Client – August 2025

Newsletter

Newsletter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 28 July 2025.

HECS/HELP debt reduction Bill introduced – The government has now introduced legislation aimed at enacting its election promise to reduce student debt by 20%.

Small and medium businesses now have more time to get tax returns right – For 2024–2025 and later income years, businesses with an annual aggregated turnover of less than $50 million have up to four years to request amendments.

ATO interest charges no longer tax-deductible for businesses – Any GIC or SIC incurred from 1 July 2025 cannot be claimed as a tax deduction, regardless of when the underlying tax debt arose.

Protect your super from pushy sales tactics: consider the risks and don’t rush to switch – At this time of year, you’re more likely to be targeted by high-pressure campaigns to get you to switch super funds or make investments that may be unsuitable for you.

Will your super be affected when the $3 million balance tax hits? – Before the new policy’s set in stone, if you think you may be affected it would be wise to seek advice

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Single Touch Payroll, it’s time to get ready – From 1 July 2018, if you have 20 or more employees, you need to use Single Touch Payroll enabled software to report your tax and super information to the ATO. Please contact us if you need help.

Audit Insurance – Whilst historically, Tax Audits were targeted at big business and the wealthy, this has changed. Increasingly the ATO are turning their attention to both small to medium businesses and individuals.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

KEYLINKS

https://www.guests.com.au

GUESTS ACCOUNTING

Tax & Accounting Focused on your future

client alert

HECS/HELP debt reduction Bill introduced

On 23 July, the Labor government introduced legislation aimed at enacting its election promise to reduce student debt by 20%. The Billproposes to:

provide a one-off 20% reduction to Higher Education Loan Program (HELP) debts and certain other student loans that are incurred on or before 1 June 2025;
increase the minimum repayment threshold from $54,435 in 2024–2025 to $67,000 in 2025–2026; and
introduce a marginal repayment system where compulsory student loan repayments are calculated only on income above the new $67,000 threshold rather than having it based on a percentage of the repayment income.

This complements measures enacted in the last Parliament which cap the level of indexation of student loans to the lower amount of either the consumer price index (CPI) or the wage price index (WPI). This is designed to ensure that loans will never be indexed by more than wages growth. Accordingly, the new threshold of $67,000 will be indexed for 2026–2027 and following years, but will never be increased by a rate exceeding wages growth.

Small and medium businesses now have more time to get tax returns right

If you run a small or medium business, you know that financial accuracy’s important but sometimes mistakes can happen or information can change. Starting this year, though, you have more time to amend your return and get things right.

Before this change, small and medium businesses generally had a two-year period from the date of their tax assessment to request an amendment. If you discovered an error or omission after this two-year window, correcting it could become a more complex process.

Now, for the 2024–2025 and later income years, small and medium businesses with an annual aggregated turnover of less than $50 million will have up to four years to request amendments to their income tax returns. This gives more time to review records, reconcile figures and address any oversights – but remember, it’s not an excuse to rush your first lodgement.

For earlier income years, the two-year amendment period still applies.

Your review period starts the day after the ATO issues your notice of assessment for the relevant income year. If no notice is issued, it starts from the date you lodged your return.

Here are some common scenarios where you might need to request an amendment:

you made a simple error when entering figures;
you forgot to report some income or capital gains, or claim legitimate deductions;
you incorrectly claimed deductions or credits, or failed to claim ones you were entitled to; or
circumstances changed after lodging and affected something you’d already reported, like a revised invoice or a business event you hadn’t factored in.

Whatever the reason, it’s important to correct any errors as soon as you identify them. For example, if an amendment leads to an increased tax liability, time-based interest and penalties might apply, so prompt action’s still beneficial.

There are no ATO fees for amendment requests, but processing can take a substantial amount of time.

If you discover an error that increases the tax you owe, you may face interest charges and penalties. However, voluntary disclosure of mistakes is generally viewed more favourably than errors discovered during an audit.

If the ATO’s already notified you of an audit or review, you must tell the assigned tax officer about any errors rather than lodging an amendment request.

Remember, the extended amendment period offers greater peace of mind, but good record-keeping and a proactive approach remain your best tools for managing your tax affairs effectively.

ATO interest charges no longer tax-deductible for businesses

Effective 1 July 2025, businesses can no longer claim income tax deductions for interest charges imposed by the ATO on unpaid or underpaid tax liabilities. This change applies to general interest charge (GIC) and shortfall interest charge (SIC) amounts incurred in income years starting on or after 1 July 2025.

Previously, businesses could deduct ATO-imposed interest charges on overdue tax debts, reducing the net cost of these charges. From 1 July 2025, this deduction is no longer available, meaning any GIC or SIC incurred from this date cannot be claimed as a tax deduction, regardless of when the underlying tax debt arose.

For example, if a business incurs GIC on an unpaid income tax liability after 1 July 2025, this interest expense is not deductible in its tax return for the 2025–2026 income year or subsequent years.

This legislative change is significant for businesses that manage cash flow by deferring tax payments, as the cost of carrying tax debt will effectively increase. Without the tax deduction, the real cost of ATO interest charges rises, making it more expensive to delay tax payments.

The ATO applies GIC on unpaid tax liabilities at a rate that is reviewed quarterly and compounds daily. As of the latest update, the GIC rate is 11.17%.

The removal of tax deductibility for ATO interest charges underscores the importance of timely tax compliance. Businesses should act promptly to adjust their financial strategies, ensuring that they are not adversely affected by increased costs associated with overdue tax payments.

Protect your super from pushy sales tactics: consider the risks and don’t rush to switch

Each new financial year, many of us take a closer look at our super funds’ performance, and you’re more likely to be targeted by salespeople, cold callers or social media ads offering “free super health checks” or to “find your lost super”. These offers can be the start of a high-pressure campaign to get you to switch super funds or make investments that may be unsuitable for you.

These calls and ads don’t always look like typical scams. Callers may sound genuine, claiming they want to help you find a better deal or locate lost super for free. Sometimes they’ll even refer you to a financial adviser to make the pitch sound more legitimate. But behind the scenes, there may be commission arrangements or other incentives that put their interests ahead of yours.

Here are some warning signs that a caller or an advertiser might not have your best interests at heart:

Cold calls and unsolicited contact: If someone you don’t know contacts you about your super, they may have bought your contact information or obtained it by more questionable means.
Pressure to act quickly: Remember super decisions are significant and should never be rushed.
“Free” super health checks or lost super services: These offers are often a hook to draw you in. You can find your own lost super for free directly through the ATO.
Promises of high or unrealistic returns: If an offer sounds too good to be true, it almost always is.
Claims your fund is underperforming: Sales agents may exaggerate issues with your current fund to make you want to switch. Always verify negative claims directly with your super fund if you have concerns.
Limited direct contact with a financial adviser: The caller might act as an intermediary, transferring you to an adviser only briefly. If you’re not having direct, in-depth conversations, they may not be acting in your best interests.
Involvement of unlicensed people: Ensure anyone discussing your super is properly licensed and qualified to provide advice.

Remember, if a deal sounds too good to be true, it probably is. Promoters often play on your fears, hopes and your politeness to rush you into a decision.

How to protect yourself

If someone you don’t know contacts you about your super, just hang up – don’t feel guilty or pressured to engage or explain.
Don’t share personal or financial information with callers or on online forms unless you initiated the contact and are sure who you’re dealing with.
Report suspicious calls to your super fund and ASIC. If you think your information has been compromised, let your current super fund know so they can help protect your account.
Contact your super fund directly or seek guidance from a licensed, independent financial adviser before making any changes.
You can always find lost super for free through the ATO; there’s no need to pay anyone to do it for you.

Your super is too important to risk. Take your time, ask questions and don’t rush into any decisions.

Will your super be affected when the $3 million balance tax hits?

Since February 2023, the Australian government has been planning to introduce a new tax of 15% on a portion of “earnings” relating to total superannuation balances over $3 million. The idea was to inject some equity in a system with generous tax concessions weighted in favour of the wealthy. The tax change was proposed to kick in on 1 July 2025.

Debate over issues concerning the non-indexed $3 million threshold and the taxation of unrealised capital gains then put the proposal on ice. The Bill containing the change is expected to be reintroduced now that Parliament has resumed. The Bill proposes to insert a new Division 296 into the Income Tax Assessment Act 1997, which is why you might hear the change called the “Division 296 tax”.

What will apply and when?

Currently, your entire super balance earnings in accumulation are taxed at 15%.

If your “total superannuation balance” (TSB – meaning all of your super, in all accounts, in accumulation and in pension phase) is under $3 million, the new additional tax would not apply.

The Division 296 measure would apply another 15% tax on a portion of estimated “earnings” relating to your TSB that’s over $3 million. This tax would be charged to you personally, rather than to the super fund. The “earnings” calculation is quite complicated, and doesn’t reflect the actual earnings in your fund (which is why we’re using quotation marks for “earnings”).

For example, if you start the year with a $3 million property in your super fund, and it’s worth $3.5 million by the end of the year, a portion of the $500,000 unrealised capital gain would be taxed to you personally. If this was the only asset in all of your super, and you made no contributions or withdrawals during the year, and received no actual investment earnings, the Division 296 tax calculation could look something like this:

TSB minus $3 million threshold: $3,500,000 – $3,000,000 = $500,000

Percentage of TSB that the excess represents: $500,000 / $3,500,000 = 14.29%

Proportional calculation to get Division 296 taxable earnings: $500,000 × 14.29% = $71,450

Explanatory Memorandum

Client – MAY 2025

Newsletter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 21 February 2025.

Upskilling? You may be able to claim your self-education expenses – If you’ve thought about undertaking professional development this year, you may be able to claim some of your expenses in your 2024–2025 tax return.

Beyond the booking: tax implications for short-term rentals of your home – Platforms like Airbnb have made it easier to earn extra income from your home, but many Australians are unaware of the tax implications.

Sole trader or company: what are the tax differences? – Tax considerations are vital in deciding which business structure is most suitable for you.

Keeping your super account secure – In the wake of recent cyber-attacks on several large Australian super funds, you might be wondering how to protect your retirement savings.

What payday super could mean for you – The way superannuation is paid may be about to undergo a significant transformation.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Tax Return Checklists – to assist you in compiling the necessary information before seeing us about your tax returns.

Holidays

The office will be closed on the following days:

Monday 2^nd June – Jewish Holiday

Tuesday 3^rd June – Jewish Holiday

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161
(03) 9509 7033

info@guests.com.au

Upskilling? You may be able to claim your self-education expenses

If you’ve thought about upskilling or undertaking professional development this year, you may be able to claim some of your self-education expenses in your 2024–2025 income tax return.

You incur self-education expenses when you:

take courses at an educational institution (even if you don’t gain a formal qualification);
undertake training provided by an industry or professional organisation;
attend work-related conferences or seminars; or
do self-paced learning and study tours in Australia or overseas.

Your self-education expenses need to have a sufficient connection to your current employment income in order to make a claim. This means that your study must eithermaintain or improve the specific skills or knowledge you use in your current role, or be likely to result in increased income in your current role.

Keep in mind that sometimes only certain subjects or components of your study are sufficiently connected to your work – in these cases, you’ll need to apportion your expenses.

If you meet the eligibility criteria you may be able to claim a deduction for:

tuition, course or seminar fees incurred in enrolling in a full fee paying place;
general course expenses (eg stationery, internet usage);
depreciation on assets like laptops;
transport costs between home or work and your place of study;
accommodation and meals when your course requires you be away from home for one or more nights; or
interest on loans where you use the funds to pay for deductible self-education expenses.

Beyond the booking: tax implications for short-term rentals of your home

In today’s sharing economy, platforms like Airbnb have made it easier than ever to earn extra income by renting out a spare room or your entire home – but many Australians are unaware of the tax implications that come with these arrangements.

