Blog

Valuations and your SMSF

12 March 2018

The days of a lax approach to valuations are over. While there is not always the need to employ a qualified independent valuer for each valuation, there are important circumstances where it is mandated, and others where it is recommended. Where one is not used then appropriate documentation needs to be kept of how valuations were determined. Back of the envelope or simply made-up valuations will not suffice.

Whilst in the old days the ATO had little it could do against SMSF trustees; the current penalty rules provide the ATO with much greater firepower. In particular, be careful in the valuation of assets for determination of whether a member is or is close to being in excess of the contribution rules. The ATO has signalled this is an area they will police in 2017/18.
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Is your business prepared for Single Touch Payroll?

12 March 2018

Single Touch Payroll is a government initiative to streamline business reporting obligations, which is due to become compulsory from 1 July 2018. When a business pays its employees, the payroll information will be sent to the ATO via the business’s payroll software.

Reporting under the Single Touch Payroll (STP) system removes the requirement to issue payment summaries, provide annual reports and tax file number declarations to the ATO. During the first year of its introduction, the ATO says employers will not be liable for a penalty for a late STP report.

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Saving up for your first home? This strategy may help.

First Home Super Scheme
12 February 2018

You can now use your super to save for a deposit on a home and potentially save some money – by using the First Home Saver Super Scheme (FHSSS).

This blog post by Matthew Reid, Senior Accountant at i2 advisory gives an introduction and example of using the FHSSS.

Welcome to our first i2 advisory blog starting this 2018 year. We will be looking to roll out these informal and light-reading blogs on a regular basis to share tips and insights into a number of matters that may impact your business, personal/family finances and potential tax savings.

For many of us millennials, this new year (apart from starting a bit hazy) may have begun with some fresh new goals in mind for the year ahead. If, like me, the goal to knuckle down and save for that all important home deposit is on your to-do list (of perhaps you’re a parent who wants to enjoy an emptier nest), then this will hopefully take you in the right direction! The thought of saving up for a first home, at least to me, can be quite intimidating. Prioritising home deposit saving over spending can be a difficult mind shift, especially when the lure of overseas travel or a better car is always in the background. In addition, media speculation about the trend that the housing market is getting further and further out of reach and conjecture over what interest rates will do adds to the confusion and anxiety about when and how to break into the market. Fortunately, there has recently been some relief for us ‘young ones’ hoping to break out and possibly get into home ownership sooner, and it doesn’t have to involve 24 hour monitoring of the cryptocurrency movement.

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Are Those Investment Returns on Revenue or Capital Account?

30 November 2017

Investment returns can be on revenue or capital account. Similarly investment expenditure could also be on revenue or capital account. The distinction between revenue and capital is not always clear and the characterisation of a receipt will ultimately depend on the circumstances that apply to the taxpayer.

The distinction between an income and capital receipt has been likened to the fruit and the tree, where the capital amount is the tree and the fruit being the return of income from the capital. Generally an income receipt is regarded as an amount that is regular, recurrent or periodic and income tax applies to a net amount of income. A good example is dividend returns from a shareholding.

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Small Business Car Parking FBT Exemption

28 November 2017

A business becomes liable for fringe benefits tax where it provides car parking benefits in the form of a car parking facility for more than four hours on its premises to its employees, and the relevant car parking facility is situated within one kilometre of a commercial car park where the minimum all day cost is more than the current parking fringe benefit threshold ($8.66 a day for the 2017-18 FBT year).

  • Note that this one kilometre is a radius, and “by the shortest practicable route, from a car entrance to those premises”. Also this can be travelled by any means, as long as this produces “the shortest practicable route”.

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Immediate Deductions for Start-up Costs

28 November 2017

Historically, taxpayers may have been able to claim a deduction for the costs associated with setting up a business or raising finance, including the costs incurred in:

  • establishing a company or other business structure
  • converting a business structure to a different structure
  • raising equity for the business
  • defending it against a takeover
  • unsuccessfully attempting a takeover
  • stopping carrying on business (including liquidating a company).

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Considering ride-sharing for income? Tips and traps

4 November 2017

Have you or someone you know considered taking up ride-sharing (also called ride-sourcing) to earn extra income, or even as an alternative form of employment? When providing ride-sharing services through Uber or GoCatch and other facilitators for a fare, there are things you will need to know, and traps you need to be aware of.

The first issue to make plain however depends on if you have already started offering ride-share services without considering the tax outcomes. If this is indeed the case, be pre-warned that come financial year’s end there’s a very real possibility that you may have built up a tax debt. Some drivers can be former salaried workers who don’t always realise how small business works (and may not even realise they are a small business now), and many think of sharing-economy services as “money on the side” without realising that tax rules still apply.

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SMSF stats just keep getting better

4 November 2017

The ATO has recently released the latest of what has become a regular update on the state of the SMSF market. The Self-managed super fund statistical report, with the latest covering the quarter to March this year, has become an anticipated overview for many in the SMSF arena – containing as it usually does some good news.

This quarterly update is no exception.

The statistical report is put together from the vast swathe of data gathered by the ATO from lodgements, returns, registrations and auditor contravention reports. As getting all of the relevant statistics together can take some time, relying as this effort does on all returns and so on being completed, some of the data used in this ATO report is sourced from very recent financial years. Otherwise the data reflects that state of play for the period January 1 to March 31, 2017.

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Accelerated Depreciation for Small Business

15 August 2017

In the 2015-16 federal budget, the government increased the small business immediate deductibility threshold from $1,000 to $20,000, which was originally due to end at June 30, 2017. But a law amendment bill has recently been passed by Parliament that extends that measure by 12 months until June 30, 2018, after which the deductibility threshold will revert to $1,000.

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