Becoming socially conscious of where you super invest
Posted on February 28, 2020 by admin
Whether you are a newcomer to the workforce or have been working full time for 30 years, you must have come across the concept of superannuation. Chances are, you’ve already been steadily building your retirement funds in one of the 500 Australian superannuation funds but are still unfamiliar with how exactly your super is being managed and where your super fund is investing your money in. With the beginning of a new decade and social issues on the rise, it is time to take a more conscious stance on what you are doing with your super and what causes you are supporting through the employment of your money through your super fund. A recent investigation into Australian super funds by the Australian Centre for Corporate Responsibility (ACCR), released in February 2020, found that 50 of the largest super funds in Australia are proxy voting against local climate-change initiatives. These organisations are instead approaching climate change from a global perspective, whilst ignoring more pressing domestic challenges to reduce carbon emissions.. The lack of support from Australian super funds for localised climate action is growing problematic, as Australia fails to address its appalling record on carbon emissions and is falling behind new-age […]
What’s tax-deductible for home businesses?
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Running your business from home can have great benefits, such as being able to spend more time with your family, not having to travel, and deciding your work hours. To make the most out of your home business experience, it is important to be aware of what tax deductions you can claim. If your home is also your principal place of business and you have a designated room space for business activities, then you are considered to be running your business from home. However, if you only do some business activities from home, then you may be considered to be working from home and the following tax implications don’t apply to you. You can claim deductions for your home business on expenses that you need to undertake work that produces income. Tax-deductible costs include: Utility expenses of the rooms you use for business. This can include electricity, water and gas bills that have been apportioned between business and private use. Work equipment such as computers and printers. For items costing up to $300, you can claim the full cost of the item. For equipment costing $300 or more, you can claim the decline in value. Cleaning and repairs for work […]
You can now opt-out of super guarantee as a high income earner
Posted on February 21, 2020 by admin
If you’ve unintentionally been going over your superannuation concessional contributions cap in past years, you may not have to worry about it from now on. As of 1 January 2020, eligible individuals with multiple jobs can apply to opt-out of receiving super guarantee (SG) from some of their employers. You may be eligible to apply if you: Have more than one employer. Expect that your employers’ mandatory concessional super contributions will exceed your concessional contributions cap for a financial year. Employees who are eligible can apply for the super guarantee shortfall exemption certificate when they complete the Super guarantee opt-out for high income earners with multiple employers form (NAT 75067). When you opt-out of SG contributions, you must still receive SGC from at least one employer. If other employers agree to use the SG exemption, then they may provide an alternative remuneration package instead, as to not be disadvantaged. However, the exemption certificate: Does not restrict the employer from making super contributions on behalf of the employee. Does not change the employer’s obligations or an employer’s agreement with their super fund. Cannot be varied or revoked once issued.
Taking a super pension
Posted on February 13, 2020 by admin
Once you have met your preservation age (between 55 and 60 depending on when you were born), you can choose to take a super pension. There are six main types of super pension: Account-based pension: this is the most common type of pension. It is a regular income stream bought with money from your super when you retire. Transition to retirement pension (TTR): you can use this pension if you have reached your preservation age but are below 65 years old and still working, Defined benefit fund: with this pension, you are paid a guaranteed income stream for life, however, it is not commonly used. Annuities: this is a series of payments you receive at fixed intervals for a defined period or the remainder of your life. Annuity payments are purchased with a lump sum. Reversionary pension: this is an income stream you set up with your superannuation that automatically reverts to someone else (generally your partner) when you die. Death benefit pension: this is where your dependents receive your death benefits as a pension when you die. This is only available from some super funds. The standard conditions of release for super pension withdrawals are: Retirement. Turning 65 years […]
Do you have to pay tax on super death benefits?
