Archive for the ‘Superannuation’ Category

Super downsizer contributions reach $1 billion: Minister

Monday, August 12th, 2019

The Assistant Treasurer, Michael Sukkar, has announced that older Australians downsizing from their family homes have contributed $1 billion to their superannuation funds. The downsizer measure, which commenced on 1 July 2018, allows older Australians choosing to sell their home and downsize or move from homes that no longer meet their needs, to contribute the proceeds from the sale of their home into superannuation up to $300,000.

Issues for businesses

Monday, June 24th, 2019

Lower company tax rate

From 1 July 2016, the income tax rate applicable to qualifying companies has reduced to 27.5%. For the year ending 30 June 2019, this lower tax rate now applies for companies with aggregated turnover of up to $50 million, as long as they satisfy the “passive income test”.

Small business restructure rollover relief

Small businesses (<$10 million turnover threshold) have access to the small business restructure relief, which allows eligible taxpayers to transfer assets between related entities, including companies, trusts and individuals, without any income tax or CGT consequences. While this rollover can be very beneficial to a small business, and can lead to substantial tax savings, the eligibility rules can be complex, so care is needed.

Super guarantee contributions
The rate for super contributions paid by employers on behalf of their employees under the super guarantee for the year ended 30 June 2019 is 9.5%.
If you’re an employer, you must make super guarantee contributions for your employees quarterly, within 28 days after the end of each quarter (September, December, March and June).
TIP: Although the June 2019 quarter super guarantee contribution doesn’t have to be paid until 28 July 2018, it’s worth considering an early payment – you can only claim deductions on this year’s return for contributions that employees’ super funds receive by 30 June 2019.

Issues for individuals

Monday, June 24th, 2019

Deduct work-related expenses

People over claiming deductions for work-related expenses like vehicles, travel, internet and mobile phones and self-education are on the ATO’s hit list again this year. There are three main rules when it comes to work-related claims:
• You can only claim a deduction for money you have actually spent (and that your employer hasn’t reimbursed).
• The expense must be directly related to earning your work income.
• You must have a record to prove the expense.
Deductions are not allowed for private expenses (e.g. travel from home to work that’s not required to transport bulky equipment) or reimbursed expenses (e.g. for the cost of meals, accommodation and travel). And although you don’t need to include records like receipts with your tax return, the ATO can deny your claim – and penalties may apply – if you can’t produce the evidence when asked.
TIP: The ATO now uses real-time data to compare deductions across similar occupations and income brackets, so it can quickly identify higher-than-expected or unusual claims.

Don’t forget sharing economy income
Money that you earn from “gig” jobs through platforms like Uber, Air tasker and Airbnb, such as transporting passengers or renting out a room or house, counts as your assessable income. This means you must declare it on your tax return.
Depending on your gig activities and expenses, you may also be able to claim deductions related to this type of income, but it’s important to keep evidence to support your claims.

Superannuation contributions and changes
Both employees and self-employed individuals can claim a tax deduction annually (maximum $25,000) for personal superannuation contributions, provided the super fund has physically received the contribution by 30 June 2019 and the individual provides their fund with a “notice of intention to claim” document.
Important to note!
New rules mean that insurance coverage will be cancelled on “inactive” superannuation accounts from 1 July 2019, unless the fund member informs the fund in writing that they want to keep the insurance. Also, where an inactive account has a low balance (under $6,000) the fund will have to send that super to the ATO for consolidation and safekeeping.
If you haven’t made contributions or rolled over your super in the past 16 months, no matter what your balance, it’s important to check in with your fund now to keep your account active and maintain the insurance you want.
TIP: The new law also bans super funds from charging exit fees when you want to leave the fund, which should make it easier to change and consolidate your super accounts when you need to.

ATO reminds SMEs about paying super for backpackers

Friday, June 14th, 2019

The ATO has reminded businesses that employ backpackers that they may need to pay superannuation guarantee (SG) for them.
Backpackers on working holidays are considered temporary residents, and are entitled to superannuation guarantee if they are paid $450 or more before tax in a calendar month. Once they leave Australia, they can claim the super paid to them as a Departing Australia superannuation payment (DASP) providing all requirements are met.
TIP
Determine if backpackers on working holidays are eligible for super by using the ATO’s Super guarantee eligibility decision tool.

Protecting Your Super – how new law may affect SMSFs

Thursday, June 13th, 2019

The Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 introduces a number of reforms to protect individual’s super savings from undue erosion by fees and unnecessary insurance. The ATO says it will now be able to proactively consolidate eligible unclaimed super money into eligible active super accounts, including SMSFs and small APRA funds, if an individual hasn’t requested a direct payment of this money or for it to be rolled over to a fund of their choice. Under the Protecting Your Super package, the ATO says SMSFs may receive a rollover of consolidated unclaimed super money for members.

