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Changes to SMSF 2017-18 annual return

Posted on June 15, 2018 by admin


There is a number of changes to the 2017-18 Self-managed super fund annual return (SAR) thanks to the super changes which came into effect on 1 July 2017. Transition to retirement income stream (TRIS) accountThe ATO has included a new label for the number of TRIS accounts an SMSF member has in accumulation phase. A TRIS account is in accumulation phase unless the SMSF member has reached 65 years of age or has met another ‘nil’ cashing restriction condition of release (i.e., permanent incapacity, retirement or a terminal medical condition) and has advised their fund. Limited recourse borrowing arrangements (LRBA)New questions focused on the use of LRBAs and extra borrowings have been added to section H, items 15e and 16. SMSFs that hold assets under LRBAs will be required to complete these questions. Correct calculation of a member’s total superannuation balance (TSB)New labels to allow the make-up of the ‘closing account balance’ to be reported to support a more efficient calculation of a member’s TSB have been added. The member’s TSB may affect their non-concessional contributions cap as well as other super caps from 30 June 2017. Cessation of the temporary budget repair levyCertain tax rates for superannuation entities have […]


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Importing goods worth $1,000 or less?

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Overseas businesses that meet the GST registration threshold (A$75,000) will be required to charge GST on goods purchased from the 1 July 2018. Specifically, GST will be charged on goods that are: less than A$1,000 (low-value); not GST-free (i.e., alcohol or tobacco products); and imported into Australia. Individuals who purchase low-value goods (which they import) will be required to pay GST if they are not registered for GST or importing goods for personal use (even if they are GST registered). However, individuals can avoid paying GST if they are: registered for GST; import low-value goods for business use in Australia; and provide their ABN to the supplier and a statement that they are GST registered. Individuals charged GST incorrectly will need to contact the supplier to advise them they are registered for GST, and need to request a refund.


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Superannuation Guarantee Amnesty

Posted on June 7, 2018 by admin


In a bid to tackle non-payment of employee superannuation, the Minister for Revenue and Financial Services announced the beginning of a 12-month Superannuation Guarantee Amnesty (the Amnesty) on 24 May 2018. The Amnesty provides employers with a one-off chance to self-correct past super guarantee (SG) non-compliance without incurring a penalty and is available until 23 May 2019 (subject to the passage of legislation). Employers who take advantage of the Amnesty will avoid: penalties and charges that may apply to late payments; and are entitled to deductions for catch-up payments made during the Amnesty period to the employee’s regulated super fund or to the ATO (should employers require a payment plan). To make use of the Amnesty, employers must: voluntarily admit the amounts of prior SG shortfalls including nominal interest during the Amnesty period; and not be the subject of an audit for SG for the relevant periods. The ATO is encouraging employers to pay their SG shortfall amounts in full, including the nominal interest straight into the employee’s super fund. Failure to either remain current with SG payment duties or declare SG shortfalls in this period could result in higher penalties later on.


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Preparing for tax time

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With the end of the financial year fast approaching, preparing ahead will help to take off the pressure of running your business and organising your tax affairs this tax season. Business owners can benefit from gathering and sorting their records now, including cash, EFTPOS, bank statements, credit or debit card transactions that relate to sales and other business income. Records of expenses that can be claimed as business deductions, such as operating expenses, business travel, staff wages and contractor expenses should also be compiled. For those who have changed over their record keeping software in the past year, now is a good time to check all the information has transferred over correctly. Sole traders are reminded to lodge an annual return even if their income is below the tax-free threshold. Those that lodge PAYG instalments would benefit from lodging activity statements and paying all PAYG instalments before lodging their return so their income tax assessment takes into account the instalments paid through the year.


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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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Changes to SMSF 2017-18 annual return

June 15, 2018

There is a number of changes to the 2017-18 Self-managed super fund annual return (SAR) thanks to the super changes which came into effect on 1 July 2017.

Transition to retirement income stream (TRIS) account
The ATO has included a new label for the number of TRIS accounts an SMSF member has in accumulation phase.

A TRIS account is in accumulation phase unless the SMSF member has reached 65 years of age or has met another ‘nil’ cashing restriction condition of release (i.e., permanent incapacity, retirement or a terminal medical condition) and has advised their fund.

Limited recourse borrowing arrangements (LRBA)
New questions focused on the use of LRBAs and extra borrowings have been added to section H, items 15e and 16. SMSFs that hold assets under LRBAs will be required to complete these questions.

Correct calculation of a member’s total superannuation balance (TSB)
New labels to allow the make-up of the ‘closing account balance’ to be reported to support a more efficient calculation of a member’s TSB have been added.

The member’s TSB may affect their non-concessional contributions cap as well as other super caps from 30 June 2017.

Cessation of the temporary budget repair levy
Certain tax rates for superannuation entities have been reduced in line with the cessation of the temporary budget repair levy (payable by some individuals for 2014-15, 2015-16 and 2016-17).

These rates affected those individuals that applied to the taxable income of non-complying superannuation funds (47 per cent to 45 per cent) as well as the non-arm’s length component of the taxable income of a super fund (47 per cent to 45 per cent).

CGT relief
A new label has been added to the capital gains tax (CGT) schedule for the purpose of reporting deferred notional gains where the gain has been realised.

Early stage venture capital limited partnership tax offset
The ATO has added a new label to enable SMSFs to report the amount of unused early stage venture capital tax offset carried forward from the previous year.