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When someone dies, their superannuation usually gets transferred to their beneficiary as superannuation death benefits. Depending on who the beneficiary is, the benefits may be taxed in some circumstances. If you are a beneficiary, the amount of tax you pay depends on factors such as: If the benefit is paid as a lump sum or pension. Your age and the age of the deceased at the time of their death (for income streams). Whether the benefit is paid from an untaxed superannuation scheme or a taxed scheme. Whether you’re a dependent for tax purposes. Someone who is tax-dependant will: A spouse of the deceased. An underage child of the deceased. Someone who was financially dependent on the deceased at the time of their death. Someone who was in an interdependency relationship of the deceased at the time of their death. Lump sum payments Lump sum super benefits paid to tax-dependant beneficiaries are not taxed, whereas those who are not tax-dependent will need to pay more tax and will only be able to receive the benefit as a lump sum. Not all super death benefits paid to a non-tax dependant are subject to tax. There are tax-free components that are made […]
When a trustee goes bankrupt…
Posted on February 6, 2020 by admin
SMSF members need to be aware of the rules that govern their fund, including what to do when one member becomes bankrupt. A requirement of an SMSF is that each individual trustee of the SMSF must be a member of the SMSF. In the case of corporate trustees, every member must be a director. This means all members are connected and held accountable for one another. If one member enters bankruptcy, they will be categorised by the ATO as a “disqualified person”, meaning they can no longer act as trustee of the SMSF. Where a disqualified person continues to act as an SMSF trustee or director, they will be committing an offence that is subject to criminal and civil penalties. The ATO provides a six-month grace period to allow a restructure of the SMSF so that it either meets the basic conditions required or can be rolled over into an industry fund. During the six-month grace period, the ATO requires: The bankrupt to remove themselves as trustee. The bankrupt to inform the ATO in writing. To be notified within 28 days if there is a change in trustee. The bankrupt to notify ASIC of the resignation as a director (if […]
Can you claim deductions for employee training?
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Employees of a small business may need to develop their expertise or skills in a particular area to better perform their duties. While training courses like seminars and one-day intensives can be a worthwhile investment, there are still a few things employers should consider from a tax point of view. Employers can generally claim deductions for the full costs incurred when providing education to employees, including aspects like course fees and travel costs. Paying for employee work-related course fees commonly constitutes a fringe benefit and is subject to FBT. However, FBT law allows a full or partial reduction of FBT payable provided that the ‘otherwise deductible’ rule is met. The ‘otherwise deductible rule’ implies that if the employee had paid the expense themselves, they could claim a deduction for the expense. The business could then provide the benefit to the employee without having to pay FBT on the amounts. An education expense is considered to be hypothetically deductible to the employee depending on the type of course or education studied. The course must have a satisfactory connection to an employee’s current employment, maintain or improve the skills or knowledge required for the employee’s current role, or result in an increase […]
New SMSF alert system
Posted on January 29, 2020 by admin
The ATO has introduced a new method of updating SMSF trustees of changes to their fund. From 3 February 2020, email and/or text message alert will be sent out when there are changes in the SMSF, such as; Financial institution account details. Electronic service address (ESA). Authorised contact. Members. If you receive an alert and are not aware of changes being made to your SMSF, you should contact the other trustees or directors of the corporate trustee of your SMSF and any other representatives authorised to make changes to your SMSF, such as your tax agent. The ATO messages will never ask you to reply by text or email or to provide personal information, such as your tax file number (TFN), your personal bank account number or BSB. The system was expected to start back in November 2019 but was delayed due to technical difficulties. The process has now been confirmed to be working as intended.
Tax implications of leasing commercial premises
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Leasing commercial premises, such as an office building, hotels or stores have their own struggles compared to being a residential landlord. Making the correct tax payment and knowing what you can and can’t claim is key in being a successful commercial landlord. When leasing out a commercial property, you must include the full amount of rent in you earn in your income tax return. You can claim deductions for expense related to renting out the property for the periods it is being rented or is available for rent, such as: Immediate deductions can generally be claimed for expenses relating to the management and maintenance of the property, including interest on loans. Expenses such as depreciation costs of assets and certain construction expenditure can be claimed over a number of years. Tax deductions cannot be claimed on: Acquisition and disposal costs of the premise. Expenses that you do not pay for, such as water and electricity costs that your tenants pay for. Expenses that are not actually used for the commercial property. As a commercial property landlord, you are liable for GST when your property is up for lease if you are registered, or required to be registered for GST. You […]
What happens to your super in a divorce?
Posted on January 22, 2020 by admin
Divorce or separation can be emotionally draining and stressful as it is, but the legal and financial responsibilities you also need to think about add an extra burden to dealing with the spit. One key area that needs to be considered to protect your financial future is your superannuation and what happens to it after your divorce. The superannuation splitting law treats superannuation as a different type of property. This means that like any other asset it can be divided between partners who were in a marriage or de facto relationships either through: A formal written agreement where both parties sign a certificate confirming that independent legal advice about the agreement has been provided. Seeking Consent Orders to split the superannuation. Seeking a court order to split the superannuation in the event you cannot reach an agreement. Splitting the super does not automatically give you a cash asset as it is still subject to superannuation laws. There are three main options for dealing with your super in a split: A payment split: this is the most common way of dealing with super at the end of a relationship. If you are not yet eligible to withdraw your super, the benefit […]
