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Who Has The Power To Make Your Financial Decisions?

Posted on June 6, 2022 by admin


As you grow older, your aim may be to live a long, happy and healthy life. This is hopefully with the mental capacity to make your own financial and lifestyle decisions, and the appropriate superannuation to fund it. But not everyone is always able to do this as they grow older. In the worst-case scenario, you may find yourself unable to make those choices yourself due to a diminished mental capacity (such as from mental deterioration, illness etc). If you can’t make your financial decisions, this could be bad. There is often a misconception that people who lose their capacity to make, for example, financial decisions will simply be able to have their partner or spouse step in to make those decisions on their behalf. This is not the case. Even if you are in a relationship with someone or own property jointly with them, they do not automatically have the power to make those financial decisions for you. This is where estate planning comes into play. An estate plan records what you want to be done with your assets after your death. It can include documents such as: your will a testamentary trust (as part of your will) superannuation […]


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How You Structure Your SMSF Could Impact The Trustees In The Fund

Posted on May 16, 2022 by admin


The way in which a self-managed super fund is structured could change its legal compliance requirements. If you are in the process of setting up an SMSF, you will need to make a decision about how to structure it appropriately to suit.  An SMSF can be structured as a single-member fund or a multiple-member fund, with the trustees of those funds deemed as either to be individual trustees or a corporate trustee Examining the circumstances of your members could help to narrow down the structure that will be best suited. You can also work out from the requirements of each structure whether or not a fund structure would be suitable for the needs of your members.  Individual Trustees Individual trustees in a single-member fund will have two trustees within the fund. One trustee must be the fund member, but cannot be the other trustee’s employee (unless they are also relatives). An example of a single member trust fund structure could be a family super fund, where the members are trustees for the fund. Individual trustees in a multiple-member fund structure generally have between two to six members. Each fund member must be a trustee and each trustee must be a […]


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The Benefits & The Downsides Of SMSF Set UP

Posted on April 25, 2022 by admin


One of the benefits of establishing or opting for an SMSF is due to the control they are given over where the money is invested. While this sounds enticing, the downside is that they involve a lot more time and effort as all investment is managed by the members/trustees. They are also often the targets of fraud and scams. Firstly, SMSFs require a lot of ongoing investment of time: Aside from the initial set-up, members need to continually research potential investments. It is important to create and follow an investment strategy that will help manage the SMSF – but this will need to be updated regularly depending on the performance of the SMSF. The accounting, record keeping and arranging of audits throughout the year and every year also need to be conducted up to par. Data shows that SMSF trustees spend an average of 8 hours per month managing their SMSFs. This adds up to more than 100 hours per year and demonstrates that compared to other superannuation methods, is a lot more time occupying. Secondly, there are set-up and maintenance costs of SMSFs such as tax advice, financial advice, legal advice and hiring an accredited auditor. These costs are […]


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Superannuation Changes To Affect Pensioners (And What You May Still Need To Take Into Account From Last Year’s Budget)

Posted on April 4, 2022 by admin


The Federal Budget was released last Tuesday, announcing key changes to taxation and business. For superannuation, the minimum pension drawdown amount was in the spotlight. The reduction in the minimum pension drawdown amount for superannuation pension recipients has been extended for another year by the Federal Government, as announced in the Budget for 2022-23. The minimum pension amount will be only 50% of the general amount (the balance from which the pension is drawn). For example, a 65-year old would usually need to draw down 5% of their opening balance as a pension payment throughout the year. For the 2022-23 financial year, the minimum amount will be reduced 50% (dropping this to 2.5%). This measure is set to cost the Federal Government around $19.2 million dollars for the 2022-23 years, but you need to be alert and conscientious about it. Why Is That? Whilst it is a great outcome to keep as much of your money in your super as is possible (if it’s not required for you to live on), you do need to be conscious that at some point, the remaining balance will be passed onto the next generation, potentially as a part of their inheritance. When this […]


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Why Keeping Money In Your Superannuation Needs To Consider Death Benefit Taxes

Posted on March 14, 2022 by admin


Most people will want to keep as much money in their superannuation account for as long as possible. One of the primary reasons behind this is that the longer the superannuation has a chance to stay within the account, the more returns may be seen (depending on how the investment assets are performing). Often, people will ask if they actually have to take their money out. The simple answer is no. You never have to take your own super out if you don’t want to. There are plenty of rules regarding keeping money in super (including the conditions and requirements to withdrawing, meeting preservation ages, etc). There are very few however that force you to take it out, and very rarely will you be forced to withdraw your superannuation if you do not want to. The only time your super must be paid out is following your death (which, technically, means that you won’t receive that money anyway, it will be your beneficiary/ies who will). The question though is whether or not you should leave your superannuation in there until you die. It comes down to who is receiving the money from your super. If the money is being paid […]


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Structured Settlement Contributions – What Are They And Why Should You Care?

