Superannuation

New Years Bulletin 2015

Posted on Jan 2, 2015 in AFS Bookkeeping, Business Bulletin, Superannuation, Tax updates

New Years Bulletin 2015

Super & Business Owners By contributing to superannuation you can not only provide for your retirement but also enjoy concessional tax treatment whereby: Þ Investment earnings (such as dividends, interest, rent etc.) are taxed at just 15% (or 0% if your account is in pension mode) Þ Capital gains (on the sale of shares, property etc. held by your fund) are taxed at just 15% (or 10% if the asset is held for 12 months or more). By contrast, earnings outside superannuation are taxed at your marginal tax rate. Unless you earn below $18 200, your marginal tax rate will always be higher than the highest superannuation rate of tax (generally 15%). This means that the tax imposed on your investment earnings inside superannuation will always be less than the tax imposed on these earnings outside superannuation (unless you earn less than $18 200). The good news is that the tax system encourages business owners to make contributions to the concessionally taxed superannuation environment in at least two respects: Income Tax Deduction By contributing to superannuation as a business owner, you can not only provide for your retirement, but you may be able to reduce your income tax. Generally speaking, unless you are an employee of your business (e.g. company director or employed by your trust) you will likely be able to claim a tax deduction for the full amount of your personal after-tax contributions to superannuation. 10% Rule Specifically, you can claim a tax deduction for the entire amount of your contribution if less than 10% of your  (a) assessable income (b) your reportable fringe benefits and (c) your reportable employer contributions for the year is from being an employee. Therefore, for those of you not employed by your business (e.g. sole traders), this is a strategy worth considering. Having made the deductible contribution, you must notify your fund of your intent to claim a deduction before you lodge your tax return! For those of you employed by your own company or trust (and failing the 10% Rule); that entity may contribute on your behalf and claim an income tax deduction. Business Sale Proceeds Small business owners that sell their businesses may be eligible for generous capital gains tax relief. One of those capital gains tax breaks occurs when an amount is contributed to superannuation. When it comes time to sell your business or even part of your business, small business owners have a unique opportunity to build up their retirement savings. The sale proceeds of your business (or part thereof) may in certain circumstances be contributed to superannuation without counting against your standard contribution limits. A $540 000 non-concessional three-year contribution cap exists. If you sell your business and like many business owners seek to contribute the proceeds to superannuation, the non-concessional cap is often insufficient. Even where the $540 000 three-year cap is able to accommodate your desired level of contribution, your ability to make contributions in the subsequent two years may be restricted. For small business owners however, the CGT Cap Amount offers a special concession. Contributions of up to a lifetime limit of $1.355 million (the CGT Cap Amount) from the disposal of small business assets can be excluded from the non-concessional cap subject to certain conditions. With the sale proceeds safely inside your fund, you can then enjoy the concessional tax treatment exclusive to the superannuation environment (see earlier). Resolving Disputes Whether it be with Government, suppliers, landlords or customers, disputes are an uncomfortable but inevitable part of business. The good news is that now there is an interactive tool that can help....

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MySuper – Changes to Superannuation

Posted on Jan 2, 2014 in AFS Bookkeeping, Superannuation

MySuper – Changes to Superannuation

‘MySuper’ – Changes to the Superannuation Regulations Make sure you know the Rules From 1st January 2014, employers must make superannuation contributions to a superannuation fund that offers a “MySuper” product for those employees who have not nominated their own preferred choice of fund. This means the default superannuation fund that you have in place for paying the superannuation for those employees who do not advise you of their choice of fund MUST now be a “MySuper” fund. MySuper is a simple and cost effective super account that will replace existing default fund accounts. MySuper funds will offer products that do not require members to pay for services and features that they do not need or use. If you have not heard from your existing default superannuation fund advising you of their authorised MySuper products and arrangements for paying superannuation contributions, you should contact them now to ensure you continue to meet your obligations. A list of authorised MySuper funds can be found HERE and listed under List of MySuper Authorisations. For further information on MySuper as well as other information about your superannuation obligations visit the ATO website at: MySuper | Australian Taxation Office. If your employee’s fall under an award also make sure your choice of default fund continues to meet your award obligations. Finally remember to update any employment documentation you may have to correctly show the name of your MySuper default fund as required. Advanced Financial Services is happy to assist you with your bookkeeping and payroll requirements for Staff and can ensure all your requirements are met. Please contact Advanced Financial Services Pty Ltd if you would like further information about how we can help you meet your bookkeeping and payroll obligations. Email or Call us on (07) 5668...

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