Loans to members continue to be the highest reported contravention of the superannuation laws that the ATO sees in auditor contravention reports. Self-Managed Super Funds (SMSF) trustees should remember that they cannot loan money or provide other forms of financial assistance to a member or relative, and if they do, they can incur a penalty…
Taxpayers who have received a government support grant recently to help their business recover from COVID-19 or a natural disaster should check if they need to include the payment in their assessable income. Grants are generally treated as assessable income, and taxpayers may be able to claim deductions if they use these payments to: Purchase…
Year End Staff Parties With the holiday season underway, many employers will be planning to reward staff with a celebratory party or event. However, there are important issues to consider, including the possible FBT and income tax implications of providing ‘entertainment’ (including Christmas parties) to staff and clients. FBT and ‘entertainment’Under the FBT Act, employers…
The downsizer contribution concession was introduced to allow older Australians selling an eligible dwelling to make additional contributions into their superannuation fund. Broadly, the downsizer contribution concessional allows eligible individuals to make non-deductible contributions of up to $300,000 (or up to $600,000 per couple) from the sale of an eligible dwelling that was used as…
The Australian Taxation Office (ATO) reminds taxpayers that a Self-Manager Superannuation Fund (SMSF) must pay a minimum amount each year to a member who is receiving a pension that commenced on or after 20 September 2007 (eg account based pensions). If the minimum payment is not made by 30 June, this can result in adverse…
Taxpayers who are small business owners operating from home, or who use a vehicle for business purposes, need to be aware of some changes when claiming deductions this tax time, including the following: Cents-per-kilometre method – the cents-per-kilometre method for claiming car expenses has increased from 72 cents to 78 cents per kilometre in the…
The Small Business Development Corporation is administering and delivering the Small Business and Charities Energy Bill Relief program to eligible small businesses and charitable organisations that operate in embedded networks in WA. This will be in the form of a direct payment of $650 (GST Free) to the bank account of eligible businesses. Embedded networks…
The ATO has reminded Self-Managed Superannuation Funds (‘SMSF’) trustees that their SMSF must be operated for the sole purpose of providing retirement benefits for its members. This means SMSF trustees can’t use funds from their SMSF to pay for personal or business expenses. This is known as ‘illegal early access’ of superannuation, and severe penalties…
The Government recently announced it will be imposing a 15% additional tax on individuals that have more than $3 million in superannuation. The new measure is expected to commence from 1 July 2025 (ie the 2026 income year). The main takeaways from the information provided thus far include the following: The additional 15% tax will…
The ATO has recently released draft guidelines setting out a methodology for calculating the cost of electricity when an electric vehicle (‘EV’) is charged at an employee’s or individual’s home. The draft guideline may be relied on by employers and individuals who satisfy the required criteria for FBT and income tax purposes respectively, as set…
Until recently, the FBT consequences for providing electric cars to employees were effectively the same as any other car. However, from 1 July 2022, FBT is no longer payable on benefits provided for eligible electric cars and associated expenses. Practically, this exemption will be relevant for the first time in the FBT year. Broadly, benefits…
Deductions under ‘temporary full expensing’ are only available in the 2021, 2022 and 2023 income years, and are coming to an end on 30 June 2023. Under temporary full expensing, businesses with an aggregated turnover of less than $5 billion can generally claim a deduction for the full cost of the eligible new assets first…
The 2023-2024 Budget did not announce any extension of the low and middle income tax offset (LMITO) beyond the 2021-2022 income year. The LMITO has now ceased and been fully replaced by the low income tax offset (LITO). With no extension of the LMITO announced in this Budget, 2021-2022 was the last income year that…
On 9 May 2023, Treasurer Jim Chalmers handed down the 2023/24 Federal Budget. Some of the measure announced by the Government (including some which were announced prior to the Budget), include: From 1 July 2026, employers will be required to pay their employees’ superannuation at the same time as their salary and wages;Providing businesses with…
In another recent legislative change, the eligibility age to make a downsizer contribution into superannuation has been reduced to 55 from 1 January 2023. This further reduces the downsizer eligibility age, which changed from 65 t0 60 from 1 July 2022. From 1 January 2023, eligible individuals aged 55 years or older can choose to…
An individual’s transfer balance cap (TBC) determines the maximum amount they can commit to a retirement phase interest in their superannuation fund, such as an account-based pension, without it being subject to penal taxation. When the TBC concept was introduced with effect from 1 July 2017, it was initially $1,600,000. It increased by $100,000 as…
Before 1 July 2022, an individual taxpayer that incurred additional deductible expenses as a result of working from home had a choice of three methods to claim these expenses. These choices were: The shortcut method – which was available from 1 March 2020 to 30 June 2022The fixed-rate method – which was available from 1…
Self-education expenses are generally tax-deductible for individuals if there’s sufficient connection with your income-producing activities. However, until new legislation was recently passed, the amount you could deduct was limited by s82A of the Income Tax Assessment Act 1936 so that only the amount spent over a $250 threshold was deductible. This threshold was an artefact…
Legislation to make certain electric vehicles exempt from Fringe Benefits Tax (FBT) has now been enacted into law. Certain zero or low emission vehicles, provided as a car benefit on or after 1 July 2022, can be exempt from FBT. For this exemption to apply, various criteria needs to be satisfied. The car needs to…
It is essential these days for a business to have a website to promote their products or services. Left without guidance following the withdrawal of TR 2001/6 in 2009, business owners have treated website expenditure in many different ways. At least, this was the case until recently. The Australian Taxation Office have now issued ruling…