When you rent out all or part of your residential property through digital platforms, the ATO requires you to declare this income on your tax return. Keeping meticulous records of all rental income earned is essential, as is maintaining documentation of expenses you intend to claim as deductions. Most property rental arrangements don’t constitute a business in the eyes of the ATO, even if you provide additional services like breakfast or cleaning.

One area where many property owners get caught out is capital gains tax (CGT). While your main residence is typically exempt from CGT, this exemption can be partially lost when you rent out portions of your home. The reduction in your exemption is calculated based on the floor area rented and the duration of the rental arrangement. This is a crucial consideration if you’re thinking of selling your property in the future, as it could significantly impact your tax position.

When it comes to deductions, you can claim a portion of expenses related to the rented space, including council rates, loan interest, utilities, property insurance and cleaning costs. The deductible amount depends on both the percentage of the property being rented and the duration of the rental period throughout the financial year. Platform fees or commissions charged by services like Airbnb are often 100% deductible, providing some relief against your rental income.

You’ll need to maintain statements from rental platforms showing your income, along with receipts for any expenses you plan to claim. Without proper documentation, you risk having legitimate deductions disallowed during an ATO review or audit, potentially leading to additional tax liabilities.

The ATO has intensified its focus on all aspects of the sharing economy, particularly short-term rental arrangements, and has sophisticated data-matching capabilities with third-party platforms like Airbnb. This means they can identify discrepancies between what’s reported on your tax return and what the platforms’ records show.

Sole trader or company: what are the tax differences?

You may be starting out in business and trying to decide whether to become a sole trader or to set up a company. Alternatively, you may already be an established sole trader and considering switching to become a company. Tax considerations are vital in deciding which of the two business structures is most suitable for you.

The first practical difference is in relation to your tax return. As a sole trader, you simply add your business income and expenses to a separate Business and professional items schedule in your individual tax return that you lodge each year.

For a company, there’s a separate annual tax return, and tax to pay on the company’s income. Companies are subject to annual reviews by the Australian Securities and Investments Commission (ASIC), so financial records must clearly show transactions and the company’s financial position, and allow clear statements to be created and audited if necessary. A number of strict legal and other obligations need to be met.

Tax returns for a company must clearly list the income, deductions and the liable income tax of the company. Also, directors and any employees of a company must lodge their own individual tax returns.

There’s no tax-free threshold for companies – they simply pay tax on the amount they earn. However, for sole traders, whose tax is assessed as part of the individual’s personal income, $18,200 is the tax-free threshold.

For all companies that are not eligible for the lower company tax rate, the full company tax rate of 30% will apply.

To be eligible for the lower company tax rate of 25%, the company needs to meet strict requirements to be a base rate entity. One of the tests is that your company’s aggregated turnover for the relevant income year must be less than the aggregated threshold for that year – which since 1 July 2018 has been $50 million a year.

Both sole traders and companies can:

register for goods and services tax (GST) if your GST turnover is $75,000 or more, or you’d like to claim fuel tax credits; and regardless of your turnover, you must register for GST if you provide taxi, limousine or ride-sourcing services; and
employ people, and if the business’s gross wages exceed the threshold set by your state or territory, then you will have to pay payroll tax.

Both types of business also need to pay capital gains tax (CGT) if a capital gain has been made, but sole traders may be able to reduce this gain by what are known as the discount and indexation methods. The latter may also be used by some companies.

If your employees in either business structure receive a fringe benefit then you may also need to pay fringe benefits tax (FBT).

Keeping your super account secure

In the wake of recent cyber-attacks on several large Australian super funds, you might be wondering how to protect your retirement savings.

The past few years have seen significant data breaches from well-known Australian companies outside of the superannuation sector, exposing a huge amount of consumer personal identity information. The cyber-attacks on superannuation funds reportedly used a technique called “credential stuffing” where cybercriminals used personal information stolen in previous data breaches (like email addresses and passwords) to attempt to access member accounts.

The attacks were timed for the early hours of the morning when most account holders would be asleep and unlikely to notice suspicious login attempts or account changes, and targeted members in the pension drawdown phase who are able to request lump sum withdrawals.

Most funds indicated that their member accounts and retirement savings were secure and that members had not lost any money following the attacks. One super fund revealed a small number of members had lost a combined $500,000 during the cyber-attack, but said it would make remediations out of fund reserves.

Here are some practical steps you can take to help keep your super safe:

Keep track of your super account: The best defence is regular monitoring. Check your balance periodically, verify employer contributions are coming through, review your insurance cover, examine your annual statement, and ensure your contact details are current.
Upgrade your passwords to passphrases: Never reuse passwords across different accounts. Instead, create a passphrase, which is a sentence or mix of four or more words that’s easy for you to remember but difficult for others to guess. Include a combination of upper and lowercase letters, symbols and numbers, and aim for at least 14 characters.

Enable Multi-Factor Authentication (MFA): MFA adds an extra layer of protection by requiring two or more verification methods to access your account. This typically combines something you know (password/PIN), something you have (mobile device/security token), or something you are (fingerprint/facial recognition). Check if your super fund offers MFA and enable it if available.
Protect your devices: Secure all devices you use to access your super account. Use strong passwords or passcodes, set up biometrics where possible, enable auto-lock when not in use, and activate “find your device” services so you can lock or wipe your device if it’s stolen.
Be wary of unsolicited communications: Take your time to verify the identity of anyone contacting you unexpectedly. Don’t click links in suspicious emails or texts. Contact your fund directly using the official contact details from their website.
Report suspicious activity: Alert your super fund immediately if something doesn’t seem right with your account or if you receive suspicious communications.

What payday super could mean for you

The way superannuation is paid may be about to undergo a significant transformation. The Labor government’s proposed “payday super” reforms would require employers to pay employees’ superannuation contributions within seven calendar days of every payday. Draft laws have been released for comment, and payday super is intended to apply from 1 July 2026, it’s important to understand what this could mean for you.

According to the ATO, while most employers do the right thing by their employees, an estimated $5.2 billion in super went unpaid in 2021–2022. The change to payday super is designed to improve the management of super payments and simplify payroll arrangements, reduce unpaid super incidents, and ultimately enhance retirement savings for Australians.

For employers, transitioning to payday super represents a shift in administrative processes. Some key considerations:

From 1 July 2026, you’d need to ensure super contributions reach your employees’ funds within seven calendar days of their payday, regardless of whether you pay weekly, fortnightly or monthly.
The draft legislation introduces “qualifying earnings” (QE) which equates to the current “ordinary time earnings base”. QE will be used to calculate both super contributions and any shortfall charges. Any shortfall charges are currently calculated using the larger salary and wages figure.
The ATO’s Small Business Superannuation Clearing House (SBSCH) would close from 1 July 2026, so employers who use it would need to transition to suitable payroll software.

Please use our 2025 tax return checklist link below.

Tax Return Checklist

For your convenience, read the memorandum below

Explanatory Memorandum

Client Alert – March 2025

Newsletter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 21 February 2025.

ASIC warns of scammers impersonating Bunnings with fake investment bonds – If you’ve spotted what looks like an amazing investment opportunity from Bunnings recently, beware.
Claiming tax deductions for vacant land – You need to meet a number of strict conditions to claim interest payments on relevant loans, land taxes, council rates and maintenance costs.
Made a mistake charging GST? Don’t panic – If you realise you’ve incorrectly charged GST on a sale, there are steps you can take to rectify the situation.
Making smart super investment choices – It’s essential to understand the different types of investment options and their associated risks to ensure you choose the one that’s right for you.
General transfer balance cap increases to $2.0 million – If you start your retirement phase income stream on or after 1 July 2025, your personal transfer balance cap will be set at $2.0 million.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Holidays

The office will be closed on the following day:

Monday 10^th March – Labour Day

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

ASIC warns of scammers impersonating Bunnings with fake investment bonds

If you’ve spotted what looks like an amazing investment opportunity from Bunnings recently, beware! The Australian Securities and Investments Commission (ASIC) has issued an urgent warning about scammers impersonating the retailer to promote fake “sustainability investment bonds”. These scammers claim that the investments will have suspiciously high returns (up to 9%) and are protected by the government, but this is entirely false.

The scam targets people through fake websites and direct spam emails, posing as a responsible entity or broker. The website features Bunnings branding and hyperlinks that direct back to the retailer’s genuine webpage. However, Bunnings does not offer bonds or any other investment products. Legitimate bonds are traded through licensed financial institutions, not retailers.

To avoid falling victim to scams like this one, remember the three key steps: stop, check and protect:

Stop and think before acting.
Check if the investment is legitimate and if the person or entity offering it is licensed or authorised to do so.
Protect yourself by acting quickly if something feels wrong: contact your bank to stop any transactions and report any suspicious activity to Scamwatch.

Broadly speaking, bonds are generally considered a safer investment compared to stocks, offering regular interest payments. They are issued by governments or corporations, and when held to maturity, they return the face value of the bond.

If you’re interested in investing in bonds, visit the Moneysmart website to learn more about the different types, including government bonds and corporate bonds. You can also check the investor alert list there to see if the company or entity offering the investment is legitimate.

To report a scam or find more information about scams, visit the National Anti-Scam Centre’s Scamwatch website at www.scamwatch.gov.au.

Claiming tax deductions for vacant land

Hoping to claim tax deductions on your vacant land? You need to meet a number of strict conditions to claim for costs such as interest payments on relevant loans, land taxes, council rates and maintenance costs.

So, what is vacant land? To satisfy the ATO, there are two basic tests:

the land doesn’t contain a substantial and permanent structure; or
if it does, then the structure needs to be a residence that was constructed or substantially renovated while the owner held the land, but that residence either can’t lawfully be occupied, or hasn’t yet been rented or made available for rent.

Examples of a substantial and permanent structure include a homestead on a farm, a commercial garage, fencing, a silo or a woolshed. Conversely, a residential garage or shed, pipes and powerlines, residential landscaping or a letterbox are not seen as substantial and permanent structures.

A big shift in the tax approach to vacant land came with new rules introduced on 1 July 2019. These rules deny tax deductions claimed for costs incurred while owning vacant land, except in quite specific cases. Before the change of rules, owners of vacant land could claim a deduction for the costs of holding the land, if it were held for income-producing purposes or for carrying on a business to produce income.

There are three situations that will allow you to claim deductions on vacant land. You will be able to claim if:

you are a particular type of entity (eg a corporate tax entity, a superannuation plan or a managed investment trust);
the land is used in business or leased to another entity for their business – but in this case the land must not contain an existing residence or one under construction; or
the land is used by you, an affiliated entity or your spouse in the business of primary production, as long as there’s no residence in existence or being constructed on the land.

If your land is considered vacant land but these particular situations don’t apply, then you will not have the opportunity to claim any deductions.

Importantly, the ATO recognises that exceptional circumstances outside your control may occur (eg a natural disaster or major building fire) resulting in the loss of the structure on your land, or that structure being disregarded. Under those circumstances, an exemption may apply, allowing deductions for holding costs of vacant land to be claimed for a limited period.

Made a mistake charging GST? Don’t panic

As a small business owner, you know how important it is to get your GST right. If you’ve realised you’ve incorrectly charged GST on a sale, don’t panic – there are steps you can take to rectify the situation.

First, let’s look at how this might have occurred:

You treated something that’s not actually a sale as a taxable sale.
You treated a GST-free or input taxed sale as a taxable sale.
You miscalculated your GST liability, resulting in a higher amount reported on your business activity statement (BAS).

So what happens now? The key factor is whether you’ve passed on the excess GST to your customer.

In most cases, if you’ve charged GST and issued a tax invoice, it’s considered to have been passed on to the customer. In this situation, the excess GST is treated as correctly payable under the law, and the ATO cannot refund it to you directly.

Your options are to:

Reimburse your customer: If you choose to reimburse the customer for the excess GST, you can make a decreasing adjustment on your next BAS to recover the amount. Your customer, if GST-registered, will need to make a corresponding increasing adjustment.
Request a discretionary refund: In limited circumstances, you can apply to the ATO for a discretionary refund of excess GST that hasn’t been reimbursed to the customer. However, this is only granted in very specific situations where it wouldn’t result in a “windfall gain” for your business.

