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Transitioning to retirement

28 August 2022

Thinking about easing into retirement and maintaining your lifestyle? The transition to retirement (TTR) strategy can help you achieve this and help you access some of your superannuation while you keep working.

How the TTR strategy works

If you’ve reached your preservation age (between 55 and 60) and are still working, setting up a TTR pension could provide you with greater financial flexibility by enabling you to withdraw up to 10% of your superannuation each financial year while continuing to work.

You can start a TTR pension by transferring some of your superannuation to an account-based pension (ABP), which is a regular income stream bought with money from your superannuation fund.

However, you should keep some money in your superannuation fund to continue to receive your employer’s compulsory superannuation guarantee (SG) contributions, or any other voluntary contributions you wish to make to your fund.

There are two main TTR strategies that can be used to help you:

Supplement your income if you reduce your work hours, or
Boost your superannuation and save on tax while you keep working full time.

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Switching home loans

9 August 2022

With interest rates increasing quite rapidly, homeowners are being encouraged to look around for a better deal on their home loan. ASIC has recently released some tips if you are doing so.

Ask your current lender for a better deal

Tell your current lender you are planning to switch to a cheaper loan offered by a different lender. To keep your business, your lender may reduce the interest rate on your current loan.

If you have at least 20% equity in your home, you’ll have more to bargain with. Having a good credit score will also help with negotiations.

Compare any loan they offer you with the other loans you’re considering switching to.

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GST Health Check

9 August 2022

Now that the financial year has come to a close, it’s good time to check all things GST.

Registration

If you are not already registered, you may over the coming period need to register for GST if:

your business or enterprise begins to have a GST turnover of $75,000 or more per year (gross income from all businesses minus GST)
your non-profit organisation begins to have a GST turnover of $150,000 or more.

Even if you are under these thresholds, it may be advantageous to register for GST if you typically end up in a GST refund position each tax period. By registering, this will enable you to claim the GST tax credits on certain purchases rather than missing out on those credits because you are not registered. Talk with us further if you are uncertain around this.

Conversely, if your turnover drops below these thresholds or you are contemplating ceasing business, you may deregister from GST. There are certain consequences that flow from deregistering which we can run through with you.

If you are not registered for GST and therefore cannot claim GST credits on business-related purchases, you can claim the GST as a tax deduction – though this is not as profitable as claiming the credit in full if you were GST-registered.

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ATO Prioritising Debt Collection

1 August 2022

As the economy emerges from COVID-19, the ATO is re-focusing on debt collection.

During the pandemic, the ATO deliberately shifted its focus away from firmer debt collection action to help and assist businesses and the community experiencing financial challenges because of the pandemic. It took a softly-softly approach, acknowledging the financial hardship that the virus wrought on business and individuals alike. However, with the economy now opening back up, business as usual on the ATO debt collection front, has now largely resumed.

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STP year-end finalisations … due soon!

10 July 2022

Employers need to make STP finalisation declarations by 14 July each year. As your registered agent, we can assist you in this important, upcoming process.

If you have 20 or more employees, you should be reporting closely-held (related) payees each pay day along with arms-length employees. The finalisation due date for closely-held payees is 30 September each year.

A ”closely-held (related) payee” is an individual directly related to the entity from which they receive payments (for example, family members of a business, directors or shareholders of a company, or beneficiaries of a trust).

For small employers (19 or fewer employees) who only have closely-held payees, the due date for end-of-year STP finalisation will be the payee’s income tax return due date.

For an employer with a mixture of both closely-held payees and arms-length employees, the due date for end-of-year STP finalisation for closely-held payees is 30 September each year. All other employees are due 14 July each year.

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ATO warning of fake ABN and TFN scams

6 July 2022

The ATO has just recently reported an increase in fake websites offering to provide tax file numbers (TFNs) and Australian Business Numbers (ABNs) for a fee, but then failing to provide the service – leaving taxpayers out of pocket.

The fake TFN and ABN services are typically advertised on social media platforms like Facebook, Twitter, and Instagram.

The advertisements offer to obtain your TFN or ABN for a fee. Instead of delivering this service, the scammer uses these fraudulent websites to steal both money and personal information.

It is free, quick and easy to use government services to apply for a TFN through the ATO, or apply for an ABN through the Australian Business Register (ABR).

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Tax and Property Price Increases

6 July 2022

With residential property values on a sharp upward trajectory, from a tax standpoint, what does this mean for owners and investors of this style of dwelling?

Introduction

Domain’s End of Year Wrap revealed that in 2021, Australian house prices rose an astonishing 21.9%, the fastest annual rate of growth on record! Viewed through a taxation prism, these increases mean practically nothing unless the owner is selling or otherwise disposing of their property. If the property is retained, then the increases are merely a “paper gain”. By holding onto the property there generally won’t be any CGT consequences.

The obvious question then arises, what are the consequences from a tax perspective where an owner does decide to cash in on the boom and sell their residential property?

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More super for lower-income workers on the way

19 June 2022

Did you know that lower-income earning individuals who earn less than $450 per month are currently not eligible for superannuation guarantee (SG) contributions from their employer?

The $450 per month threshold also applies if an employee has more than one part-time or casual job and they earn more than $450 per month from all jobs combined. It simply comes down to the amount earned per job which can disadvantage many younger or lower-income workers.

But not for long …

The $450 threshold will be abolished from 1 July 2022 due to recent legislative changes. This means that all employers will have to pay SG contributions for all employees, regardless of how much they earn per month.

The removal of the $450 per month threshold will benefit an estimated 300,000 people or 3% of employees[1], who are mainly young and/or lower-income and part-time workers, approximately 63% of whom are female[2]. These changes will help these workers start accumulating super earlier as well as help address the gap in super savings between women and men.

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Downsizer contributions to SUPER

19 June 2022

Did you know you could invest the proceeds of the sale of your family home to your superannuation, depending on your age and circumstances?

What is a downsizer contribution?

From 1 July 2022, if you’re aged 60 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 up to 15% whilst in accumulation phase.

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Four priorities for the ATO this Tax Time

8 June 2022

In the middle of May, the ATO announced that there will be four focus areas on their radar during Tax Time 2022 – record-keeping, work-related expenses, rental property income and deductions, and capital gains from crypto assets. It is reminding taxpayers that there are three golden rules when claiming a deduction:

You must have spent the money yourself and weren’t reimbursed
If the expense is for a mix of income producing and private use, you can only claim the portion that relates to producing income, and
You must have a record to prove it.

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