authority in relation to the scheme in the past. An individual who has previously owned property in Australia may still be eligible if the Commissioner of Taxation finds they have suffered a financial hardship which resulted in losing ownership of a property. When the Commissioner determines that an individual has suffered a financial hardship, they must also satisfy additional criteria at the same […]


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Targeted amendments to Division 7A

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The Government is widening the scope of Division 7A to include unpaid present entitlements from 1 July 2019. This will apply where a related private company is entitled to a share of trust income as a beneficiary but has not been paid that amount (unpaid present entitlement). Division 7A is an integrity rule that requires benefits provided by private companies to taxpayers to be taxed as dividends unless they are structured as Division 7A complying loans or where another exception applies. The Government aims to clarify the operation of the Division 7A integrity rule to ensure the unpaid present entitlement is either required to be repaid to the private company over time as a complying loan or subject to tax as a dividend. Additionally, the targeted amendments announced in the 2016-17 Budget, aimed at improving the operation and administration of Division 7A, have now been delayed to commence from 1 July 2019. This will enable all the Division 7A amendments to be progressed as part of a consolidated package. From 1 July 2019, the following measures will be introduced: – A self-correction mechanism to assist taxpayers to rectify inadvertent breaches of Division 7A promptly. – Appropriate safe harbour rules to […]


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Claiming personal super contributions deductions

Posted on May 25, 2018 by admin


More taxpayers can now claim a personal super contributions deductions this tax time due to the removal of the 10 per cent maximum earnings condition that came into effect from 1 July 2017. Eligible individuals include those who earn their income from: Salary and wages A personal business (self-employment) Investments such as interest, dividends, rent and capital gains Government pensions or allowances Super Partnership or trust distributions A foreign source Those who wish to claim a deduction need to: Make personal after-tax super contributions directly to their super fund before 30 June 2018, if they have not already contributed this financial year Provide their fund with a ‘notice of intent to claim or vary a deduction for personal super contributions’ Obtain acknowledgement from their fund of their notice of intent before their 2018 tax return can be lodged.


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GST at settlement

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As of 1 July 2018, purchasers of new residential premises or potential land are required to withhold an amount from the contract price and pay the amount to the ATO before settlement. A supplier (vendor, seller) of residential premises or potential residential land must notify the purchaser in writing whether they will need to withhold an amount. If the purchaser is required to withhold, the supplier will need to inform them of the amount and when it needs to be paid to the Tax Office. Generally, if the property contract sale specifies an amount that is the price of the supply, i.e., the contract price, then the withholding amount is calculated on the contract price. However, there are some situations where the amount to be withheld must be calculated differently, including: – Where the margin scheme applies to the supply – The supply is between associates and is without consideration, or is for consideration that is less than the GST inclusive market value of the supply – There is a mixed supply, for example, only partly a supply of new residential premises or potential residential land – There are multiple purchasers (not joint tenants) Once the supplier lodges their BAS […]


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How the new super measures will apply to SMSFs

Posted on May 17, 2018 by admin


The Government has introduced new measures to allow SMSF members to access their super for their first home or make contributions to their super from the sale of downsizing their home. SMSFs should be aware of the following: Downsizing From 1 July 2018, SMSF members who are 65 or over and exchange a contract of sale of their main residence may be eligible to make a downsizer contribution of up to $300,000 into their super without affecting their total super balance or contributions cap for the year. This contribution will count towards the transfer balance cap and be taken into account for determining eligibility for the age pension. SMSF members do not have to purchase another home to access this measure. However, the contribution can only be made once; it cannot be used for the sale of a second main residence. The First Home Super Saver Scheme SMSF members looking to get into the property market can now use some help from their SMSF under the First Home Super Saver Scheme. As of 1 July 2018, SMSF members over 18 years of age can apply to release their voluntary concessional and non-concessional contributions made from 1 July 2017, along with […]


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Focus on work-related car expenses

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The Tax Office has flagged work-related car expenses as a concern this tax time. The ATO is targeting those who make mistakes or deliberately lodge false claims. Examples include: – Claiming things they are not entitled to, i.e., private trips such as work to home travel. – Making claims for trips that did not occur. – Claiming expenses that their employer has already reimbursed them for. Advancements in data-matching technology allow the ATO to match individuals with peers in similar occupations, earning similar amounts of income. Analytics is also used to identify claim patterns, i.e., over 800,000 people claimed exactly 5,000 kilometres under the cents per kilometre method last year. The best way to avoid making a mistake include: – only making a car claim if you paid for the expense yourself and were not reimbursed; – it was directly related to earning your income; and, – you must have a record to support the claim. An example of a legitimate car claim is travelling between work sites or between jobs as part of your job. Before you submit a car claim, consider if your employer would agree you needed to undertake the trips as part of your job. Employers […]


