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Using A Corporate Trustee Instead Of Individuals For A Family Trust

Posted by Anthony

A family trust is a great structure.  It provides tax flexibility whilst giving you asset separation in two directions.  But what does asset separation in two directions mean? And why might we suggest it to you as a recommendation? First of all, why do you want asset separation? If there are multiple assets, you want to make sure that if someone makes a claim against the owner of a particular asset that your other assets can be quarantined from that claim. This isolation will mean that they can’t gain access to the assets that are yours and separate from the claim. If you own a business and have a successful financial claim made against your business where the claim is for an amount that is more than the assets of the business, you will first need to use the business to cover the claim, and then find something additional to supplement the shortfall. In this case, if you also own your own home, and its worth is enough to cover that shortfall, it may be used to meet the claim by combining the business assets’ worth and the family home’s value. You could lose your family home! However, if we […]

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Recent Changes To Your Superannuation That You Need To Know

Posted by Anthony

There were a few changes to superannuation that were passed by the Senate recently.   You can now use the bring-forward rule to make three years’ worth of non-concessional contributions (where you don’t claim a tax deduction) up until the age of 67.     Last year the rules had changed to permit a person to make non-concessional contributions up to the age of 67 but the use of the bring forward rule had stayed at an age limit of 65 years old, as it required a full Bill to be passed by both Houses of Parliament.     This new age limit will apply to contributions made on or after the 1st July 2020.  This is particularly good news for people that turned 67 during the year and utilised the three year bring forward rule in anticipation of the law being passed.   From the first quarter after receiving royal assent (most likely to occur from 1st July), Self Managed Superannuation Funds will be allowed to have up to six members.  The limit is currently four members. For larger families, this will be of particular use and relevance, as the parents involved in the fund may wish to include more than […]

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1 July 2021 Will See Super Guarantee Rate Rise

Posted by Anthony

Many years ago Julia Gillard’s government announced increases in the Superannuation Guarantee rate from 9% at the time, up to 12%.  The impact of the Global Financial Crisis has led subsequent governments to continually postpone these increases. So far, Australia has only received two increases, back in 2013 and 2014, when the superannuation rate went up to 9.5% over two years.  It has remained at 9.5% since 2014.   Now it is time for the next increase. This will happen on 1 July 2021 when the rate of superannuation that you have to pay for most of your employees will be 10% of their salary or wage instead of the current 9.5%.   For most employers that are using payroll software, this change will happen automatically. You should however confirm with your software provider (either directly or through someone like us) that this will happen to ensure that you remain compliant without needing further action.   For most employees, this will mean an extra 0.5% added to their current salary plus super.  But where an employee is on a contract where their salary is superannuation inclusive it could be that they will receive a corresponding reduction in their salary to […]

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High School Students, It’s Time To Get Creative About Tax & Super

Posted by Anthony

The ATO’s Tax, Super + You competition is a fun and engaging way for Australian high school students to learn about tax and super, unleash their creativity and potentially win some great prizes. Working as a part of a team or individually, students are invited to write, make or film an entry for their topic: * Junior (Year 7–9) are asked to highlight the value of tax or super (or both) in the community * Senior (Year 10–12) must discuss your first job and what you need to know about tax and super. Shortlisted entries in 2019 included raps, songs, animations, video skits and even a board game. If you’re a high school student interested in competing this year or are the parent of one, this resource is a great way to see how people have gotten involved previously (and that you can draw inspiration from as well). The competition opened on 24 May, but entries will be accepted until 13 August. The winners will be decided by a judging panel, including guest judge Effie Zahos who is one of Australia’s leading personal finance commentators. The public can also vote for their favourite entry in the People’s Choice Awards. Tax […]

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Getting a Double Deduction for your Super Contributions?

Posted by Anthony

Each year we are entitled to a tax deduction for a certain amount of superannuation contributions. The tax deduction is available to your employer if they contribute on your behalf but it can also be available to you personally when you make extra contributions to super. The amount that you can claim as a tax deduction is limited to what is known as your Concessional Contributions Cap.  There is a standard Cap of $25,000, though that is increasing to $27,500 on 1st July 2021. There are certain people that can add amounts that haven’t been used in previous years to this cap amount. If you go over your Concessional Contributions Cap, the excess contributions are merely added to your taxable income so you don’t get any tax benefits out of the contribution. For example, let’s say your Concessional Contributions Cap is $25,000 but you make $35,000 in concessional contributions.  The extra $10,000 will be added to your taxable income but you will receive a credit for the $1,500 in contributions tax paid by the super fund. But there is a little known trick to allow you to “bring forward” a tax deduction for your concessional contributions.  This “hack” is commonly […]

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Downsizer Contributions – What Are They?