If you have clear evidence that you didn’t pass on the excess GST to your customer (which is rare), you can treat this as a GST error. You have two options: to correct it on a later BAS, or to revise the earlier BAS where the error was made.

Correcting GST errors on a later BAS is often simpler than revising an earlier period. However, this option’s only available if the later BAS is lodged within the review period for the earlier period when the error was made. For most small businesses (GST turnover under $20 million), you can correct debit errors up to $12,500 within 18 months of the due date of the original BAS. Remember too that you can’t correct an error to claim additional GST credits if the four-year time limit for claiming those credits has expired.

If you’re ever in doubt about your GST obligations or how to handle a specific situation, it’s best to consult a qualified tax professional or contact the ATO directly for guidance.

Making smart super investment choices

Choosing the right investment option for your superannuation is important for your retirement savings. It’s essential to understand the different types of investment options and their associated risks to ensure you choose the one that’s right for you.

Super funds typically offer a range of premixed investment options that usually have different asset allocations:

Growth: These options primarily invest in shares or property and aim for high returns over the long term. They come with higher probability of short-term losses, so they’re generally suited to people with a longer investment horizon.
Balanced: With about 70% in shares and property, balanced options strive for moderate returns with less risk than growth options. They offer a middle ground for investors who seek growth but prefer less volatility.
Conservative: Investing primarily in fixed interest and cash, these options focus on preserving capital with lower returns.
Cash: With 100% investment in cash or equivalent, these options offer stability and capital preservation, suitable for very risk-averse individuals or those close to accessing their funds.
Ethical: These investments exclude companies that don’t meet certain ethical standards and vary in market risk, allowing you to align your investments with your personal values.

Some super funds offer single asset class investments (eg Australian shares or international shares) and you can choose what percentage you invest in each asset class yourself. Some “platform” style funds also let you pick direct investments. This can include investing in individual shares, exchange-traded funds (ETFs) or term deposits. Direct investing like this is not restricted to just self-managed superannuation funds.

Many super funds also offer lifecycle investment options, which automatically reduce your exposure to higher-risk growth assets as you age. These can be a good choice if you want to take a hands-off approach to your investments.

It’s important to consider your risk profile – essentially, your comfort level with potential investment losses in pursuit of returns. Here are some considerations:

Risk tolerance: Determine how much market risk you’re willing to take. Are you comfortable with the possibility of short-term losses for higher long-term gains, or do you prefer stability?
Investment horizon: The amount of time before you access your super can influence your risk tolerance. Longer horizons may allow for more aggressive investments, while shorter ones might necessitate a conservative approach.
Standard market risk measure: Super funds provide a standardised risk rating that predicts how often an investment might deliver a negative return over 20 years. This measure helps compare the risk levels of different investment options.

Overall, choosing the right investment option for your super requires careful consideration of your individual circumstances and goals. Resources such as ASIC’s Moneysmart website can help you make an informed decision, and many super funds offer free guidance. It’s also a good idea to consider getting professional advice, for example from a financial adviser.

General transfer balance cap increases to $2.0 million

The December 2024 Consumer Price Index (CPI) number has been released, confirming that the superannuation general transfer balance cap will increase by $100,000 to $2.0 million for the 2025–2026 income year.

The transfer balance cap was introduced in 2017, and is a lifetime limit on the amount of superannuation that you can transfer into one or more retirement phase income streams. Earnings on superannuation in the retirement phase are currently tax-free and income or withdrawals after age 60 are also generally tax-free. The cap was introduced to more equitably distribute superannuation tax concessions and ensure that the superannuation system is sustainable over the long term.

Unlike other superannuation caps, such as contribution caps, the general transfer balance cap is not indexed in line with Average Weekly Ordinary Time Earnings (AWOTE), but is annually adjusted based on CPI in $100,00 increments.

The cap was $1.6 million from 2017 to 2021; $1.7 million from 2021 to 2023; $1.9 million from 2023 to 2024 and will be $2.0 million from 2025–2026.

A personal transfer balance cap applies to you as an individual when you start a retirement phase income stream for the first time. Your personal transfer balance cap will equal the general transfer balance cap at that point in time. So, if you start your retirement phase income stream on or after 1 July 2025, your personal transfer balance cap will be set at $2.0 million.

If you started an income stream before 1 July 2025, depending on the date, you would have a personal transfer balance cap of between $1.6 million and $1.9 million. If you didn’t use the full amount of your personal transfer balance cap at the time, a proportional increase may potentially apply to your personal transfer balance cap on 1 July 2025.

If you exceed your personal transfer balance cap, the excess must be withdrawn from the income stream and taken in cash or transferred back into your superannuation account, and an excess transfer balance tax would need to be paid. The ATO will generally notify you and send you an excess transfer balance determination to let you know you’ve exceeded your personal transfer balance cap.

Using ATO online services via your MyGov account can help you keep track of your personal transfer balance cap and your transfer balance account (including any excess over your cap), recording all the debits and credits that make up your balance.

Client Alert – February 2025

Newsletter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 24 January 2025.

Recovering from a natural disaster: what you need to know about tax – As Australia experiences another summer of unpredictable weather patterns, it’s essential to be prepared for the unexpected.
Changes coming for buy now pay later services – If you’re one of the millions of Australians who use BNPL services, important
changes are coming that will give you stronger consumer protections from 10 June 2025.
ATO launches its small business focus areas for 2025 – The ATO has outlined specific areas of concern to help you avoid
common pitfalls and manage your tax obligations effectively.
ATO warns about GST refund fraud: check your arrangements – The ATO-led Serious Financial Crime Taskforce has issued a warning to businesses against trying to cheat the tax and super system by committing GST fraud.
How tax works in Australia’s superannuation system – Australia’s super system plays a vital role in ensuring financial security for individuals in retirement.
Super legacy pensions: regulations offer window to exit – Regulations that came into effect in December 2024 allow thousands of SMSF members to exit legacy income streams at any stage until 7 December 2029.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

Recovering from a natural disaster: what you need to know about tax

As Australia experiences another summer of unpredictable weather patterns, it’s essential to be prepared for the unexpected – natural disasters like fires, floods, earthquakes and cyclones can turn your world upside down. While you’re focused on rebuilding and recovery, tax may be the last thing on your mind, but understanding the implications of assistance payments and insurance payouts can help you make informed decisions.

When you receive an insurance payout after a disaster, whether it’s taxable depends on the type of asset involved:

Your home: If the insurance payout is for your main residence, it’s generally not taxable.
Personal assets: Payouts for personal items like household goods, furniture and private vehicles are generally not taxable.
Rental properties and income-producing assets: If the insurance payout relates to a property used to produce income, it may have tax implications. For instance, if part of your home was used for a business, such as a home office, the insurance payout might affect your capital gains tax (CGT) calculations.
High-value personal assets and collectables: Special rules apply to personal assets over $10,000 and collectables over $500. If the payout exceeds the original cost, it might be taxable.
Business assets: For business owners, insurance payouts for damaged or destroyed business assets (like equipment or inventory) are usually taxable and need to be reported as income.

If you’re planning to repair or rebuild your home, or if you decide to sell your property after a disaster, here’s what you need to know:

Main residence CGT exemption: If you rebuild your home, move back in as soon as practicable and live there for at least three months before selling, the property can remain exempt from CGT. This exemption also applies if you sell the land without rebuilding, provided the destroyed property was your main residence before the disaster.
Engaging contractors: It’s important to ensure that any builders or contractors you hire are licensed and genuine. Check their Australian Business Number (ABN) and request written quotes and contracts to protect your rights.

The Australian and state and territory governments offer various disaster assistance payments, such as the Disaster Recovery Allowance (DRA), which provide temporary income support to those affected by disasters. These payments are generally not taxable, but it’s important to understand the relevant eligibility criteria and application processes, and check with the specific agency providing the assistance or with your tax professional to confirm the tax status of any payments you receive.

Changes coming for buy now pay later services

If you’re one of the millions of Australians who use buy now pay later (BNPL) services, important changes are coming that will give you stronger consumer protections from 10 June 2025. BNPL services will soon be regulated more like traditional credit products such as credit cards. Previously, BNPL services weren’t regulated under the National Consumer Credit Act, leaving a gap in consumer protection. But, under new laws passed in late 2024, all BNPL providers will need to hold an Australian credit licence and comply with consumer protection requirements.

This means your BNPL provider will need to:

hold a credit licence or have applied for one by 10 June 2025;
be a member of the Australian Financial Complaints Authority (AFCA);
follow responsible lending practices; and
meet other consumer protection requirements.

The new framework recognises that BNPL services are generally lower-risk than traditional credit products. Most BNPL arrangements will be regulated as “low cost credit contracts”, with modified requirements that balance consumer protection with the unique features of BNPL services.

From 10 June 2025, you can verify if your BNPL provider is properly licensed using the Australian Securities and Investments Commission’s (ASIC’s) Professional Registers Search.

These reforms aim to strike a balance between protecting consumers and maintaining the innovation and competition that BNPL services bring to the credit market. Stay informed about these changes to make the most of your BNPL services while keeping your finances healthy.

ATO launches its small business focus areas for 2025

Understanding the ATO’s focus areas for 2025 is essential to ensuring your business remains compliant and successful. The ATO has outlined specific areas of concern to help you avoid common pitfalls and manage your tax obligations effectively.

Business income is not personal income

It’s important to understand that your business’s money and assets are not your personal funds. This distinction is vital for maintaining accurate financial records and avoiding penalties. The ATO is particularly vigilant about businesses using company funds for personal expenses without proper documentation. Familiarise yourself with Division 7A rules to prevent common errors, such as failing to declare interest on loans or not meeting repayment deadlines.

Deductions and concessions

Claiming deductions and concessions accurately is another key focus. The ATO sees frequent errors in the application of small business CGT concessions and non-commercial business losses. Ensure you’re eligible for any concessions you claim and that all criteria are met. Misreporting can lead to amended assessments, repayments and potential penalties.

Operating within the system

The ATO is committed to ensuring all businesses operate within the legal tax framework. Risky behaviours such as not declaring all income, over-claiming expenses or using business funds for personal gain are under scrutiny. Poor record-keeping and cash flow management can also attract attention. The ATO encourages businesses to develop strong compliance habits from the outset to avoid these pitfalls.

If the ATO identifies issues within your business, they may contact you or your tax professional for clarification. Depending on the severity, this could involve pre-issue contacts, direct communication or moving your business to more frequent reporting periods. In cases of deliberate noncompliance, firmer actions such as audits, penalties and even legal sanctions may be applied.

ATO warns about GST refund fraud: check your arrangements

The ATO-led Serious Financial Crime Taskforce (SFCT) has issued a warning to businesses against trying to cheat the tax and super system by committing GST fraud. While seeking ways to optimise your tax position is legitimate, it’s important to steer clear of arrangements that could lead you into fraudulent territory. The recent warning highlights the dangers of related-party structuring arrangements that exploit GST rules, noting that getting caught can result in significant penalties.

The schemes of concern involve complex arrangements between related parties, creating artificial transactions to claim high-value GST refunds. This can include false invoicing, misaligned GST accounting methods and duplicating GST credit claims for non-existent transactions.

While some business owners may unknowingly get involved in these practices, believing them to be legitimate tax strategies, the reality is that these arrangements are fraudulent. The SFCT is actively working to identify and prosecute those involved in such schemes.

The ATO has issued several reminders to help businesses avoid involvement in fraudulent activities:

Registering for an Australian Business Number (ABN) and applying for GST refunds when you’re ineligible is fraud.
The ATO does not offer loans or administer COVID disaster payments.
If you’re not operating a business, you don’t need an ABN or to lodge a business activity statement (BAS).
Backdating business registrations to apply for refunds is a red flag.
False declarations can affect eligibility for other government payments.
Sharing your myGov credentials can lead to identity theft.

