The Australian Tax Office has its sight set on an emerging tax avoidance tactic being taken up by a number of self-managed superannuation funds. The ATO has warned trustees not to use a strategy known as personal services income (PSI) through their SMSF to pay little or no tax. Even though only a handful of…
Changes announced in the 2016 Federal Budget will see the shutdown or conversion of tens of thousands of transition to retirement pensions (TTRPs) into full pensions. An estimated 550,000 TTRPs are currently in place around Australia, used mainly by taxpayers in their late 50s and early 60s who are reducing their work hours, or by…
Tougher superannuation rules may create an unintended spike in risky property borrowing by those with a self-managed super fund, with experts suggesting that the changes will force SMSFs to load up on debt in an attempt to increase returns. While there are still incentives for people to wanting to own property within their SMSF, under…
The Budget has made changes that reflect that the current superannuation system is at a kilter with individuals current lifestyles, with the introduction of more flexibility to address this. Concessional contributionsIndividuals under the age of 75 will now be able to claim tax deductions for personal superannuation contributions. From 1 July 2017, individuals can make…
The Budget has introduced a series of changes to superannuation tax arrangements that are intended to align superannuation with the purpose of providing income in retirement. The key elements of the superannuation changes include: Introducing a transfer balance cap There will be a $1.6 million superannuation transfer balance cap on the total amount of super…
The Government is now giving individuals a greater incentive to work without being taxed more by making a start to personal income tax relief. The changes will take place from 1 July 2016 and will prevent average full-time wage earners from moving into the second top tax bracket until 2019-2020, by increasing the 32.5 per…
The ATO has identified certain businesses it plans to target for potential tax audits. These businesses include the supermarket, bakery, computer system design and car retailing industries that often need more help to meet their tax and super obligations. In response to this, the ATO has begun an education campaign for business owners in these…
The ATO has issued a statement expressing its concern over recent misrepresentations of transition to retirement income streams (TRIS) and how they are meant to operate. In its statement, the ATO said that under special circumstances a member can select under regulation 995-1.03 of the Income Tax Assessment Regulations (ITAR) 1997 to treat a TRIS…
Most self-managed super fund trustees don’t give much thought as to how much professional indemnity (PI) insurance their advisor has. But since PI insurance is the only course of action to recover lost funds for trustees who become victims of fraud or negligence, it is an essential prerequisite trustees should be aware of. PI insurance…
The ATO has begun working with insurance companies to assess artworks and collectibles owned by taxpayers and identify the owners of these kinds of assets. There have been many instances where the tax office has identified ‘lifestyle assets’ that were not being properly accounted for. Since some assets may be subject to capital gains tax…