Fringe benefits tax is paid by employers on certain benefits provided to employees, like private use of a work car, parking, entertainment, gym memberships, and more. Cars are by far the most common fringe benefit, but there’s an interesting exemption for electric vehicles.
Read MoreWe’ve all come back from overseas holidays dreaming of buying a property in an idyllic destination and spending extended periods of time there, or even renting it out as accommodation. It’s a fantastic idea, but if you do take the plunge, keep in mind that there are tax implications on investments and earnings.
Read MoreHave you ever looked at your MyGov account? Even if you have, there’s a good chance you don’t login very often. Which is why we’ve seen an increase in emails from clients, who have been shocked to receive a letter from the ATO telling them they have a payment overdue.
Read MoreGenerations of young Australians have been sold the view that HELP debts – the loans that cover university tuition fees – are interest free. And strictly speaking, that’s true. So why are the amounts graduates owe increasing?
Read MoreSuperannuation contributions can be a great tax and savings strategy, but as always, there are pitfalls to watch out for. Division 293 is an additional tax on super contributions that reduces the tax concession for individuals, where your combined income AND concessional contributions are more than $250,000.
Read MoreThere’s no doubt property investment is one of the most popular wealth-building strategies for Australian families. There are plenty of benefits to the strategy, and also a few traps to be aware of.
Read MoreIf you were a federal government with a massive hole in your budget, what would you do? The current government has decided to increase tax on superannuation balances over 3 million dollars. From our perspective there are two major areas of concern.
Read MoreThe death of a parent is a challenging time. And once the initial shock passes, there comes the inevitable need to deal with their estate, which often includes the inheritance of property. Capital Gains Tax is a really complicated area of tax law, which often comes into play at a really difficult time for families. If we can help, please reach out.
Read MoreThis year the ATO promising to crack down hard on family trust distributions to individuals and entities that don’t actually benefit from that income. In other words, the children of business owners in most cases.
Read MoreWould you believe it’s December already?! And what an amazing race it’s been. As we near the end of the year, it’s good opportunity to reassess where we’re at, and where we’re headed in the new year.
Read MoreWhen I speak to business clients the most common complaint I hear is about quarterly pay as you go tax instalments. So you’re paying tax quarterly and then come end of financial year – more tax!
Read MoreCapital gains tax regarding your main residence is straightforward, right? If you live in it, no CGT. If you make income from it, you pay CGT when you sell. You’d think it would be that simple, but of course, it’s not.
Read MoreAustralia’s tax system is a minefield. Different taxes and tax rates apply based on who you are and how you’re setup, as well as who the governing authority is. Need help? Drop us a line.
Read MoreTransitioning a family business between generations can be a tricky challenge. Through our experience we’ve developed a series of checks and balances that ensure the process goes smoothly for everyone involved. As always, open and honest communication is the key.
Read MoreIf we think about the core values of family-run businesses, one of them is usually family itself. But when it comes to passing that legacy on to the next generation, without the proper planning, things can get messy quickly.
Read MoreSmall business life is great fun, but it also comes with a lot of pressure, so we thought we’d cover some of the hot questions we’ve been hearing recently.
Read MoreJune 30 is fast approaching so just like every year, it’s time to get your tax planning sorted.
Here are our top 5 things to keep in mind this end of financial year:
Number 1: The concessional deductible superannuation cap has increased this financial year to $27,500, which allows you to tip a little more into your super at that reduced 15% tax rate. It’s also worth keeping in mind that there are still COVID catch-up contributions available from year end 2019, if your balance is under $500,000.
Number 2: For businesses, the instant asset write-off scheme has been extended once again to June 30 2023, which means there’s still time to invest in equipment or other assets valued at less than $150,000 before June 30, for a full tax write-off.
Number 3: For business owners, end of financial year is always a good time to review your entities and tax structures to achieve the most efficient and effective tax strategies before June 30.
Number 4: If your business is set up through a family trust you should consider how to most effectively distribute profits to beneficiaries to the reap the full benefits of family trust structures.
Number 5: If you’re a company director, don’t forget that the deadline to apply for a new Director ID is November this year. The government has introduced this requirement so it can identify all company directors and prevent illegal phoenix activity, where businesses are liquidated to avoid paying their debts. This is a requirement for ALL company directors and can be done via your MyGov account.
So there’s our top 5 things to be thinking about this end of financial year. As always, if you have any questions, please don’t hesitate to get in touch.
Many of our clients come from migrant backgrounds, and many families that migrated in the past half century have maintained close links with their homelands, including owning or inheriting property overseas.
Now, inheriting an apartment on a Greek island or a villa in the Italian countryside is a wonderful luxury, but it also creates tax headaches where those assets are used to generate an income.
Often the first question we’re asked is whether people need to pay tax on their overseas asset-driven income twice, once overseas and again in Australia.
The answer in some cases is yes, you do.
But in other cases, Australia has developed double tax agreements with a large number of countries, that ensures Australians with overseas interests in those countries, only pay tax once.
As an Australian resident for tax purposes, you are assessed on your global income, which is reported in your Australian tax return. In cases where a double tax agreement exists and tax has been paid overseas, you would receive a foreign income tax offset for the amount of tax paid overseas.
This is complex taxation law and if you generate an income overseas, you will most likely need expert advice.
As always, if you have any questions, please don’t hesitate to get in touch.
As we all know, paying taxes is a necessary evil.
But being aware of how much tax you’re paying, and where the hidden taxes lie, is really important.
One issue we see over and over again, particularly in family businesses, is family members who are being paid a salary, then also withdrawing further money from the business.
The problem with that is, that while their regular salary might be $80,000, the extra cash they’re withdrawing also counts as income, and will be taxed at their marginal tax rate, plus the medicare levy.
So if you’re earning $80,000 from your family business, but then at the end of the year you’re drawing down a further $100,000 from the business’ surplus, your income is actually $180,000 and you’ll be taxed as such.
However, you do have options to minimise this impact, including taking the money as a director’s fee, dividend, or complying loan agreement, but to manage these options you’ll need expert advice.
The key take-away here is that how you structure your salaries and manage your cashflow is really important to also managing your tax liability.
As always, if you have any questions, please don’t hesitate to get in touch.
At this time of year, with a little more down time, and a lot more time spent with family, it’s natural that we take some time to reflect.
One thing it’s important to think about, is what happens after we’re gone. That’s called estate planning.
Over our investment journey, assets and family wealth accumulate. Most people think when they go, their assets will be split equally, and it will all go to the kids.
Typically, as business life progresses, we come to own assets in different entities, whether that’s a company, trust, or other structure. Different entities serve different purposes.
When it comes to transferring these assets though, how they’re held can present other issues, like additional unforeseen tax and compliance costs.
How you plan to allocate your estate after you’re gone is not a simple process and requires a bespoke strategy and particular agreements.
These can be challenging conversations, which is why we make sure to involve the whole family group, to ensure plans are clear and everyone understands what’s going to happen.
If you would like to discuss your own estate planning further, please don’t hesitate to get in touch.
CFD Advisors Accountants Pty Ltd
Phone +61 3 8539 2600 – info@cfdadvisors.com.au
Level 11, 60 Albert Road, South Melbourne VIC 3205
Liability limited by a scheme approved under Professional Standards Legislation