If you suspect you’ve unintentionally become involved in a GST fraud scheme, it’s vital to act swiftly. The ATO encourages voluntary disclosures, which can lead to reduced penalties. Corrective actions include revising activity statements, cancelling fraudulent ABN registrations and setting up repayment arrangements.

How tax works in Australia’s superannuation system

Australia’s super system plays a vital role in ensuring financial security for individuals in retirement. However, how superannuation is taxed can appear complex.

In Australia, superannuation is taxed at three main points: contributions, investment earnings and withdrawals. This structure is known as a TTE (taxed, taxed, exempt) system: contributions to the superannuation fund are taxed and the investment earnings within the fund are also taxed, but withdrawals made during retirement are generally exempt from tax. That is, in Australia’s system:

Contributions, including those made by employers under the super guarantee (SG) and voluntary concessional contributions, are taxed at a concessional rate of 15%. This is lower than the rates that apply to most other forms of income, providing a tax advantage.
Earnings generated from fund investments during the accumulation phase are also taxed at a flat rate of 15%. This is beneficial because it’s lower than the tax rates that typically apply to investment income earned outside of superannuation.
Withdrawals made during retirement are generally tax-free. This is intended to enhance the appeal of building super savings over your working life, ensuring you have a tax-effective income stream in retirement.

Australia’s approach to taxing superannuation is somewhat unique compared to many other countries, which often use an EET (exempt, exempt, taxed) model: contributions to the retirement fund are exempt from tax and the earnings within the fund are also exempt, but withdrawals made during retirement are taxed.

Taxing only at the point of withdrawal, as in an EET system, means individuals don’t need to worry about tax on contributions or on investment earnings within their super fund during their working life, but must pay the tax once they retire and access their savings.

The Australian model was designed to generate government revenue sooner, with the concessional tax rates on superannuation contributions and earnings intended to encourage people to save consistently throughout their working life. The steady flow of tax revenue from contributions and earnings helps provide a more predictable and stable source of funding for government budgets over time. Australia’s TTE system also offers benefits from immediate tax concessions on your super contributions, which can reduce your current taxable income and provide immediate financial relief.

The tax-free status of withdrawals in retirement makes Australian super an attractive savings vehicle and simplifies financial planning in retirement. This can make it easier for retirees to manage their finances without worrying about tax liabilities on their retirement income.

Super legacy pensions: regulations offer window to exit

For legacy lifetime, life expectancy and market-linked superannuation income stream products that generally commenced prior to 20 September 2007, the shackles have finally been released but care is still required.

Regulations that came into effect on 7 December 2024 allow thousands of self-managed super fund (SMSF) members to exit legacy income streams at any stage until 7 December 2029.

Before the introduction of the amending regulations, these legacy products – also known as non-commutable products – couldn’t be converted to a lump sum, effectively trapping pensioners in their SMSF.

Legacy products were originally introduced to offer retirees a guaranteed income for life or for a set term. This was good in some ways, but very restrictive strategically as the products could not respond to changing individual circumstances, market conditions and other legislative reforms.

During the five-year grace period that the amending regulations offer, retirees can exit these income streams without the previous heavy penalties and with the options of fully withdrawing their funds or moving them into a new income stream or an accumulation account.

There is further good news: the new reserve rules last indefinitely – not just for five years. However, it may be prudent to not to jump in yet if a person’s legacy pension was established for social security purposes. A new legislative instrument will ensure these pensions receive the proper treatment under the social security law.

If a person has already made some reserve allocations in 2024–2025 under the “old” rules, both the old and new rules will actually apply this year depending on when they made the allocation. But it’s important not to assume everything allocated in 2024–2025 is covered under the new rules!

Note also that SMSF members with a legacy pension may need to give the amending regulations consideration ahead of the proposed Division 296 rules from 1 July 2025. This is because Division 296 may count certain reserve allocations as part of the member’s superannuation earnings under the proposed additional 15% tax for super account balances above $3 million.

Client Alert – December / January 24/25

Newsletter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 25 November 2024.

The next edition will be published in February 2025. We wish you all the best for the festive season and new year.

Understanding the Australian Government’s plan for cash and cheques – As digital payments become increasingly prevalent, the government has announced it’s taking significant steps to modernise the nation’s payment system.

Proposed changes to HELP loans could mean lower repayments in 2025 – If you’re one of the millions of Australians with a HELP debt, you might be wondering how the government’s proposed changes loans could affect you.

Understanding the Medicare levy and Medicare levy surcharge – Navigating the Australian tax system can be challenging, especially when it comes to understanding the Medicare levy and the Medicare levy surcharge.

FBT and tax considerations for end-of-year parties and gifts – As the end-of-year season approaches, it’s a great time to celebrate with your employees and show appreciation for their hard work throughout the year; however, it’s essential to understand the potential tax implications.

Managing your business’s tax debts – Facing a tax bill is a common challenge for many Australian businesses, and the ATO has recently shifted to a more active approach to debt recovery.

Spouse contribution splitting: a strategic approach to retirement planning – As retirement approaches, couples often discover a significant imbalance in their superannuation accounts. Addressing it proactively can be beneficial for various retirement strategies.

Super, KiwiSaver and the Trans-Tasman Retirement Savings Portability Scheme – If you’re thinking of making a permanent move between New Zealand and Australia, what do you do about your superannuation fund or KiwiSaver scheme?

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

OFFICE HOURS

Our office will be closed from 5pm Thursday,19^th December 2024 and will re-open at 9.00am on Monday, 6^th January 2025.

Contacts for Partners: –

Andrew Goldberger Mobile No. 0419 155 373

Mory Kalkopf Mobile No. 0405 642 458

Abraham Paluch Mobile No. 0418 542 606

Boruch Baker Mobile No. 0418 333 922

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

Understanding the Australian Government’s plan for cash and cheques

As digital payments become increasingly prevalent, the Federal Government has announced it’s taking significant steps to modernise the nation’s payment system while working to ensure that no one’s left behind. This involves maintaining the use of cash for essential transactions and phasing out cheques in a gradual manner. The government says it intends to consult extensively with stakeholders, including small businesses and people in regional communities, to develop a cash mandate that’s both practical and inclusive

Despite the rapid adoption of digital payment methods, cash remains an essential part of the Australian economy. Approximately 1.5 million Australians rely on cash for over 80% of their in-person transactions. The government’s plan to mandate cash acceptance for essential goods and services such as groceries and fuel ensures that these individuals can continue to participate fully in the economy.

The use of cheques has seen a dramatic decline, with a 90% reduction over the past decade. As digital payment options become more accessible and preferred, the government has set a timeline to phase out cheques entirely by 2029. Cheques will no longer be issued after June 2028 and will cease to be accepted by September 2029. The government expects banks to play a crucial role in supporting cheque users by facilitating a smooth transition to alternative payment methods.

For individuals who prefer cash or still use cheques, these changes may seem worrying. However, the government says its approach is designed to ensure that everyone can continue to participate fully in the economy, regardless of their preferred payment method. By mandating cash acceptance for essential purchases and providing a long lead time for the phase-out of cheques, the government is taking steps to ensure a smooth transition.

The consultation process offers an opportunity for people and businesses to voice any concerns and help shape the future of Australia’s payments system. Whether you’re concerned about privacy and digital security, or simply prefer traditional payment methods, staying informed and engaged is crucial as these changes unfold.

Proposed changes to HELP loans could mean lower repayments in 2025

If you’re one of the millions of Australians with a Higher Education Loan Program (HELP) debt, you might be wondering how the government’s proposed changes to HELP loans could affect you. These changes are subject to the passage of legislation but are proposed to take effect by 1 June 2025.

One of the most significant aspects of the proposed changes is a one-off 20% reduction in all HELP debts. This reduction would be automatically applied by the ATO before the annual indexation on 1 June 2025. For example, if you have a HELP balance of $27,600, you could expect a reduction of approximately $5,520 in your debt.

From 1 July 2025, the minimum income threshold for making compulsory HELP repayments is proposed to increase from $54,435 to $67,000. This means you’ll only start repaying your HELP debt once your income exceeds $67,000. The new repayments will be calculated only on the income above this threshold, but the rates will be higher compared to the current system. Here are the proposed new marginal repayment rates:

income below $67,000: no repayment required;
income between $67,001 and $124,999: 15 cents for each dollar over $67,000; and
income above $125,000: $8,700, plus 17 cents for each dollar over $125,000.

Another crucial change is the proposed capping of the HELP indexation rate. Once the legislation is passed, the indexation rate will be the lower of either the consumer price index (CPI) or the wage price index (WPI). This adjustment will be backdated on all existing HELP, VET student loans, and other similar accounts from 1 June 2023. This means that if your HELP balance was indexed based on the CPI in 2023 and 2024, the ATO will adjust your account to reflect the lower indexation, potentially providing a refund if your balance falls below zero.

Understanding the Medicare levy and Medicare levy surcharge

Navigating the Australian tax system can be challenging, especially when it comes to understanding the Medicare levy and the Medicare levy surcharge. Let’s break these down to help you understand who pays them and how private health insurance affects your tax return.

The Medicare levy is a compulsory charge that helps fund Australia’s public healthcare system. Almost all Australian taxpayers pay this levy, which is 2% of your taxable income. This levy’s generally withheld from your pay by your employer throughout the year, so you may not notice it until tax time.

It’s important to note that having private health insurance doesn’t exempt you from paying the Medicare levy; it only affects your liability for the Medicare levy surcharge.

In certain cases, you might be eligible for a reduction or exemption from the Medicare levy. For instance, if you meet specific conditions such as being a low income earner, foreign resident or having a medical exemption, you may qualify for a reduced rate or full exemption.

The Medicare levy surcharge (MLS) is an additional charge designed to encourage higher-income earners to take out private hospital insurance, thereby reducing the strain on the public healthcare system. Unlike the Medicare levy, the MLS isn’t automatically withheld from your income, but is calculated when you lodge your tax return.

You may be liable for the MLS if your income exceeds the MLS threshold and you, your spouse or your dependent children don’t have an appropriate level of private patient hospital cover for the entire income year. The surcharge rates vary based on your income tier.

Your income for MLS purposes includes several components beyond your taxable income, such as reportable fringe benefits, total net investment losses and reportable super contributions. If you have a spouse, their income’s also considered in the calculation.

To avoid the MLS, you need an appropriate level of private patient hospital cover. For singles, this means a policy with an excess of $750 or less, and couples or families need a policy with an excess of $1,500 or less. Your policy must cover you, your spouse and all dependants for the full income year to avoid the surcharge.

Keep in mind that extras-only cover (such as for dental or optical) and travel insurance don’t qualify as private patient hospital cover for MLS purposes.

FBT and tax considerations for end-of-year parties and gifts

As the end-of-year season approaches, it’s a great time to celebrate with your employees and show appreciation for their hard work throughout the year. However, it’s essential to understand the potential tax implications, particularly concerning fringe benefits tax (FBT), when planning holiday entertainment or gifts for employees.

FBT is a tax employers pay on certain benefits provided to their employees or employees’ associates (like family members). When planning a festive gathering, such as a Christmas party, it’s crucial to determine if your event might attract FBT. Here are some key points to consider:

Location and attendees: If your party is held on business premises during a working day and is only for current employees, you generally won’t have to pay FBT on food and drinks. However, if the event is off-site or includes employees’ associates, you might need to consider FBT, unless the cost per person is under $300 and deemed a minor benefit.
Entertainment and gifts: If you provide gifts alongside the party, remember that gifts under $300 per person can also qualify as minor benefits, exempting them from FBT. However, if gifts exceed this amount, FBT may apply.
Including your clients: Costs related to clients attending your event are not subject to FBT. This means you can invite clients without worrying about FBT implications for their expenses.