Posted on February 21, 2022 by admin


Disasters, be they natural or man-made, can happen to anyone. It could be a car accident, a tree crashing through the roof, or a bushfire hitting your residence. In any case, an event that causes significant harm or impact that affects someone’s everyday life in an adverse way is never pleasant. Thankfully, as a society, there are laws that provide compensation to people who experience these accidents as a result of someone else’s actions and are significantly impacted. If someone were to be (potentially) disabled for life due to such an incident, there may be a substantial compensation payout. The idea of this compensation is not only to compensate for economic loss but to also provide a capital amount for the person’s living costs for the rest of their lives. Often that compensation will run to millions of dollars. Sounds like a lot, right? If you receive compensation for becoming totally and permanently disabled, investing this lump sum should make it last far longer. This action will require careful planning and professional advice. Consulting with a professional on this financial decision may be in your best interest. One effective strategy that can be used here is to make what is […]


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Common Mistakes Often Made By SMSF Trustees That You Can Avoid

Posted on January 31, 2022 by admin


Involvement in an SMSF can put certain responsibilities in their trustees hands, and those who overlook important details or find themselves reported to the ATO for failing to fulfil those responsibilities may risk incurring financial, civil or criminal penalties. As SMSFs often involve multiple members, the risk of non-compliance grows. You might be doing the right thing, but can you say the same thing about your fellow trustees? That is why the role of the trustee should not be taken lightly as with greater control comes greater responsibility, should the administration of your SMSF go awry. Make sure your retirement nest egg is protected by avoiding these common mistakes made by SMSF trustees. Breaching The Sole Purpose Test SMSFs must be maintained for the sole purpose of providing retirement benefits to your members (or for their dependents if a member dies before retirement). You will fail the test if a member gets any financial benefit through an investment, aside from increasing the return to your fund. For example, a member’s personal use of a holiday house purchased by the fund, without making rental repayments, would breach the sole purpose test. The rules can become complex, which is why seeking professional […]


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Maximising Your Super Should Be Done 10 Years Before Retirement For Best Results…

Posted on December 13, 2021 by admin


There are plenty of ways to maximise your superannuation contributions prior to your retirement at any time of your life. As the means of funding your nomadic lifestyle, your seachange or your downtime after retiring, you want to make sure your superannuation is equipped to handle it. The Australian Taxation Office recommends that you should check how you can maximise your super at the bare minimum of 10-15 years before the age that you hope to retire so that you have the time you need to make a difference to your final super balance. So, if you were thinking of retiring at your preservation age (which is the age that you can access your super), your superannuation should reflect the amount that you want to be able to access to fund that retirement. While starting earlier does mean it may be easier to accumulate what you need to retire by the time of it occurring, it doesn’t mean that there’s a cutoff date or a deadline to have contributions in for maximised profits. Here are 3 simple ways that you can make a difference to your superannuation fund which could impact your balance for retirement in the long-term(and the sooner […]


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How Do You Make Sure Your Super Goes To The Right Person When You Die?

Posted on November 22, 2021 by admin


What happens to your super when you die? It might not be a question that has cropped up in many people’s minds, but it is something that you should be concerned about. Upon the untimely death of someone, their superannuation may be one of the elements of the estate that can be bequeathed and divided between their loved ones (trustees of the estate and beneficiaries.  This is not done through your will though, as it isn’t automatically included unless specific instructions have been given to your super fund. Often this is done through a binding death benefit nomination. These payments are usually paid out in lump sum payments and split between beneficiaries as dictated by the deceased. However, like any property or asset that can be challenged, the death benefits from superannuation and SMSF can be a legal quandary if the appropriate succession planning measures have not been put into place. Death benefits are one of the most commonly occurring legal issues that plague the superannuation and SMSF sector for individuals. Many court cases involving death benefits are the result of poor succession planning, as individuals who were not stated to be recipients of the payments miss out on what […]


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Are You Suffering From Unpaid Super?

Posted on November 8, 2021 by admin


Australia’s superannuation laws are designed with the intent to ensure that your nest egg for retirement is protected and able to continue to grow throughout your career. Your employer is expected to make contributions to your superannuation by law, known as the Superannuation Guarantee, as a part of your wages and salary package. The current rate for the SG is 10% in 2021-22. Up to a quarter of Australian workers may have been underpaid or unpaid when it comes to parts of their super. During these turbulent times of financial insecurity or instability, many employers may have found it difficult to prioritise making SG contributions on your behalf. The reporting obligations and quarterly payment schedules could result in them not meeting their SG obligations in a timely fashion. There is a rising issue occurring from superannuation laws that employers may possibly be exploiting, which could significantly affect their employees’ retirement outcomes. The Government recently offered an amnesty to employers to catch up in their superannuation guarantee obligations but it appears that there are many that are still not complying with the rules. According to Industry Super Australia (ISA), underpaid and unpaid superannuation costs almost 3 million Australian workers an average […]


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Cash In Hand Compliance Concerns For Businesses & Individuals Alike

June 20, 2022

If your business earns a part of its income in cold, hard cash, be prepared to have the Australian Taxation Office’s eyes on you this tax time.

To protect honest, compliant Australian businesses, the Australian Taxation Office (ATO) has placed a strong emphasis on targeting the cash and hidden economy (known to be a part of the shadow economy).

For example, they may be keeping a close eye on a sole trader electrician, whose reported earnings over the financial year versus their actual spending isn’t adding up. Or perhaps you have a side hustle (such as freelancing or selling plants at the market), and earn some cash-in-hand alongside your full-time job’s income.

The ATO will be watching these businesses and individual traders that deal predominantly in cash, with a focus on those that:

When out visiting cash-only businesses, the ATO will be working in unison with local authorities and industry associations to ask questions and discuss:

If the ATO comes across a business that is doing the wrong thing or failing to meet its obligations, they have a duty to take action. This may result in the business facing an audit and possible prosecution.

Its imperative that you are fulfilling your obligations and know where you stand, particularly with;

If you do make a mistake upon completing your tax return but make a voluntary disclosure detailing your errors, the ATO will work with you to rectify this and create a solution.