Wealth Management

October 2021 Newsletter

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In this issue:

2021 has been, even more so than 2020, the year of working from home for so many of us – but what are the tax implications of using your home as a place of business? Turn to page 3 of our October newsletter to find out.

On the subject of homes, we also cover off what happens when multiple children inherit multiple rental properties – and how to solve the issue of co-owning a property with others. We’ve also got two articles on superannuation – our leading story examines the implications of compensation payments for super fund trustees, while on page 6 we outline the process for SMSFs having to use SuperStream from 1 October for certain contributions and rollovers.

Finally, October means that it’s almost that time of year again – Christmas, as your local supermarket will no doubt be reminding you soon – and our final story looks at the tax treatment of gifts and events in the workplace context.

‘Need to knows’ for October

  • The ATO is now closely reviewing arrangements where Australian resident taxpayers fail to declare foreign income and may conceal the character of the funds by disguising them as a purported “gift” or “loan” from a related overseas entity.
  • It’s also important to be aware of the CGT consequences of using part of your home as a place of business during the current pandemic – and the potential application of the CGT small business concessions to eliminate, reduce or roll-over any partial CGT liability that may arise.
  • In SMSF news, individuals who receive compensation payments from financial institutions and insurance providers may have the amount count towards their superannuation contribution caps, depending on the circumstances in which the payment is received.
  • Individuals can now recontribute amounts they withdrew under the ‘COVID-19 early release of superannuation program’ without them counting towards their non-concessional cap.

September 2021 Newsletter

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In this issue:

  • How to treat work-related travel and living away from home costs;
  • SMSFs and property development – emerging risks;
  • Claiming GST credits for employee reimbursements;
  • Buying a new house before selling the old one;
  • Trust distributions to non-residents;
  • and ‘Stapling super’ – reducing multiple accounts for employees.
  • Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

Need to knows’ for September

Legislation has been amended that makes NSW and Victorian government grant programs eligible for treatment as non-assessable, non-exempt income (NANE). This has important tax consequences as it means the amount is not only exempt and not assessable, but also not required to be used to reduce any existing tax losses of the taxpayer (unlike exempt income per se) – in a nutshell, it has a totally neutral effect on a taxpayer’s tax situation.

In a somewhat significant decision, the AAT has allowed a taxpayer’s objection against an adverse private ruling and found that he was carrying on “a business of renting properties” in relation to several rental properties he owned (and which he later transferred to his SMSF). Nevertheless, it’s unusual for a taxpayer to be found to be carrying on a business in relation to such activities, and the ATO (and courts) set a very high bar in order to be able to say that person is carrying on such a business.

In SMSF news, the ATO has released their final ruling (LCR 2021/2) on how a loss, outgoing or expense of a superannuation fund can cause a fund’s income to be taxed at ‘non-arm’s length income’ (i.e. taxed at 45%) where a superannuation fund and another party are not dealing at arm’s length. The ATO has also released a draft ruling (TR 2010/1DC) which proposes that any non-arm’s length income dealings are not considered superannuation contributions on the same transaction.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

August 2021 Newsletter

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In this issue:

  • With reforms to superannuation – including for SMSFs – on the horizon, our leading article covers what’s coming, including more accountability for funds and flexibility for super holders.
  • We’ve got two articles to help you understand how trusts work: ‘Trust distributions’ goes through the different roles involved in a trust, while ‘Trust losses’ explains what constitutes a family in the context of a family trust election.
  • If you’re one of Australia’s two-million-plus rental property investors, our article on capital works deductions is a must-read, and if you’re among the 90% of Aussies who participate in a rewards program, our final article clarifies some of the rules that apply to your points collection.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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March Newsletter 2021

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Government agencies sometimes use ABN registration to contact businesses for emergency help or even grants of support, so it’s important to keep your business’s ABN details current. And the perennial problem of dealing with cash flow gets some advisory help from the ATO.

A new Director Identification Number regime is something companies may need to get familiar with very soon, and we re-visit the changes that COVID-19 has made to FBT. There’s also details about the unstoppable SMSF sector, and the tax treatment of unexpected lump sums.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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February Newsletter 2021

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The JobMaker Hiring Credit scheme was passed into law in mid-November 2020. JobMaker was part of the 2020-21 Federal Budget, and will operate until 6 October 2021. It is designed to improve the prospects of young individuals getting employment, by incentivising employers to hire them, following the devastating impact of COVID-19 on the labour market.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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December Newsletter 2020

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The loss carry back measure introduced in the 2020 Federal Budget can be a very helpful COVID-recovery option. We run over the details. But if the COVID wash-up means you need to call time-out on your business, there are some important facts to know here as well.

We also look at interest deductions available for rental properties, a development in the CGT rules around active assets and vacant land, and a tightening of compliance in regard to SMSF audits.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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November Newsletter 2020

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Introduced with the Federal Budget, the “full expensing” 100% write-off of eligible business assets is a welcome measure that many business owners may want to take advantage of. Also, with the extension to the JobKeeper scheme, a set of alternative decline in turnover tests are now available, should a business not fit the general patterns of business activity.

We also look at property transactions and the payment of GST on settlement and remind taxpayers that although the ATO’s auditing activity had taken a back seat during the worst of the COVID-19 crisis, there is reason to expect that this will be taken up again very soon.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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2020 Federal Budget

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We all understand that budgets are an exercise in predicting the future. Given what has happened in 2020, gazing into the crystal ball and extracting something reliable is fraught with difficulty.

Extensions to the tax rate thresholds will give millions of taxpayers on lower incomes a much-needed boost after a very challenging year. The temporary full expensing of capital assets sets a new mark. Yet this benefit will be limited to those businesses that are back operating at a good capacity and do have enough capital to buy these assets. The willingness of banks to lend for this purpose will be critical.

Many businesses will seek to use the temporary loss carry-back measures that allow companies with turnover of up to $5 billion to offset losses against previous profits on which tax has been paid. Meanwhile, increasing the small business entity threshold from $10 million to $50 million is a significant and unexpected measure that will be beneficial to about 20,000 businesses.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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October Newsletter 2020

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The JobKeeper scheme has been extended, and there are some important changes that participants will need to know. In good news, the treatment of JobKeeper income has been clarified.

We also look at two further data matching programs that have been launched, smooth concerns some may have had over the easing of loan repayment demands due to COVID-19, and check on the state-by-state treatment of the electronic signing of official documents.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

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September Newsletter 2020

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Payments such as JobKeeper and the cash flow boost are measures welcomed by many, however, they can also bring with them some unique taxation issues. We run over what to look for.

Also tackled are claiming tax losses, where vehicles stand in relation to the boosted instant asset write off, the question of liquidity and trusts under COVID-19 conditions, and how SMSFs can best cope with the outcomes from rental relief support measures.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.


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