When it comes to calculating FBT on entertainment-related benefits, you have a few options:

Actual value method: This method involves calculating the actual cost of the entertainment provided to employees and their associates. If non-employees are involved, you need to apportion the costs accordingly. For example, if you host a dinner where employees and clients are present, only the portion related to employees is considered for FBT.
50:50 split method: If you hire or lease entertainment facilities (such as a corporate box or function room, this method allows you to allocate 50% of the total entertainment leasing expenses to FBT, regardless of whether it’s for employees, clients or others. This can simplify calculations but might not always be the most cost-effective approach.
Meal entertainment valuation: If the entertainment involves meals without recreational activities, you can use meal entertainment valuation methods. Options include the 50:50 split or the 12-week method, where you track meal costs over a period and determine the taxable portion related to employees. Both of these options are based on your expenditure on all meal entertainment for all people during the FBT year.

Important considerations

Recordkeeping: It’s essential to maintain accurate records of all entertainment expenses, including costs, recipients and the calculation methods you’ve used. This documentation supports your FBT calculations and ensures compliance.
Tax deductions and GST credits: Generally, if your event is exempt from FBT, you cannot claim income tax deductions or GST credits for the associated costs. This is important to keep in mind when budgeting for your celebrations.
Gifts to clients: If you’re giving gifts to clients, it’s important to note that these are typically not subject to FBT. However, you may be able to claim a tax deduction for such gifts, provided they aren’t classified as entertainment.

Managing your business’s tax debts

Facing a tax bill is a common challenge for many Australian businesses, and the ATO has recently shifted to a more active approach to debt recovery. However, this doesn’t mean they’re out to get you. The ATO’s primary goal is to work with businesses to manage and clear tax debts effectively.

You or your tax agent can review your income tax assessment notices or use the ATO’s online services to check your current tax debt. You can also contact the ATO directly by phoning 13 28 66 (the business enquiries line).

If you find yourself unable to settle your tax debt in full by the due date, don’t panic. The ATO offers several repayment options, including:

Self-service payment plans: For debts under $100,000, you can set up a plan online. This option is available if you don’t already have an active plan for the same debt and can cover the amount within two years.
Proposing a payment plan: For larger debts or more complex situations, you can propose a tailored payment plan. The ATO provides tools like the Payment Plan Estimator and Business Viability Assessment Tool to help you create a realistic proposal.

Remember, entering into a payment plan means committing to paying future tax obligations on time.

When proposing a payment plan, it’s essential to accurately assess your capacity to pay. The ATO will require specific information depending on your business structure. This may include income sources, expenses, and cash flow information for the past three months.

It’s important to note that the general interest charge (GIC) applies to unpaid tax debts. This rate is currently 11.38% per annum. The government has also recently announced plans to make GIC non-tax-deductible, which would increase the effective cost of unpaid tax debts.

The key to managing your tax debt successfully is proactive communication. If you’re experiencing difficulties, don’t wait for the ATO to contact you. Reach out to the ATO directly, or to your registered tax agent, as soon as possible. By engaging early and honestly, you can avoid more serious potential consequences like director penalty notices, garnishee notices or having your tax debt disclosed to credit reporting bureaus.

Spouse contribution splitting: a strategic approach to retirement planning

As retirement approaches, couples often discover a significant imbalance in their superannuation accounts. This disparity can become crucial when planning for retirement and addressing it proactively can be beneficial for various retirement strategies.

Your individual total super balance as of 30 June each year impacts your ability to implement various super strategies in the following financial year. Key strategies where your total superannuation balance (TSB) is a condition of eligibility include:

making non-concessional contributions when your TSB is below $1.9 million;
utilising carry-forward provisions for large concessional contributions when your TSB is below $500,000; and
claiming tax deductions for personal contributions at ages 67–74 when your TSB is below $300,000.

When planning for retirement, the Age Pension is a consideration for many. The asset test only includes superannuation for individuals of pension age. If there’s a significant age difference between spouses, directing more super to the younger spouse could potentially maximise Age Pension entitlement at retirement.

Spouse contribution splitting allows you to transfer up to 85% of your annual concessional contributions to your spouse’s super account.

Key points:

eligible contributions include superannuation guarantee, salary sacrifice and tax-deductible personal contributions;
the maximum annual split is generally $25,500 (85% of the $30,000 concessional contributions cap for individuals);
only contributions from the previous financial year may be split;
the receiving spouse must be aged under 65, or 60–64 and not retired;
the split is considered a rollover and doesn’t affect the receiving spouse’s contribution caps.

Check if your fund offers spouse contribution splitting, as it’s not mandatory for all funds.

Apply for contribution splitting after the end of the financial year in which the contribution was made. If you roll over or withdraw your entire super balance before the financial year’s end, you can apply to split the contributions within that same year.

Spouse contribution splitting can help couples equalise their superannuation balances and optimise retirement outcomes. Consider your unique circumstances and seek professional advice to ensure this approach aligns with your long-term financial goals.

Super, KiwiSaver and the Trans-Tasman Retirement Savings Portability Scheme

If you’re thinking of making a permanent move between New Zealand and Australia, what do you do about your superannuation fund or KiwiSaver scheme? Under the Trans-Tasman Retirement Savings Portability Scheme, retirement savings can be transferred between Australia and New Zealand.

It’s important to note that the scheme is voluntary – for individuals, Australian superannuation funds and KiwiSaver scheme providers. Check with your Australian super fund or your New Zealand KiwiSaver scheme provider to confirm that they participate. Only APRA-regulated complying super funds and NZ KiwiSaver scheme providers can participate in the transfers, and not all super funds will accept KiwiSaver transfers.

Transfers from Australia to New Zealand

Eligibility: You must be aged under 65 (the current eligibility age for NZ super) and provide evidence of permanent emigration to NZ.
What you can transfer: Your entire balance can be transferred from a complying APRA-regulated super fund; you may also be able to transfer ATO-held unclaimed super money. Exclusions apply for self-managed super funds (SMSFs) and certain interests.
Where you can transfer: To any participating KiwiSaver scheme.
Contribution caps: There’s no limit on how much you can transfer, as the NZ system doesn’t have contribution caps.
Tax on transfers: A transfer from your super fund to a KiwiSaver scheme is not taxed, and withdrawals are tax-free once you are legally allowed to access them. Check for any other possible NZ tax implications with your financial advisor.
Access to funds: Transferred Australian savings can’t be used to buy your first home and can’t be transferred to a third country if you move again. Funds are held in two parts – you can access the Australian component when you reach age 60 and are retired; for the NZ component you’ll need to reach the NZ retirement age (currently 65).
Moving back to Australia: If you decide to move back, you’ll need to find a fund that will accept transfers from a KiwiSaver scheme and be able to demonstrate which savings components previously counted toward your non-concessional contributions cap and the tax-free and taxable components of your savings so they keep that status. If you don’t provide the information, you may have to pay excess contributions tax or additional tax.

Transfers from New Zealand to Australia

Eligibility: You must be aged under 75 and provide evidence of permanent emigration to Australia.
What you can transfer: Your entire KiwiSaver scheme balance can be transferred.
Where you can transfer: To any Australian APRA-regulated complying super accepting KiwiSaver transfers. You can’t make a transfer to an SMSF.
Contribution caps: NZ-sourced savings are treated as non-concessional contributions and are subject to the non-concessional cap. Contributions over the cap might result in excess non-concessional contributions and you might need to release an amount or pay extra tax. Your total superannuation balance also impacts what you can contribute.
Tax on transfers: Transfers from an NZ KiwiSaver scheme to an Australian super fund are not taxed. Withdrawals are tax-free in retirement once conditions of release are met.
Access to funds: KiwiSaver scheme savings can’t be transferred to an SMSF, and they can’t be transferred to a third country if you move again. Funds will be held in 2 parts – to access the Australian component you’ll need to be aged at least 60 and meet the Australian definition of retirement; for the NZ component you’ll need to reach the NZ retirement age (currently 65).
Moving back to NZ: If you decide to move back, you’ll need to find a fund that will accept transfers from an Australian super fund. The rules for transferring super funds to KiwiSaver will apply.

Client Alert – October 2024

Newsletter

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 23 September 2024 and a Due Diligence Checklist to help with various considerations when acquiring a business.

Tax consequences of sharing your home – Rental and some sharing situations will affect your assessable income and what expenses you can claim at tax time.

Unlocking value: subdividing your family home’s land – For retirees living on larger properties, subdividing and selling unused land can be a potential retirement funding strategy.

Employee overpayments: what to do – Unintended overpayments to employees sometimes come to light. If this happens for your business, it’s important to consider all parties’ rights and obligations when deciding what to do next.

Payday super: policy design released – A newly released fact sheet sets out some key elements of the government’s “payday super” policy.

“Super saver” scheme now more flexible for first home buyers – Changes taking effect from 15 September 2024 will improve the process of accessing certain voluntary super contributions to assist with purchasing or constructing a first home.

Accessing super from age 60 to 65 – From 1 July 2024, the rules for accessing superannuation became somewhat simplified: the preservation age to begin accessing benefits is now effectively 60 years.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Holidays

The office will be closed on the following days:

Thursday 3^rd October – Jewish Holiday

Friday 4^th October – Jewish Holiday

Thursday 17^th October – Jewish Holiday

Friday 18^th October – Jewish Holiday

Thursday 24^th October – Jewish Holiday

Friday 25^th October – Jewish Holiday

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

Tax consequences of sharing your home

Homeowners can share their homes in a range of ways – you might have an agreement to rent out a room, offer short stays through a platform like Airbnb, accept money from a friend who sometimes needs a bed, or receive board payments from family members. Some of these situations will affect your assessable income and what expenses you can claim at tax time.

Whether you rent out your whole home or just a room or granny flat, when it comes to lodging your tax return you’ll need to declare the rent you receive as income. Rent and associated amounts (such as bond money or booking cancellation fees) are assessable income no matter the arrangement length, from a single-night booking to an ongoing rental agreement.

You can claim immediate deductions for some expenses related to rental income, while other deductions need to be claimed over time. It’s important to note that rental expenses can only be claimed when your home is rented out or genuinely available for rent. If you only rent out part of your home, only expenses related to that part are deductible.

Where family members or friends who stay in your home pay board and lodging to cover their food and accommodation, this is generally considered a “domestic arrangement” rather than a rental one, so the payments don’t need to be declared as assessable income. Because of this, you also can’t claim tax deductions for expenses related to having the friend or family member staying in your home.

Take care, though: if you have an arrangement with friends or family where you intend to make a profit, or that’s otherwise generally consistent with an ordinary commercial tenancy agreement, simply calling the payments “board and lodging” isn’t enough to avoid the tax implications of receiving rental income. It’s best to seek professional advice if you’re not sure how the ATO might view your particular situation.

Unlocking value: subdividing your family home’s land

Many retirees find themselves cash-poor but asset-rich. For those living on larger properties, subdividing and selling unused land can be a potential retirement strategy to generate funds for income-producing assets. While this approach may suit some circumstances, it’s crucial to understand the capital gains tax (CGT) implications and downsizer contribution limitations.

When you subdivide a block of land, each new block receives a separate title and is treated as a distinct asset for tax purposes. Selling a subdivided block triggers CGT.

Typically, selling a main residence is entirely exempt from CGT if it hasn’t been used for income-producing purposes, but this exemption may not apply to subdivided blocks.

The CGT main residence exemption requires that the capital gain relates to your “dwelling”, which includes your home and up to two hectares of adjacent land used primarily for private or domestic purposes. This two-hectare limit includes the land beneath your home. Consequently, if you subdivide and sell a block of vacant land on a new title, it’s no longer considered part of your dwelling and doesn’t qualify for the CGT main residence exemption.

Eligibility to contribute any sale proceeds to superannuation as a “downsizer contribution” requires the contribution to be equal to part or all of sale proceeds from the sale of a dwelling.

Before proceeding with any subdivision plans, it’s crucial to seek expert advice to ensure you’re making informed decisions that align with your retirement goals and comply with current tax regulations.

Employee overpayments: what to do

Once the end of financial year workload abates and payroll staff have time to have a closer look at what occurred in the previous income year, it’s not unusual for unintended overpayments to employees to come to light. If this happens for your business, it’s important to follow ATO guidance and consider all parties’ rights and obligations when deciding what to do next.