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Budget 2018: living stronger

Posted on May 9, 2018 by admin


The Government is focused on encouraging older Australians to better grow and secure their personal retirement funds. Retirees exempt from work test An exemption from the work test will be established to allow retired Australians aged between 65-74 who have total super balances below $300,000 in their first year that they do not meet the work test criteria, to make voluntary payments into their superannuation funds. Retirement income strategy Superannuation trustees will now be required to produce a retirement income strategy for their superannuation fund members. This is due to new amendments to the Superannuation Industry (Supervision) Act 1993. The Government is also set to revise the Corporations Act 2001 to ensure providers of retirement income products will supply standardised and simplified reporting to assist with more informed decision making. Pension Work Bonus Increase in funding to the Pension Work Bonus will mean that pensioners can now receive up to $300 per fortnight before their pension payments are affected. The Bonus will also cover self-employed individuals, who will be entitled to receive up to $7,800 per year without reducing their pension payments. Funding for older workers program Additional funding will be provided over four years to form the Skills Checkpoint […]


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Budget 2018: creating a level-playing field

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The Government will continue its commitment to strengthen the economy by focusing on improving its integrity measures to create a fairer level-playing field for all. Funding new ATO enforcement Additional funds will be allocated from the Budget over four years to fund a new ATO enforcement strategy to tackle the black economy. Through this measure, the ATO will implement new mobile strike teams, stricter auditing and a Black Economy Hotline for Australians to report black economy and illegal phoenix activities. Cash payment limit The Government will commence with a restriction on cash payments made to businesses for goods or services of up to $10,000 from 1 July 2019. Payments over $10,000 must be made via an online banking system or cheque unless payments are with financial institutions or consumer to consumer non-business transactions. No tax-deductibility for non-compliant payments From 1 July 2019, the Government is keeping a closer eye on those businesses that try to claim deductions for any payments made to their employees that do not comply with current regulations. Deductions for payments from a business to a contractor will also be disallowed if the contractor does not have an ABN and the business does not withhold any PAYG […]


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Budget 2018: living longer

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The Government is introducing a series of new measures designed to help Australians keep a greater portion of their superannuation savings pie. Insurance opt-in Insurance within super may not be suitable for everyone, particularly young people and those with low balances. From 1 July 2019, insurance will be offered on an opt-in basis for members with low balances of less than $6,000; members under the age of 25; and members who have not received a contribution in 13 months and are inactive. The changes intend to protect low balances from being entirely eroded and reduce incidences of duplicate cover. Reuniting lost super The ATO will have the ability to reunite all inactive superannuation accounts where the balances are below $6,000 with the member’s active account as of 1 July 2019. This will benefit those with inactive low balance accounts, i.e., low-income earners, young members and seasonal workers. Protecting your super The Government is banning exit fees on all super accounts to enable Australians to consolidate their super accounts on a more affordable basis. Additionally, a three per cent annual cap on passive fees charged by super funds on accounts with balances below $6,000 will protect those with low balance accounts […]


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Budget 2018: building resilience

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The 2018 Federal Budget is built on the back of a historically strong post-mining boom Australian economy, triggering fairly conservative changes to tax policy. The Budget’s strategy is to provide sustainable tax relief to those in the workforce, stimulating spending and encouraging businesses to invest in creating jobs. Individuals The Government is introducing a seven-year Personal Income Tax Plan to make tax lower, fairer and simpler. The plan is affordable and consistent. The first step is to lower taxes for low and middle-income earners, thereby increasing disposable incomes to help take the pressure off household budgets. From 1 July 2018, the Government will introduce the Low and Middle Income Tax Offset, a non-refundable tax offset of up to $530 per annum to Australian resident low and middle-income taxpayers. The second measure in the plan will tackle bracket creep. From 1 July 2018, the Government will increase the top threshold of the 32.5 per cent personal income tax bracket from $87,000 to $90,000. The top threshold of the 32.5 per cent personal income tax bracket will increase from $90,000 to $120,000 from 1 July 2022. The third phase of the Government’s Personal Income Tax Plan will simplify and flatten the personal […]


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Employer SuperStream checklist

December 7, 2018

Employers must make superannuation contributions on behalf of their employees. SuperStream is the ATO’s electronic and standardised solution that streamlines the super payment process.

Using SuperStream for employers means:

Obligations
You must make contributions to a super fund through a SuperStream solution unless you are eligible for the following exemptions:

Step-by-step guide
Once you have decided that SuperStream is right for you, the following steps will help you stay compliant: