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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.


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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 […]


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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 […]


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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 […]


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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 […]


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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.


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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 […]


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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 […]


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Restoring damaged tax records after a natural disaster

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In the event that your records have been damaged or destroyed in a natural disaster, such as bushfires, there are a number of ways you can reconstruct them. The ATO is able to help with reconstruction in the event tax records have been lost or damaged. Where the tax records are lost or destroyed as a result of a natural disaster, the ATO will allow time for individuals to get their more pressing issues in order. They provide support by: Allowing lodgment deferrals of activity statements or tax returns without penalties. Allowing additional time to pay tax debts without incurring general interest charges. Making arrangements for tax payments to be done by instalments. Fast-tracking refunds. Arranging field visits to help with reconstructing tax records. The ATO holds and can re-issue or supply copies of tax documents, such as income tax returns, activity statements and notices of assessment. If you have lost your TFN, you can still access your tax information by phoning the ATO. If you are unable to substantiate claims made in your tax returns or activity statements because records have been damaged or destroyed, the ATO can accept the claim without substantiation, where it is not reasonably possible […]


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Updates to the unclaimed superannuation money protocol

Posted on January 15, 2020 by admin


The Superannuation (Unclaimed Money and Lost Members) Act 1999 (SUMLMA), more commonly known as the unclaimed superannuation money protocol, has been updated recently to provide a clearer structure going forward. SUMLMA provides guidance on in relation to unclaimed money, lost member accounts, superannuation accounts of former temporary residents and their associated reporting and payment obligations. The update has now added content on inactive low balance accounts. The act now clearly defines what is an inactive low-balance account, how statements and payments work, the registering of lost members and various rules for special cases. It is important to note that the information in the protocol does not apply to super providers that are trustees of a state or territory public sector super scheme, in which: The state or territory has laws requiring the reporting and payment of unclaimed super money to the state or territory government. Or; The state or territory public sector super scheme complies with relevant state or territory laws. The protocol provides administrative guidance only and should not be taken as a replacement for the law or technical reporting specifications.


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You can now opt-out of super guarantee as a high income earner

February 21, 2020

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:

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: