New labels in the 2019 SMSF annual return
The SMSF annual return for 2019 has a number of new questions and labels that SMSF practitioners and trustees need to be aware of.
In previous years, the ATO advised trustees that the question in the annual return regarding whether Part B of the audit report was qualified could be answered with a “no” if the only reason the auditor qualified Part B was because they could not confirm the information provided to them (for example, opening account balances).
The ATO advice for this year is that this is no longer the case, and that trustees’ answers must correctly convey the auditor’s written opinion. […]
Main residence CGT exemption when there is no “residence”
There is a concession in the CGT rules that can allow a taxpayer to treat a property as their “main residence” even though it does not yet have a habitable dwelling.
It is a widely recognised fact that an exemption to capital gains tax (CGT) applies to a taxpayer’s principal or main residential property. What is less well known is that the period when this main residence CGT exemption applies can be extended to cover the time it takes to finish construction (or complete repairs to) of the physical residence on the property.
So even if there is no actual dwelling on a block, the vacant land can start to be treated as a taxpayer’s “main residence”. This is commonly referred to as the “building concession” or sometimes the “four year rule” for reasons that are outlined below. […]
EOFY last-minute tax planning tactics for individuals
This financial year is almost over, but there are still tactics you may be able to employ to make sure you pay the right amount of tax for the 2018-19 year. While the best strategies are adopted in July (that is, as early as possible in a financial year and not at the end), it’s worth remembering proper tax planning is more than just sourcing bigger and better deductions. The best tips involve assessing your current circumstances and planning your associated income and deductions.
Not all of the following tips will suit your specific situation, but should provide a list of possibilities that may get you thinking along the right track. […]
When are digital products ‘connected with Australia’ for GST purposes?
With the purchase of digital products such as the streaming or downloading of movies, apps, and e-books and so on becoming exponentially more popular, it is timely to examine the recently-introduced law that applies GST to digital products and services imported by Australian consumers.
Effective 1 July 2017, GST now applies to digital products and other services imported by Australian consumers. Affected supplies that are caught by the new law include not only the streaming or downloading of movies, music, apps, games, e-books, online supplies of software, digital trade journal/magazine subscriptions and other digital products, but also offshore services such as website design, publishing services, consultancy and professional services (such as legal advice, architectural services and so on). […]
The Treasurer Josh Frydenberg’s first budget has lots of goodies with few “baddies”. This was to be expected with the next federal election only weeks away and the Coalition Government trying to make up ground in the polls.
The Treasurer’s “wow” factor was a return to a budget surplus of $7.1 billion for the 2019-20 fiscal year.
Without increasing taxes, the Coalition Government, if re-elected, promises to deliver on a mix of benefits for a majority of taxpayers in Australia. These include:
Personal income tax cuts through adjusting upwards the thresholds at which the current tax rates apply (from 1 July 2022 to 30 June 2024) and then, finally, in the income year ending 30 June 2025, having only three rates of tax, with the highest marginal rate (45%) commencing at $200,000.
Increasing the Low and middle income tax offset to a maximum offset of $1,080 for the years ending 30 June 2019, 2020, 2021 and 2022.
Increasing the instant asset write-off threshold from $25,000 to $30,000 and extending this so that businesses with a turnover of between $50 million and $10 million can also access the concession. This will apply from Budget night until 30 June 2020.
Apart from the above, the budget was quite “light” on tax and superannuation changes. The government, no doubt, is trying to make itself a small target in relation to the coming election.
Also note that proposed changes to Division 7A will be deferred from 1 July 2019 to 1 July 2020, and that there are some useful changes to superannuation that will benefit older pre-retirees.
Remember that a fuel tax credit increase has just gone through
Fuel tax credit rates are indexed twice a year, in February and August, in line with the consumer price index (CPI). Also these rates change regularly, so it’s important to check when you are preparing for us to complete an activity statement for you.
See this ATO webpage for the rates that apply from 4 February to 30 June 2019. (Past rates are also displayed there, just scroll down.)
If you claim less than $10,000 in fuel tax credits each year, you can use any of the following simplified methods that best suits your needs. […]
From 1 July this year employers with 20 or more employees will report to the ATO in real time from their payroll software. The changeover to Single touch payroll (STP) is a gradual change, and some employers may start reporting later.
Employers will be able to see STP information they report through the ATO’s business portal, and this is expected to give them a better picture of their tax position. The ATO will be able to offer help and support earlier to those businesses that may be struggling to meet their tax obligations, such as offering payment plans. […]
SG on leave loading? Yes, and no — so it pays to check
An issue has surfaced in recent times that in some cases may require a change in the approach taken by some employers with regard to them being fully compliant with superannuation guarantee obligations. The problem for some may not be so much ducking the rules, but rather being in sore need of clarification on how the existing rules apply.
The accepted convention with regard to superannuation guarantee payments is that it is an amount calculated as a percentage of an employee’s salary or wages (9.5% at this stage, but increasing over coming years). […]