Posted by Anthony

If you are aged 65 years or older, you are currently able to make downsizer contributions of up to $300,000 into your superannuation fund from the sale of your main residence (as of 1 July 2018). The Federal Budget recently announced that the age limit for downsizer contribution payments will be reduced from 65 to 60 once the relevant legislation has been passed. This means that you can increase your super fund’s balance without impacting on your contribution caps (as it is not a non-concessional contribution), and this contribution can still be made even if your superannuation balance exceeds $1.6 million. It does however count towards your transfer balance cap, which is currently set at $1.6 million (increasing to $1.7 million for most people on 1 July 2021). The downsizer contributions scheme can only be accessed once, so it can only apply when you sell or dispose of one home, including selling a part interest in a home. It is a one-time deal essentially and is not a tax-deductible amount. You can however make multiple downsizer contributions from the proceeds of a single sale, but the total of the contributions cannot exceed $300,000 less than any other downsizer contributions that […]

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Removing Superannuation’s Minimum Income Threshold Limit

Posted by Anthony

From 1 July 2022 employees will no longer need to meet the monthly minimum income threshold of $450 to receive superannuation guarantee payments from their employers due to the Federal Budget’s recently announced changes to superannuation. Previously, employers did not need to pay employees superannuation guarantee payments if they did not earn $450 per month. Employees who worked for multiple employers but did not earn the same amount from a single employer were not eligible for superannuation guarantee payments. Close to $125 million of contributions was not being made due to employees not satisfying the minimum income threshold of $450. An estimated 300,000 Australians were reported to have been missing out on those contributions each year. For employees who worked in lower-income jobs or in part-time or casual employment that may not reach that minimum income threshold, this meant that they were missing out on critical payments to their super. With women making up a more significant proportion of these workers, it also caused the gender gap in superannuation already present to widen further. The removal of the minimum income threshold means now that these employees will be able to accrue super through the payments made by their employer and […]

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Removing Superannuation’s Minimum Income Threshold Limit

Posted by Anthony

From 1 July 2022 employees will no longer need to meet the monthly minimum income threshold of $450 to receive superannuation guarantee payments from their employers due to the Federal Budget’s recently announced changes to superannuation. Previously, employers did not need to pay employees superannuation guarantee payments if they did not earn $450 per month. Employees who worked for multiple employers but did not earn the same amount from a single employer were not eligible for superannuation guarantee payments. Close to $125 million of contributions was not being made due to employees not satisfying the minimum income threshold of $450. An estimated 300,000 Australians were reported to have been missing out on those contributions each year. For employees who worked in lower-income jobs or in part-time or casual employment that may not reach that minimum income threshold, this meant that they were missing out on critical payments to their super. With women making up a more significant proportion of these workers, it also caused the gender gap in superannuation already present to widen further. The removal of the minimum income threshold means now that these employees will be able to accrue super through the payments made by their employer and […]

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What Does The Non-Concessional Cap Increase Mean For You?

Posted by Anthony

The Federal Budget dropped on Tuesday, 11 May, with many announced amendments and changes that affected the superannuation and SMSF sectors. Non-concessional contributions increased maximum limits were announced and would come into effect as of 1 July 2021, increasing the cap from $110,000, up from the previous cap of $100,000. Personal Contributions made into an SMSF from after-tax income on which no tax deduction is claimed, known as Non-Concessional Contributions. Non Concessional Contributions are personal contributions made into your SMSF from your own personal Bank Account and not contributions to your super made by your Employer. You will be able to put non-concessional contributions into super (including using the bring-forward rule) up until age 74, without there being a need for you to work. The bring-forward rule is a provision that allows Members of a superannuation fund to make non-concessional contributions that amounted to more than the contributions cap of $100,000 in one year by utilising the cap for the next two years. It has been amended to reflect the Budget’s rulings and come into effect on 1 July 2021. You will still need to meet the work test if you wish to make tax-deductible contributions. Still, this outcome may […]

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What Does The Non-Concessional Cap Increase Mean For You?

Posted by Anthony

The Federal Budget dropped on Tuesday, 11 May, with many announced amendments and changes that affected the superannuation and SMSF sectors. Non-concessional contributions increased maximum limits were announced and would come into effect as of 1 July 2021, increasing the cap from $110,000, up from the previous cap of $100,000. Personal Contributions made into an SMSF from after-tax income on which no tax deduction is claimed, known as Non-Concessional Contributions. Non Concessional Contributions are personal contributions made into your SMSF from your own personal Bank Account and not contributions to your super made by your Employer. You will be able to put non-concessional contributions into super (including using the bring-forward rule) up until age 74, without there being a need for you to work. The bring-forward rule is a provision that allows Members of a superannuation fund to make non-concessional contributions that amounted to more than the contributions cap of $100,000 in one year by utilising the cap for the next two years. It has been amended to reflect the Budget’s rulings and come into effect on 1 July 2021. You will still need to meet the work test if you wish to make tax-deductible contributions. Still, this outcome may […]

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