Super death benefit for de facto partner upheld

Tuesday, June 11th, 2019

The Federal Court has dismissed an appeal against a decision to pay a superannuation death benefit pension to a fire fighter’s de facto partner instead of a lump sum to his estate in Howard v Batistich [2019] FCA 525.
The trustee of the Crown Employees Superannuation Fund determined that the respondent, Ms Batistich, was a “de facto partner” of the deceased at the date of his death under the Superannuation Act 1916 (NSW) and the Interpretation Act 1987 (NSW). Accordingly, the trustee determined that Ms Batistich was entitled to a fortnightly pension. If there was no spouse (including a de facto), a lump sum death benefit of $350,000 would have been payable to the deceased estate.
The deceased’s parents, as the administrators of his estate, complained to the Superannuation Complaints Tribunal that Ms Batistich did not meet the definition of de facto partner.
In dismissing the appeal, the Court said it was not satisfied that the SCT had misunderstood its task or failed to take into account all the circumstances of the relationship.

Super guarantee amnesty not yet law, but $100 million recovered

Thursday, May 9th, 2019

The ATO has recovered around $100 million in unpaid superannuation from employers since the 12-month super guarantee amnesty was proposed on 24 May 2018, even though the law hasn’t yet changed to put the amnesty in place.
At a Senate Economics Legislation Committee hearing in April, ATO Deputy Commissioner, Superannuation Mr James O’Halloran estimated that there has been a 10–15% increase in the number of employers coming forward to self-report unpaid super guarantee amounts in response to the announcement of the amnesty, despite it not yet being law. Mr O’Halloran said 19,000 employers have come forward within the normal super guarantee charge process for reporting unpaid contributions.
The Bill to implement the amnesty lapsed on 11 April when the Federal Election was called, so the ATO must keep applying the existing law. This means employers who make a voluntary disclosure of historical non-compliance won’t be entitled to the proposed concessional treatment, unless and until the amnesty is legislated by a future Parliament. The ATO has said if this eventually happens, it will apply the new law retrospectively to voluntary disclosures made up until 23 May 2019.
TIP: Employers who’ve missed a super payment or haven’t paid employees’ super on time must lodge a superannuation guarantee charge statement and, while the current law applies, pay all of the relevant amounts, including interest and administration fees.

Super guarantee amnesty not yet law: ATO will apply existing law

Monday, April 15th, 2019

The ATO reminds businesses to be aware that under the current law, if they have missed a superannuation payment or haven’t paid employees’ super on time, they are required to lodge a superannuation guarantee (SG) charge statement.
Until law giving effect to the proposed superannuation guarantee amnesty is enacted, the ATO says it will continue to apply the existing law, including applying the mandatory administration component ($20 per employee per period) to SG charge statements lodged by employers.
The Bill containing the amnesty was still before the Senate when Parliament most recently concluded on 22 February 2019.
If it is eventually passed into law, the proposed amnesty will be a one-off opportunity for employers to self-correct their past SG non-compliance without penalty. It is intended to be available for 12 months from 24 May 2018 to 23 May 2019. The ATO will apply the new law (if it is passed) retrospectively to eligible voluntary disclosures made during this period.

Super guarantee compliance: time to take action

Thursday, March 7th, 2019

The government’s latest initiatives targeting non-compliance with superannuation guarantee (SG) obligations give businesses plenty to think about. With Single Touch Payroll on the way for small businesses, all employers should take time to review their arrangements for paying employees’ super.
The government is proposing a 12-month “amnesty” for employers to voluntarily disclose and correct any historical underpayments of SG contributions for any period up to 31 March 2018 without incurring penalties or the usual administration fee. This is provided the ATO hasn’t already commenced a compliance audit of that employer. Additionally, employers will be entitled to claim deductions for the catch-up payments they make under the amnesty.
TIP: It’s an important time for businesses to get their SG affairs in order. If you’re an employer with outstanding underpayments of SG contributions, we can assist with the process of making a voluntary disclosure to the ATO.

ATO issuing excess super contributions determinations

Friday, February 1st, 2019

The ATO has begun issuing determinations to people who exceeded their concessional superannuation contributions cap for the 2017–2018 financial year. These determinations will also trigger amended income tax assessments and additional tax liabilities. Individuals can elect for the ATO to withdraw their excess contributions from their super fund to pay any additional personal tax liability.
TIP: Concessional contributions include all employer contributions, such as the 9.5% superannuation guarantee and salary sacrifice contributions, and personal contributions for which a deduction has been claimed.
You have 60 days from receiving an ECC determination to elect to release up to 85% of your excess concessional contributions from your super fund to pay your amended tax bill. Otherwise, you will need to fund the payment using non-superannuation money.


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