Critically, the first step is to confirm whether the business will seek to recover the overpayment. This should be decided by business management in consultation with human resources, not by payroll staff. If no recovery will be sought then the original payment processing remains as is. Keep a clear record of the decision not to recover the overpaid amount.

If the business will seek recovery, you need to consider whether the overpayment relates to a previous income year, the current income year or both. Remember to communicate clearly with the employee about any adjustments made to their Single Touch Payroll (STP) record as part of recovering overpayments.

For an income year that’s been finalised, the business will need to seek repayment of the gross overpaid amount directly from the employee. The STP record must be amended to reduce the gross by the amount of the overpayment. No tax adjustment should be made.

When the employee later lodges their tax return, the overpayment will no longer be taxable because it’s no longer shown in STP, so they should get back any tax previously withheld on it.

Where an overpayment affects a current income year, the process is to reduce the gross and the tax in STP by the original overpayment. The business then only needs to recover the net amount from the employee.

If the business paid superannuation on the original overpayment, the overpaid super can be used to offset future obligations for the same employee for up to 12 months.

Payday super: policy design released

As part of the 2023–2024 Federal Budget, the government proposed a “payday super” reform. A newly released government fact sheet sets out some key elements of the policy.

From 1 July 2026, instead of the current requirement to pay quarterly, superannuation guarantee (SG) contributions will need to be made on “payday”. This is the date an employer makes an ordinary time earnings (OTE) payment to an employee. When OTE is paid, there’ll be a new seven-calendar-day “due date” for the payment to arrive into an employee’s superannuation fund. Some limited exceptions will apply for small or irregular payments outside the usual pay cycle, and contributions for newly commencing employees.

The SG charge framework will be updated for the payday super environment, including larger penalties for employers who repeatedly do the wrong thing.

Contributions will automatically count towards the earliest possibly payday not yet assessed for SG charge and which still has an outstanding shortfall so employers no longer need to make an election or choose the period for which each late contribution should count.

Other changes include the following:

The deadline for super funds to allocate or return contributions will reduce from 20 business days to three days.
Employer reporting in Single Touch Payroll (STP) will include employees’ OTE and total super liability, ensuring correct identification of the SG.
The ATO’s Small Business Superannuation Clearing House will be retired on 1 July 2026. The ATO will support small businesses in transitioning to suitable payroll software solutions.
Revised choice of fund rules will apply to make it easier for employees to nominate their super fund when starting a new job.
Advertising of super products during onboarding will be limited to MySuper products passing the most recent performance test, to protect employees from poor outcomes.

“Super saver” scheme now more flexible for first home buyers

In welcome news for first home buyers, the government has made changes to the operation of the First Home Super Saver Scheme (FHSSS) to improve its flexibility for users.

The FHSSS allows you to withdraw certain voluntary superannuation contributions from your fund (plus associated earnings) to assist with purchasing or constructing your first home. There are detailed rules governing the amounts you can withdraw, but essentially the scheme enables you to withdraw up to $50,000 of eligible voluntary contributions (plus an earnings amount). Eligible voluntary contributions are those made since 1 July 2017, up to $15,000 per year and capped at $50,000. Saving for a home via the FHSSS can have tax benefits, either as part of a salary-sacrifice arrangement or by using personal deductible contributions.

When you want to access these savings to put towards your first home, you must follow a certain process. This firstly involves requesting a determination from the ATO, which will advise you of your maximum FHSSS release amount. You can then request a release of the funds, receive the funds, and then notify the ATO when you’ve signed a contract to purchase or construct your home – which must generally occur within 12 months of requesting a release of funds. You can request a release of the funds either before you sign the contract or within a 14-day timeframe after signing the contract.

Changes taking effect from 15 September 2024 will improve this process. They include:

expanding the timeframe for requesting a release;
expanding eligibility for requesting a determination; and
allowing more flexibility to amend applications.

The changes also provide an opportunity for prior applicants who were unsuccessful to reapply, even if they now own their home. If you applied to access the FHSSS between 1 July 2018 and 14 September 2024 and were unsuccessful, the ATO will assess your eligibility and, if you’re eligible, contact you to confirm whether you want to request a release.

Accessing super from age 60 to 65

From 1 July 2024, the rules for accessing superannuation became somewhat simplified: the preservation age when you can begin to access your benefits is now effectively age 60. However, until you reach age 65, there are still potential restrictions on how you can access your super. You’ll need to “retire” before you can make lump sum withdrawals from your super account or move it into the favourable “retirement phase” when investment earnings within the fund become tax-free. If you’re aged between 60 and 65 and wish to access some of your super, it’s a good time to re-examine the rules. For anyone born after 30 June 1964, preservation age is age 60. If you are between 60 and 65 years old but haven’t yet retired, you can commence a transition to retirement income stream (TRIS). This allows you to receive a regular income of between 4% and 10% of your pension account balance each year. If you want to access more of your super, or withdraw it as a lump sum, you’ll need to satisfy a further condition of release. This includes reaching age 65, or “retirement”.

Meeting these conditions is also relevant for tax purposes. TRIS payments to a person aged 60 or over are generally tax-free – regardless of whether they are retired or not – but the TRIS itself does not move into the “retirement phase” until a further condition such as retirement (or reaching age 65) is met.

To satisfy the retirement condition, an arrangement under which you were gainfully employed must have come to an end. If you’d already reached age 60 when that position ended, there are no further requirements, and your future work intentions aren’t relevant.

If you hadn’t yet reached aged 60 when the position ended, the trustee of your fund must be reasonably satisfied that you intend never to again become gainfully employed, either on a full-time or a part-time basis. “Part-time” means working for at least 10 hours per week, so you could intend to work for less than 10 hours per week and still meet the “retirement” condition.

Any withdrawal strategy should be carefully planned to ensure you understand the implications of accessing your super. There are many factors to consider, such as the ongoing requirement to withdraw minimum pension amounts each year if you start a pension, implications for your transfer balance account, and interactions with the Age Pension.

Client Alert – September 2024

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 26 August 2024.

Claiming the tax-free threshold: getting it right – If you’re an Australian resident for tax purposes, you don’t have to pay income tax on the first $18,200 you earn each year.

Withholding for foreign residents: an ATO focus area – Does your business make payments of interest, dividends or royalties to any foreign residents? You may be required to withhold tax.

Small business restructure roll-over: tax relief for genuine business restructures – A structured path is available for businesses to reorganise operations, allowing them to better meet financial challenges without prejudicing creditors or engaging in unethical practices.

Super guarantee a focus area for ATO business debt collection – The ATO offers a timely reminder for businesses to ensure they’re meeting their SG obligations.

New “bring-forward” contribution thresholds for 2024–2025 – The increased annual cap on non-concessional super contributions is great news for those who want to maximise their retirement savings.

Is your tennis court or swimming pool subject to land tax? – In January 2020, the Land Tax Act was amended regarding properties not in a rural area. If the above are on a property with a separate title, they become liable to Land Tax.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Holidays

The office will be closed on the following days:

Friday 27^th September – AFL Grand Final Public Holiday

Thursday 3^rd October – Jewish Holiday

Friday 4^th October – Jewish Holiday

Thursday 17^th October – Jewish Holiday

Friday 18^th October – Jewish Holiday

Thursday 24^th October – Jewish Holiday

Friday 25^th October – Jewish Holiday

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161

(03) 9509 7033

info@guests.com.au

Claiming the tax-free threshold: getting it right

If you’re an Australian resident for tax purposes, you don’t have to pay income tax on the first $18,200 you earn each year, from any source. This is called the “tax-free threshold”. If you have more than one job, change employers during the year, have a sole trader side gig or get government payments, it’s important to think about the tax-free threshold and which employer, job or payment you’ll claim it for.

The ATO advises claiming the tax-free threshold once from your “main” payer – typically the job, gig or payment that pays you the most during the year. That payer will not withhold income tax from the first $18,200 they pay you but will withhold tax from payments once your earnings go over the threshold.

At the end of the financial year, the ATO calculates your total income and tax withheld. If not, enough tax has been withheld, you can expect a tax bill. If more tax has been withheld than you owe for your total earnings, you can expect a refund.

When starting a new job, your employer should ask you to complete a withholding declaration.

To claim the tax-free threshold, you must be an Australian resident for tax purposes on the declaration and answer “yes” to the question “Do you want to claim the tax-free threshold from this payer?”. Where you answer “no”, tax will be withheld from all income from that payer.

Avoid claiming the threshold from multiple payers simultaneously unless you’re sure you’ll earn less than $18,200 total for the year. Overclaiming might make your take-home pay higher each pay cycle but will likely mean a tax debt later.

When changing jobs, you can claim the threshold from your new payer even if you have claimed it from your previous one.

If you add a job or side gig that will provide more income than your existing main payer, you can change your claim at any time using ATO online services, via your myGov account.

If you’re earning income outside of employment (eg as a sole trader) you’ll need to pay tax yourself on that income. Consider setting aside a percentage for tax or using pay as you go (PAYG) instalments each time you are paid.

Withholding for foreign residents: an ATO focus area

Does your business or investment structure make payments such as interest, dividends or royalties to any foreign residents? You may be required to withhold tax from these payments. The ATO is currently focusing on ensuring that taxpayers are aware of these obligations.

If these withholding requirements apply to you, you’ll need to lodge a PAYG annual report or an annual investment income report and withhold and pay the correct amount of tax.

Figuring out whether an obligation to pay withholding tax arises from a particular payment can be complex. Assuming your structure is resident in Australia, the starting point is that the withholding tax regime generally applies to interest, dividends and royalties derived by foreign residents, unless an exemption applies. This means the withholding tax obligation arises whether you make the payment to the foreign resident, credit it to their account, or deal with the payment on their behalf or at their direction. (Certain payments can also be captured if your structure is not resident but has a permanent establishment in Australia.)

However, a number of exemptions apply. These can be technical in operation, so it’s important to seek advice specific to your circumstances if you make any payments to non-residents.

The ATO is alert to payers who have not withheld and paid amounts (or have withheld and paid incorrect amounts), incorrectly relied on an exemption or treaty relief, or misclassified deductions for interest or royalty payments to an offshore entity.

Small business restructure roll-over: tax relief for genuine business restructures

With the latest statistics showing a significant rise in liquidations and with the ATO’s focused efforts on debt collection, small businesses face significant financial pressures. However, the answer isn’t to evade responsibilities or take shortcuts – business restructuring has to be done properly and in compliance with the relevant laws. The small business restructure roll-over (SBRR) provides a legitimate, structured path for businesses to reorganise their operations, allowing them to better meet these challenges without prejudicing creditors or engaging in unethical practices.

To qualify for the SBRR, each party to the transfer must meet the small business entity definition. A small business entity is defined as an entity with an aggregated turnover of less than $10 million. This includes businesses that operate as a sole trader, partnership, company or trust, provided they meet the turnover threshold. Entities connected with or affiliated with a small business entity also fall under this definition.

The assets being transferred must be active assets, which include CGT assets, trading stock, revenue assets or depreciating assets. Non-active assets, such as loans to shareholders, are not eligible.

The transfer must be part of a genuine restructure of an ongoing business, not an artificial or inappropriately tax-driven scheme, and there must be no change in ultimate economic ownership of the transferred assets.

Opting for the SBRR has several tax implications:

The transfer does not trigger an income tax liability at the time of the transfer.
The transferor is deemed to have received an amount equal to the asset’s cost, and the transferee acquires the asset at this cost.
Potential liabilities like GST or stamp duty must be considered, as they might still apply.
The roll-over does not protect against the application of anti-avoidance rules, ensuring the transaction is not purely tax motivated.

For CGT assets, the transferee must wait at least 12 months to claim the CGT discount on any subsequent sale, and pre-CGT assets retain their status. For trading stock, the roll-over cost is based on the transferor’s cost or value at the beginning of the income year. Depreciating assets allow the transferee to continue deducting the decline in value using the transferor’s method and effective life. Revenue assets are transferred without resulting in a profit or loss for the transferor.

