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Is an SMSF right for your small business?

Is an SMSF right for your small business? Follow these 10 smart steps before making the move. Owners of small-to-medium enterprises  (SMEs) can gain a lot from running their own self-managed superannuation fund (SMSF), although it’s not without its challenges.   Here we outline a few of the positives as well as some of the negatives. THE UPSIDE  1.    You’re in control of your retirement  Most people who run their own business like to be in control of their working life; chances are they enjoy making their own business decisions. Big business holds little or no attraction for them – most of the time the big end of town is politics on steroids as well as slow to react and glacial at making business decisions.  It’s … well, big business! It’s a similar thing with retirement savings. Why trust your retirement savings to large organisations where you’re just a number? Running your own super fund allows ...
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Couple refused small business tax concession

Couple refused small business tax concession The AAT has recently affirmed a decision of the Tax Commissioner refusing a couple’s request to apply a capital gains tax concession in relation to the sale of their business. The husband and wife were the sole shareholders and directors of a private healthcare company which they had sold, via their shareholding, for some $14 million in the 2007 income year. They claimed they were entitled to the tax concession in respect of the capital gain they made on the sale of their shares. In particular, they claimed they satisfied that relevant asset test to be eligible for the concession on the basis that the company had a liability just before the sale to pay them eligible termination payments totalling some $2.75 million. In rejection of the couple’s argument, the AAT confirmed that the eligible termination payments paid to the couple were not to be taken into account for the purposes of the relevant asset test in determining whether they qualified ...
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Will the tax man celebrate your Christmas party ?

Will the tax man celebrate your Christmas party ? So you are busy organising your Christmas Party, considering what gifts you might give to your clients and staff.  Do you have to pay the tax man for that Christmas cheer ? 1. The Christmas Party a) If the party is off business premises and you spend less than $300 per employee, there is no Fringe Benefits Tax (FBT) but also no tax deduction or GST claim. If clients are invited, there is no tax deduction or GST claim for their allocated portion as the cost is entertainment. b) If the party is on business premises on a work day, there is no limit on spend for employee or clients, but again no tax deduction or GST claim. 2. Gifts a) If you give a gift that is not included as part of the Christmas Party; categorised as a “Non-entertainment gift”; it is exempt from FBT where the total value is less than $300 inclusive of GST. It is also tax deductible and the GST credit can be claimed.  Gifts of entertainm ...
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Why didn't my BAS come in the mail this Quarter ?

From 1 July 2014, the ATO will continue to send paper activity statements until they receive an electronic lodgement.

Once you have lodged an activity statement via an electronic medium (Tax Agent Portal, Business Portal, Small Business Reporting (SBR)), the ATO will cease generating a paper return and whichever medium was used to lodge that statement is where the next activity statement will be made available.

People who elect to receive their activity statements electronically will generally receive them three to four days after the generation date. The generation date is usually the middle of the month prior to the end of the quarter. If you have elected to use the Business Portal or SBR you are notified by email that your activity statement is available to access and complete online. You must have a valid email address recorded with the Business Portal and SBR. If Tactica Partners receives an electronic activity statement on your behalf we will notify you of this via email.

The ATO will continue to send paper activity statements for the following form types because they cannot currently despatch them electronically:

• Annual GST Report

• Quarterly PAYG Instalment Notice

• Quarterly GST Instalment Notice

• Quarterly GST and PAYG Instalment Notice
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Property developers and use of trusts under scrutiny

Property developers and use of trusts under scrutiny

The ATO is examining arrangements where property developers use trusts to return the proceeds from property development as capital gains instead of income on revenue account. ATO Deputy Commissioner Tim Dyce said the ATO has “begun auditing property developers who are carrying out activities which conflict with their stated purpose of capital investment”. He said a “growing number of property developers are using trusts to suggest a development is a capital asset to generate rental income and claim the 50% capital gains discount”.

Mr Dyce warned that penalties of up to 75% of the tax avoided can apply to those found to be deliberately using special purpose trusts to mischaracterise the proceeds of property developments. The ATO said it has made adjustments to increase the net income of a number of trusts. It said penalties will be significantly reduced if taxpayers make a voluntary disclosure

Data-matching offshore bank accounts

Data-matching offshore bank accounts

The ATO is widening the breadth of data it obtains on individuals from financial institutions, possibly revealing hidden or undisclosed offshore income. The ATO has recently announced a data-matching program targeting offshore bank accounts. Under the program, the ATO will collect account details of bank customers from various financial institutions to identify Australian resident taxpayers with offshore bank accounts which may indicate evidence of undeclared income and/or gains.

TIP: The Tax Commissioner earlier this year announced a tax “amnesty” called Project DO IT which aims to encourage individuals to disclose previously undeclared offshore income or assets. Under the program, individuals could be offered reduced penalties for disclosing their offshore income. The ATO has been warning individuals to come forward before 19 December 2014, which is when the project will end.

Residency depends on facts and circumstances of each case

The ATO has issued a Decision Impact Statement following an individual’s legal win in arguing that he was not a tax resident of Australia during the 2009 to 2010 income years.

The taxpayer had moved to Saudi Arabia to work on a project for a number of years before moving back to Australia. Key factors that were taken into account by the AAT in deciding in favour of the taxpayer were the man’s intentions at the relevant time to live and work indefinitely in Saudi Arabia. The ATO said the decision was reasonably open to the AAT. However, it said the decision does not change its approach to residency cases. It said these matters involve questions of fact and degree and different facts may result in different conclusions as to residency.

The ATO said it will continue to approach residency cases by weighing all the relevant facts and circumstances and applying the relevant tax law and authorities to those facts

Mining tax gone but watch for associated tax changes

Mining tax gone but watch for associated tax changes The mining tax has been repealed. However, in order to pass the legislation through the Senate, the Government made a deal with the Palmer United Party and Senator Muir to defer the abolition of: • the Income Support Bonus to 31 December 2016; • the Schoolkids Bonus to 31 December 2016 (and restrict the Bonus to families earning less than $100,000 per annum); and • the Low Income Super Contribution to 30 June 2017. The Government also agreed to freeze the superannuation guarantee rate at 9.5% for seven years. Under the changes, the rate will increase to 10% from 1 July 2021 and by 0.5% per year from 1 July 2022 until it reaches 12% for the year beginning 1 July 2025. No other changes were made to the legislation, meaning the abolition of the associated measures such as loss carry-back (from 1 July 2013 for 30 June balancing companies), and geothermal expenditure deduction (from 1 July 2014), will proceed. The reduction ...
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Federal government grants for your small business

Government grants are one of the best untapped resources to help your business overcome one of its biggest challenges: cash flow.

But recent research from the Organisation for Economic Co-operation and Development found large enterprises in Australia were more likely to receive some form of government support for innovation.

Casual workers: what you need to know as an employer

Casual workers: what you need to know as an employer

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