09

Feb

Government announces changes to proposed Division 296 tax

The Government recently announced that it is making a number of practical changes to the design and implementation of its policy to better target superannuation concessions.Editor: The previously announced measure regarding these changes involved effectivelyimposing, from the 2026 income year onwards, an additional tax of 15% on a percentage of“superannuation earnings” for individuals with superannuation balances above $3 million.The Treasurer stated that the Government’s changes “take two years of feedback into accountwhile still maintaining the main objectives of our policy.”First, a new second threshold will be introduced to better target super concessions onthe superannuation earnings of large balances above $10 million, with earnings above thatthreshold taxed at an additional 10%.Secondly, the Government will index the large balance thresholds of $3[…]

06

Jun

ATO Compliance Updates for Business and Individuals

As the end of financial year approaches, the Australian Taxation Office (ATO) has released several important updates and reminders relevant to individuals, small business owners, and ride-sourcing service providers. This month’s key developments include clarification on deduction rules, compliance obligations, asset write-off measures, and superannuation preservation age. Below is a summary of the most critical points. ATO Denies “Wild” Work-Related Deduction Claims The ATO has highlighted a number of unreasonable tax deduction claims submitted by individuals attempting to categorise personal purchases as work-related expenses. Examples include: All of these claims were rejected, as they relate to personal use rather than genuine work-related expenses. The ATO reiterates that taxpayers must ensure any claim is directly tied to income generation, and must[…]

23

May

Understanding and Managing PAYG Instalments for Self – Managed Super Funds (SMSFs)

1. What are PAYG Instalments for SMSFs? Pay – as – you – go (PAYG) instalments for SMSFs are a system that requires fund trustees to make regular prepayments towards the expected tax liability on the fund’s business and investment income during the income year. The actual tax liability is determined at the end of the income year when the annual income tax return is assessed. The PAYG instalments paid throughout the year are then credited against this assessment to figure out if more tax is owed or if a refund is due. 2. Who is Required to Pay PAYG Instalments? The ATO will contact entities and individuals (in this case, SMSF trustees) who are required to pay PAYG instalments.[…]

14

May

Tax Tips and Updates for Small Businesses, SMSFs, Home Worker, and NFPs

Managing Day-to-day Transactions The ATO provides the following guidance to help small business owners manage their tax obligations more effectively: Minimum Pension Drawdown Reminder for SMSFs Self-managed super funds (SMSFs) must pay a minimum annual pension amount to members receiving an account-based pension. This amount is determined by applying the relevant age-based percentage factor to the member’s pension account balance as at 1 July 2024, or pro-rata for pensions commenced part-way through the 2025 financial year. Failure to meet the minimum payment requirement by 30 June may result in adverse tax consequences for the member. Avoiding Common CGT Errors Holding a Foreign Resident Capital Gains Withholding (FRCGW) clearance certificate does not exempt a taxpayer from capital gain tax (CGT) obligations.[…]

14

May

Busting Tax Myths – ATO Clarifies NFP Misconceptions, Input Tax Credit Denial, and UPE Loan Ruling

ATO “Busts” Common NFP myths Editor: As the Not-Editor: As the Not-for-profit (NFP) self-review return deadline approaches in March, the ATO has recently released a publication to address and debunk several common misconceptions. Myth 1: All NFPs are income tax exempt. ATO response: This is not true.  Some NFPs are income tax exempt and some are taxable. Myth 2: There is only one way to lodge the NFP self-review return. ATO response: There are three ways, as follows: Myth 3: Anyone can lodge the NFP self-review return online. ATO response: If lodging via Online services for business, anyone authorised to access the return in Online Services can lodge.  If a registered tax agent has been engaged, they can also prepare[…]