Super guarantee a focus area for ATO business debt collection

The ATO has recently confirmed that collection of business debts – including debts relating to superannuation guarantee (SG), pay as you go (PAYG) withholding and GST – is among its key focus areas. This is a timely reminder for all businesses to ensure they’re meeting their obligations.

The most recent ATO statistics show that although 94% of employers are meeting their SG obligations without ATO intervention, the ATO still raised over $1 billion in SG charge liabilities in the 2022–2023 financial year.

To ensure your business doesn’t incur these extra liabilities, you must pay SG contributions for your employees and eligible contractors on time and to the correct funds. Some contracts and awards may require you to pay contributions more regularly than quarterly.

If you make contributions to a commercial “clearing house”, the contribution is considered to be paid when it’s received by the employee’s fund, not by the clearing house. However, if you use the ATO’s Small Business Superannuation Clearing House, the contribution is “paid” when received by that clearing house.

From 1 July 2026, employers will need to pay SG at the same time as salary and wages (commonly known as “payday super”).

If you miss a payment, taking action promptly is essential to accessing the ATO’s support services and minimising your exposure to penalties. You must lodge an SG charge statement with the ATO within one month of the missed quarterly due date. You can ask the ATO for an extension to the lodgement date, but you must do this before the due date.

You’ll also need to pay the SG charge. This charge is more than the amount of contributions you would have paid if you had paid them on time, and it’s not deductible. The charge is paid to the ATO, not your employee’s fund. General interest charge will accrue on any outstanding SG charge, and the ATO may also issue a director penalty notice if it remains unpaid.

New “bring-forward” contribution thresholds for 2024–2025

You may have heard that the annual cap on non-concessional contributions (NCCs) has increased for 2024–2025. This is great news for superannuation members who want to maximise their retirement savings.

NCCs are your own after-tax contributions, meaning they’re distinct and separate from concessional contributions such as compulsory employer contributions made for you, additional salary sacrifice contributions, and personal contributions you’ve made for which you claim a deduction. From 1 July 2024, the annual cap on NCCs increased from $110,000 to $120,000 due to indexation.

This increase means that the maximum amount that can be contributed under a “bring-forward” arrangement has also increased. A “bring-forward” arrangement allows eligible members to contribute up to three years’ worth of NCCs in a shorter timeframe. This may be an attractive contribution strategy for those with an inheritance, a large bonus payment, or proceeds from the sale of an investment.

If you already commenced a bring-forward arrangement in the last year or two, you won’t get the benefit of the increased NCC cap for that arrangement. However, if you’ve been thinking about commencing one of these strategies, now is great time to consider this further.

You must be aged under 75 at some point in the financial year when you commence a bring-forward arrangement, and your total superannuation balance (TSB) as at 30 June of the previous financial year affects your eligibility.

Be aware that the TSB eligibility limits have changed since last year – and they’ve decreased. So, while the NCC cap and the maximum bring-forward cap have increased, the cut-off points when your eligibility reduces or ceases are lower. Be careful about referring to older advice or information (e.g. online) that is based on the TSB thresholds for 2023–2024.

Client Alert – August 2024

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 25 July 2024.

Regulations coming for “buy now, pay later” market – A Bill currently before Parliament aims to extend the application of the Credit Code to BNPL contracts and establish low-cost credit contracts as a new category of regulated credit.

Deducting gifts and donations: getting it right at tax time – Not all gifts and donations are tax deductible, and special rules apply in some cases. Make sure you know the rules this tax time.

Motor vehicle expenses: which method should my business use? – If your business owns or leases a vehicle that’s used for business purposes, it’s essential to keep proper records to ensure you’re entitled to the maximum deduction for your vehicle expenses.

Time for a superannuation check-up – Your super could be one of the biggest assets you ever have – getting into the habit of checking in regularly can help you stay on top of it and make better choices for your future.

New SMSF expense rules: what you need to know – New rules focus on “non-arm’s length general expenses” – services provided to your SMSF at below-market prices or for free – and the tax impact could be significant.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161
(03) 9509 7033
info@guests.com.au

Regulations coming for “buy now, pay later” market

In recent years, the financial landscape in Australia has been significantly transformed by the advent of buy now, pay later (BNPL) services. These innovative credit products have provided consumers with a convenient and often cheaper alternative to traditional credit forms such as credit cards, small amount credit contracts and consumer leases.

BNPL arrangements typically involve a third-party provider financing consumer purchases of goods and services, with repayments collected in instalments. Unlike traditional credit products, BNPL services generally don’t charge interest but may impose small fees on consumers and service fees on merchants. Australian BNPL transactions were worth around $19 billion in 2022–2023, accounting for approximately 2% of all Australian card purchases.

Currently, BNPL products aren’t regulated under the National Consumer Credit Protection Act 2009 (Credit Act). As a result, providers aren’t subject to responsible lending obligations (RLOs) or other Credit Act requirements, and they don’t need to hold an Australian credit licence. Some of the most common concerns about the BNPL sector include unaffordable lending practices, inadequate complaint resolution and hardship assistance, excessive late payment fees, and a lack of transparency in product disclosures and warnings.

Although BNPL providers adhere to the Australian Finance Industry Association’s voluntary Buy Now, Pay Later Industry Code, which covers approximately 90% of the market, this self-regulation isn’t enforceable by the Australian Securities and Investments Commission (ASIC). Consequently, breaches of the Code don’t attract criminal or civil penalties, highlighting the need for more robust regulatory oversight.

A Bill currently before Parliament aims to extend application of the Credit Code to BNPL contracts and regulate most BNPL contracts as low-cost credit contracts (LCCCs). Once the Bill passes, providers of LCCCs will be required to hold and maintain an Australian credit licence and comply with the relevant licensing requirements and licensee obligations, with some modifications to ensure regulation is proportionate to the relatively low risk posed by LCCCs. The existing RLO framework will also be modified to create an alternative, opt-in framework that scales better with the risks posed to consumers and requires each LCCC provider to develop and review a written policy on assessing whether an LCCC would be unsuitable for the consumer.

Deducting gifts and donations: getting it right at tax time

Have you made charitable gifts or donations in the past financial year? The good news is these items are often deductible, giving many Australians a welcome boost to their tax refund. Make sure you know the rules this tax time.

When gathering your donation receipts, it’s important to understand what can and can’t be claimed as a deduction. The first general rule is that a donation of money of $2 or more may be deducted if the donation was made to a “deductible gift recipient” (DGR). A DGR is an entity that has registered with the ATO as being eligible to receive deductible gifts and donations.

Some charities may not have DGR status, so check if you’re unsure. Many online crowdfunding platforms are also not DGRs, which means you typically won’t be able to claim your donation towards fundraising for individual causes, such as someone’s funeral or medical costs.

The second general rule is that a donation is only deductible if you didn’t receive a benefit in return. This means you can’t make a claim if you received things like raffle tickets or items that have an advertised price, such as toys and food items. However, you may receive a “token” promotional item such as a sticker or lapel pin and still qualify for a deduction. Note that donations to a school’s building fund won’t be deductible if you received benefits such as reduced school fees or a certain placement on a waiting list in return for the donation.

Small cash donations totalling up to $10 don’t require a receipt. However, beyond that you must be able to provide evidence of your claim. You aren’t required to keep an original paper receipt, provided you keep an electronic copy that is a true and clear reproduction. If you don’t have a receipt, you may be able to substantiate the claim with other documentation such as a bank statement evidencing the donation.

If you make donations through a “workplace giving program” operated by your employer, you can simply claim the amount of donations shown in your income statement or payment summary. You can claim this deduction in your tax return regardless of whether your employer has reduced the tax withheld each pay period. In both cases, your gross salary or wages and deductible donations for the year will be the same, but any difference in the tax withheld during the year will factor into your eventual tax refund. Workplace giving programs aren’t the same as salary-sacrifice, as they don’t lower your gross salary or wages.

Motor vehicle expenses: which method should my business use?

If your business owns or leases a vehicle that’s used for business purposes, it’s essential to keep proper records to ensure you’re entitled to the maximum deduction for your vehicle expenses. Running costs like fuel and oil, repairs, servicing, insurance premiums and registration are all potentially claimable, as well as interest payments on a loan to purchase the vehicle, lease payments, and depreciation. However, the method used to calculate your claim depends on your business structure and the type of vehicles you’re claiming for.

If your business operates in a trust or corporate structure, you must use the “actual costs” method for all types of vehicles used in your business. This means you can claim the expenses actually incurred, which requires you to keep receipts.

You can only claim for business-related use, so if you use the vehicle for any private purposes, you must identify the percentage that relates to business use. Keeping a diary that records your business and private use will allow you to justify your claim. Travel between your home and your business is treated as “private” use, unless you operate your business from home and need to travel away from home for business purposes.

If you’re a sole trader (or operating in a partnership that includes at least one individual), the method to use depends on whether the vehicle you’re claiming for is a “car” (a vehicle designed to carry fewer than nine passengers and a load less than one tonne). For non-cars, you must use the “actual costs” method. But for car expenses, you have a choice of which method to use: either the “cents-per-kilometre” method or the “logbook” method.

The cents-per-kilometre method allows you to claim a set rate per kilometre travelled for business use, up to a maximum 5,000 km per year. The current rate for 2024–2025 is 88 cents per business kilometre. The law requires you to make a “reasonable estimate” of your business kilometres, which means you need to be able to show the ATO how you derived your total number of hours.

The logbook method isn’t limited to 5,000 km, but you’ll need to keep more detailed records. A logbook of your business kilometres travelled is required in order to calculate the percentage of total kilometres travelled for business during the year. This is then multiplied by your car expenses. In the first logbook year, you’ll need to record detailed odometer readings for each trip in a 12-week continuous period. This representative period can then be used as the basis for calculating your claim for the year, and for the next four years.

Time for a superannuation check-up

The new financial year has begun, and with it have come some important changes to superannuation from 1 July 2024. With these changes coming into effect, it’s a good time to give your super a check-up. Your super could be one of the biggest assets you ever have, so getting into the habit of checking in regularly can help you stay on top of it and make better choices for your future.

On 1 July 2024, the superannuation guarantee rate increased from 11% to 11.5%. Employer super contributions are calculated on a worker’s ordinary time earnings, for payments of salary and wages. For employers, the maximum super contribution base increased from $65,070 to $62,270 (the limit on what you can earn each quarter before your employer can stop making super guarantee contributions). The concessional super contributions cap also increased from $27,500 to $30,000 and the non-concessional contributions cap increased from $110,000 to $120,000.

The ATO suggests the following steps as a good place to start in giving your super a check-up:

Check your contact details: Make sure your contact details and tax file number (TFN) are up to date with the ATO and your super fund.

Check your super balance and employer contributions: Checking your super balance and keeping track of your employer contributions can be done at any time through ATO online services or your super fund. Your employer should be paying your super at least every three months.

Check for lost and unclaimed super: If you’ve changed your name, address or your job, you may have lost track of some of your super. Lost super is where your super fund hasn’t been able to contact you, or your account is inactive. Unclaimed super is where your fund has transferred lost super to the ATO.

Check if you have multiple super accounts and consider consolidating: If you’ve ever moved jobs, you might have more than one super account. Each account will charge fees and may include insurance, so combining your super accounts may reduce fees, help you pay only for the insurance you need and make your super easier to manage.

Check your nominated beneficiary: Make sure you have a valid death beneficiary nomination with your super fund, as this isn’t covered by your will. Check with your fund if there is an expiry on the nomination – some funds have options where the nominations don’t expire, while most nominations expire every three years. If you don’t have a beneficiary nominated, your fund will follow the law in determining where your super should go.

You should also take a careful look at how your fund is performing and check that you aren’t paying too much in fees. You might also think about evaluating how your super is being invested – does it match your stage in life, how much risk you are willing to bear, or even your ethics and values? If you have insurance cover with your super fund, regularly check that it still meets your needs.

