Blog

Reduction in downsizer eligibility age

The eligibility age for downsizer contributions reduced from 60 to 55 years from 1 January 2023. This means if you are age 55 or older, you could invest the proceeds of the sale of your family home to your superannuation outside of your standard contribution caps.

Downsizer contributions

From 1 January 2023, if you’re aged 55 years or older you may be eligible to make a downsizer contribution of up to $300,000 (or $600,000 for a couple) to your superannuation fund from the proceeds of the sale of your home where specific requirements are met.

Downsizer contributions can be a great way of boosting your superannuation after retirement. As well as the extra capital they introduce, the contributions can also earn investment income that is either tax-free if you commence an income stream with the funds or be taxed at a concessional tax rate of as low as 15% whilst in accumulation phase.

Continue reading “Reduction in downsizer eligibility age” →

ATO New-Year Resolutions

4 February 2023

The ATO has released its new year resolutions…and there is not a gym in sight! According to the ATO the five new year’s resolutions to keep if you want to stay on top of your tax and super in 2023 are:

  1. Know if you’re in business or not

Are you earning an increasing income from a side-hustle?

If you answer yes to a few of the following questions, the more likely it is your activities are a business:

  • Do you intend to be in business?
  • Do you intend and have a prospect of making a profit from your activities?
  • Is the size or scale of your activity sufficient to make a profit?
  • Are your activities repeated and continuous?
  • Are your activities planned, organized, and carried out in a business-like manner? For example, do you:
    • keep business records and have a separate business bank account?
    • advertise and sell your goods and services to the public, rather than just to family or friends?
    • operate from business premises?
    • maintain required licences or qualifications?
    • have a formal business plan or budget?
    • have a business name or an ABN?

We can help you make this call as to whether your side-hustle may be a business.

Continue reading “ATO New-Year Resolutions” →

FBT exemption for electric vehicles

13 December 2022

Electric vehicles are set to become more affordable for both households and businesses after the government sealed a deal with crossbench Senators on legislation to exempt low and zero emission cars from fringe benefits tax (FBT).

The new law introduces an electric car discount in the form of an FBT exemption. This allows for car fringe benefits comprising the use or availability for use of an eligible car that is a zero or low emissions vehicle to be exempt from FBT. Specifically, a car benefit will be an exempt benefit for a year of tax if:

  • the car is a zero or low emissions vehicle (note the scheme has been extended to include plug-in electric and internal combustion hybrids until 1 April 2025)
  • the value of the car at the first retail sale was below the luxury car tax threshold for fuel efficient vehicles (currently $84,916), and
  • the car is first held and used on or after 1 July 2022.

Continue reading “FBT exemption for electric vehicles” →

New work from home deduction rules

13 December 2022

The ATO has issued new draft guidelines around a new method (the revised fixed rate method) of calculating work-from-home running expenses from 1 July 2022 (as an alternative to calculating the actual work-related portion of all running expenses).

The new revised fixed rate method will replace both:

  • the 52 cents fixed-rate method set out in paragraph 5 of Practice Statement PS LA 2001/6 (for electricity and gas expenses, home office cleaning expenses and the decline in value of furniture and furnishings), and
  • the short-cut (COVID-19) 80 cents method (for all additional running expenses).

You are eligible to use the revised fixed-rate method from 1 July 2022 if you:

  • work from home to fulfil your employment duties or to run your business (a separate home office or dedicated work area is not required)
  • incur additional running expenses that are deductible, and
  • keep and retain records of the time spent working from home and of the additional running expenses incurred.

Continue reading “New work from home deduction rules” →

On-boarding employees for the holiday rush

10 December 2022

Hiring additional employees to help with surging end-of-year demand? A New employment form,   accessed through ATO online services, will help reduce your compliance time.

It’s an easy way for your employees to provide you and the ATO with the information that the ATO need. If your new employee has a myGov account linked to the ATO, once signed in they can:

  • access ATO online services
  • go to the ‘Employment’ menu
  • select ‘New employment’ and complete the new form.

Your employees will need your ABN to complete the form. When they submit the form, their tax file number (TFN) declaration details are sent straight to the ATO, so you as their employer do not need to do this. The form will then enable them to print and give you the summary of their tax details. You’ll need the summary so you can input the data into your system.

Continue reading “On-boarding employees for the holiday rush” →

Xmas gifts from employers

5 December 2022

Christmas is traditionally a time of giving, including employers showing gratitude to their workers for a job well done throughout the year. However, depending on the nature and value of the gift, and also who it is gifted to, such magnanimity can potentially attract unwanted tax consequences. So how as an employer do you gift most tax-effectively this festive season?

Continue reading “Xmas gifts from employers” →

Single member SMSFs

4 December 2022

From 1 July 2021, the law was changed to allow for six-member SMSFs (up from five members). At the time of writing, the uptake has been slow so far with just 228 funds with six members. At the other end of the spectrum, it is permissible to have single member funds. The main advantage of doing so is that you have total control over your retirement savings, and the investment decisions in respect of those savings. However, there are some issues to be mindful of.

Continue reading “Single member SMSFs” →

Bridging the super gender gap

27 November 2022

Fresh statistics released by the ATO reveal that the superannuation gender cap is very real.

While the average super balance for a man is $161,834, for a woman it’s $129,506 – a massive 25% difference. This gender gap begins in peoples’ twenties, mostly caused by wage differences and time off for children, and by their early thirties it is already 20%. A man aged 30-to-34 has an average super balance of $48,603 and a woman $40,479, the ATO data shows. The compounding impact of this difference alone over time is significant.

There are at least three key strategies that can be implemented to help close this gap.

Continue reading “Bridging the super gender gap” →

Federal Budget

2 November 2022

Business and Individual Taxation

The confirmation of lucrative income tax cuts, and the scrapping of a tax offset for low and middle-income earners were the big-ticket items. That said, labor’s first federal Budget in nine years was as noteworthy for the changes it didn’t make as for those that it did. Unmentioned were current outstanding issues impacting the taxation of trusts, the long-awaited simplification of 7A, the future of business depreciation after this financial year and more.

Continue reading “Federal Budget” →