Do you have enough super?

The Association of Superannuation Funds of Australia (ASFA) has developed a “retirement standard” which provides a broad approximation of how much super you need in retirement. As of March 2024, as combined amounts for couples retiring at age 67, ASFA suggests:

$690,000 for a comfortable retirement (providing an income of $72,663 per year); and

$100,000 for a modest retirement (providing an income of $47,387 per year).

These figures assume that you will draw down all your super, receive a part Age Pension, own your home outright and are in good health. While useful as a baseline, your personal needs may differ significantly.

Many people assume that they will just fall back on the Age Pension if there is not enough in their super. This is definitely a safety net; however, you may not be comfortable on the restrictive budget required to get by on the Age Pension. As at 1 July 2024, Age Pension for a couple is $43,752 per year.

For the most accurate assessment of your superannuation needs, it’s best to seek professional advice. Your adviser can consider factors such as your health and life expectancy, inflation and investment returns, wages growth and taxation, and fees and regular contributions. Professional advisers have access to sophisticated tools and can provide customised forecasts based on your unique situation.

New SMSF expense rules: what you need to know

If you manage a self-managed superannuation fund (SMSF), recent changes to tax rules for certain fund expenses could affect you. These changes may even apply to services provided for free. If your fund doesn’t pay market price for services, it could face significant extra tax.

The new rules focus on “non-arm’s length general expenses” – services provided to your SMSF at below-market prices or for free. Income related to these general expenses may be classified as “non-arm’s length income” (NALI) and taxed at 45%. The new rules took effect on 29 June 2024 but are retroactive to 1 July 2018.

Key points to consider

General expenses: The rules apply to general expenses not charged at market price. These are expenses that don’t relate to a specific fund asset, such as accounting fees or investment advice that does not relate to a specific investment (e.g. asset allocation advice).
Trustee roles: As a trustee, under the superannuation law you generally can’t charge for your duties. However, if you provide services for free, or at a significant discount, as a professional (eg accountant, auditor or financial adviser) the NALI rules may apply.

NALI limits: The amount of NALI is capped at twice the difference between the actual expense and the market rate. If no expense is incurred, it’s limited to twice the market rate.

Overall cap: The non-arm’s length component can’t exceed the SMSF’s taxable income (minus assessable contributions plus related deductions).

These new rules could catch out professionals trying to save their SMSF some money. If you’re providing services to your SMSF or getting services at below-market rates, you need to be aware of these rules.

If you’re unsure about how these rules affect your SMSF, it’s best to consult with a tax adviser. They can help you understand if your fund’s expenses are subject to the new rules and advise on any necessary changes.

Client Alert – July 2024

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 24 June 2024.

Tax time scams: be on guard – Using unsolicited contact via SMS, email or on social media, ATO impersonators frequently offer refunds or assistance in resolving tax issues or suggest suspicious activity on a taxpayer’s account.

Tax time 2024: claiming working from home expenses – Claiming work-related expenses is an area where taxpayers frequently make mistakes, and the ATO has flagged it a primary area of focus for tax time 2024.

ATO focuses on rental property owners’ tax returns – ATO data shows the majority of rental property owners are continuing to get information in their income tax returns wrong, even with most using a registered tax agent to complete their tax returns.

Tax time reminders for small businesses from the ATO – The ATO has reminded small businesses of a number of areas they should be thinking about in the lead-up to preparing their tax return.

Scam alert: fake ASIC branding on social media – ASIC reminds consumers that it does not endorse or promote investment training or platforms, doesn’t cold call consumers, and is not associated with any investment offerings.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition. Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Tax time scams: be on guard

Despite preventative approaches by the ATO and the National Anti-Scam Centre (NASC) to take down fraudulent websites and block scam text messages, ATO impersonation scams are on the rise as tax time approaches. Using unsolicited contact via SMS, email or on social media, ATO impersonators frequently offer refunds or assistance in resolving tax issues or suggest suspicious activity on a taxpayer’s account. The ATO recommends not engaging with unsolicited contact and instead looking up the ATO’s contact numbers to verify the genuine nature of the communication.

The creation of NASC, funding for the Australian Securities and Investments Commission (ASIC) and the Australian Communications and Media Authority (ACMA) to take down fake investment websites, and establishing the SMS Sender ID register to stop scammers from spoofing trusted brand names have already had some success: over 5,000 website takedowns occurred and 100 million scam text messages were blocked in the final quarter of 2023. However, the lead-up to tax time still poses a risk – updated figures for May 2024 show a 31% increase in reports of ATO impersonation scams across SMS, email, phone contact and social media channels.

The ATO is working on preventative measures to help the community to recognise legitimate ATO SMS interactions, including removing hyperlinks from all its outbound unsolicited SMSs. Cybercriminals often use hyperlinks in SMS phishing scams, directing individuals to highly sophisticated websites – for example a fake myGov login page – in order to steal personal information or install malware.

The ATO has a dedicated team to monitor for scams and to assist taxpayers who have fallen prey to scammers, and provides detailed information about email and SMS scams, phone scams and social media scams on the ATO website. The ATO also offers a reporting service where people can report an ATO impersonation scam if they encounter one.

Tax time 2024: claiming working from home expenses

Claiming work-related expenses is an area where taxpayers frequently make mistakes, and the ATO has flagged it a primary area of focus for tax time 2024. More than eight million taxpayers claimed a work-related deduction in 2023, with around half of those claiming a deduction related to working from home costs, so it’s clear that understanding the methods for calculating working from home deductions is important to help taxpayers avoid incorrect claims and get their lodgment right the first time.

“Copying and pasting your working from home claim from last year may be tempting, but this will likely mean we will be contacting you for a ‘please explain’”, ATO Assistant Commissioner Rob Thomson has said. “Your deductions will be disallowed if you’re not eligible or you don’t keep the right records.”

There are two methods for calculating work from home expenses: the actual cost method and the fixed rate method. Both methods require keeping detailed records and following the ATO’s three golden rules: the money must have been spent by the taxpayer without reimbursement, the expense must be directly related to earning their income, and the taxpayer must have a record to prove the expense. The two methods can’t be used in combination – you need to pick one or the other each year – so it’s important to consider which method will best suit your individual circumstances.

To be eligible to claim working from home expenses by either method, when working from home you must be fulfilling employment duties (not just minimal tasks like taking calls or checking emails); incur additional running expenses as a result of working from home (e.g. increased electricity or gas costs for heating/cooling or lighting); and keep detailed records showing how these expenses were incurred.

ATO focuses on rental property owners’ tax returns

Tax time 2024 sees the ATO continuing to turn the spotlight on rental property owners and inflated claims to offset increases in rental income. ATO data shows the majority of rental property owners are continuing to get information in their income tax returns wrong, even with most using a registered tax agent to complete their tax returns. The most common mistakes include overclaimed deductions; inadequate documentation to substantiate claimed expenses; and not understanding what expenses can be claimed and when.

To determine the accuracy of tax returns, the ATO cross-checks data from a range of sources including banks, land title offices, insurance companies, property managers and sharing economy providers. Incomplete documentation and the inability to substantiate claims for expenses and deduction are major causes of errors. Rental property owners need to make sure that they are keeping accurate records and are letting their tax agent (where they have one) know what is going on with their rental property so their return can be prepared correctly.

Not understanding what expenses can be claimed and when, particularly the difference between what can be claimed for repairs or maintenance versus capital expenditure, is the most common mistake rental property owners make on their returns. Deductions can generally only be claimed only to the extent that they are incurred in producing income – which means costs incurred in generating their rental income annually may be claimed for that period.

Tax time reminders for small businesses from the ATO

The ATO is encouraging small business owners to prepare for their 2024 tax return lodgment by considering the following:

Purchase and keep records of tax-deductible items: The end of the financial year on 30 June represents the last chance to purchase any tax-deductible items that the business intends to claim for 2023–2024. Ensure that any tax-deductible items are documented both for cost and usage, including apportionment for work and private use where relevant.

Check small business concessions: Small businesses may be able to access a range of concessions based on their aggregated turnover – this applies to sole traders, partnerships, companies and trusts – including CGT concessions, the small business income tax offset or the small business restructure roll-over.

Finalise STP records: The ATO reminds small businesses with employees that the 2023–2024 STP information must be finalised by 14 July. This important end-of-year obligation ensures that employees have the correct information required to lodge their income tax return. STP information for all employees paid in the financial year, even terminated employees, must be finalised.

Check your PAYG withholding and instalments: From 1 July, individual rates and thresholds will change and will impact PAYG withholding for the 2025 financial year. Check that the correct PAYG withholding tax tables are being used and that software has updated to the new withholding rates from 1 July. If PAYG instalments could result in paying too little or too much tax, instalments may be varied.

Review record-keeping: Looking toward the next financial year, small businesses should review their record-keeping from the past year and see if anything needs to be done differently in the future.

Scam alert: fake ASIC branding on social media

The Australian Securities and Investments Commission (ASIC) has issued a scam alert warning consumers that there has been an increase in the use of ASIC’s logo in social media scams promoting fake investments and stock market trading courses; cold calling scams; and impersonation accounts on Telegram. ASIC is working with the National Anti-Scam Centre (NASC) and social media platforms to remove such content and reminds consumers that it does not endorse or promote investment training or platforms, doesn’t cold call consumers, and is not associated with any investment offerings.

ASIC’s warning to consumers covers three main areas of concern.

Advertisements on social media platforms: ASIC has received reports of ads on social media platforms displaying the ASIC logo and claiming ASIC sponsorship for a “Stock Trading Master Class”. The ads link to a private WhatsApp group called “Lonton Wealth Management Center” – an entity listed by ASIC on the Investor Alert List in May 2024. ASIC is not associated with the entity, and ASIC does not sponsor the class.

Cold calling: Repeated cold calls from someone purporting to be from ASIC have been reported. The caller tries to engage with consumers about obtaining a refund on an investment. ASIC does not cold call consumers about investments.

Fake Telegram account: An account on Telegram is impersonating an ASIC social media account, with the operators asking investors for money to release their investment funds held in Australia. ASIC does not have a Telegram account as part of its social media presence and will never ask consumers for upfront payments or taxes to release Australian-held investments.

Client Alert – June 2024

We are pleased to supply you with the latest edition of Client Alert, which contains information on a number of important developments up to and including 27 May 2024.

Get ready for tax time 2024 – The ATO has recently flagged some primary areas where taxpayers frequently make mistakes on their tax returns.

ATO crypto data-matching program extended – The ATO has announced it will extend its current crypto asset data-matching program through to the 2025–2026 financial year.

Navigating complexities of crypto investments: SMSFs – The digital currency landscape continues to be treacherous terrain for SMSF trustees, with a growing number of reports indicating significant losses due to scams, theft and collapsed trading platforms.

Superannuation switching schemes and investment scams: what to look out for – ASIC has warned consumers to beware of “cold callers” offering to switch your super and has raised the alarm about a recent increase in sophisticated scams encouraging people to invest in fake bonds and term deposits.

R & D Grants – Clients undertaking Research & Development projects should contact the office as there may be government grants available.

Confused about Aged Care? – Please contact Guests as we are able to advise and liaise with Aged Care Specialists.

Audit Insurance protects you to a degree from the unexpected costs incurred in responding to an audit, reimbursing you for related professional fees and associated with these costs.

Should you wish to discuss Audit Insurance further please contact our office or your Insurance Broker.

Acquisition of property in trusts – If you are contemplating purchasing a property in a trust, please contact your Partner at Guests for advice prior to acquisition.

Feel free to contact our office anytime by phone or email – to discuss any of the points raised in this Client Alert that may affect you.

Holidays

The office will be closed on the following days:

Monday 10^th June – King’s Birthday
Wednesday 12^th June – Jewish Holiday
Thursday 13^th June – Jewish Holiday

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161
(03) 9509 7033
info@guests.com.au