Author Archives: EllcoAdmin

Super contributions – too much super can mean extra tax

There are caps on the amount you can contribute to your superannuation each financial year that are taxed at lower rates.  If you contribute more than these caps you may have to pay extra tax. The cap amount and how much extra tax you have to pay depends on your age and whether the contributions are:

• concessional (before-tax) contributions
• non-concessional (after-tax) contributions

Contribution Caps
Concessional

The maximum amount of concessional contributions that can be contributed in respect of a member without a tax penalty being imposed:

*Subject to work test if aged over 65 years.

Non-Concessional

The maximum amount of non-concessional contributions that can be made in respect of a fund member is:

*People under 65 years of age may be able to make non-concessional contributions of up to three times their non-concessional contributions cap over a three-year period (i.e. $540,000).  This is known as the “bring-forward” option.

The penalty for exceeding the above caps is 46.5% of any excess contributions.

Can you access your super fund for medical procedures?

Editor:  The following relates to a newspaper article that appeared recently in a national newspaper and was then subsequently picked up by national TV and radio.

As it concerns a taxpayer withdrawing all of her $30,000 balance from her superannuation fund for weight loss, a tummy tuck and breast implants, clients who heard about it or saw it on TV may be incorrectly contemplating accessing their super.

Compassionate grounds to withdraw superannuation

The taxpayer involved suffered from obesity.  On this basis, she obtained a written statement from her medical practitioner in which it was argued that without this stomach reduction procedure, it was likely that she would experience severe ill health that could possibly be a life threatening condition.

However, applications for early release of superannuation on medical grounds:

1. must be approved by the Department of Human Services (DHS); and
2. applicants need to supply letters from their GP and a specialist certifying that their condition is life threatening, and provide proof that expenses cannot be met by other means, including savings.

The taxpayer said that given her family history of diabetes, cancer and hypertension, her case met the criteria.

Breast implants and tummy tuck?

However, the taxpayer apparently made a second withdrawal (of approximately $20,000) from her superannuation fund to pay for breast implants and a tummy tuck.

Editor:   Clients need to understand that there are only very limited circumstances under which superannuation monies can be withdrawn to pay for a medical procedure, under the umbrella of ‘compassionate grounds’.

When can super monies be released on ‘compassionate grounds’

Where an SMSF member is suffering a severe medical condition and cannot afford to pay for such medical expenses, they can apply to the DHS (not the ATO) to have some of their super funds released on ‘compassionate grounds’.

Basically, a member will be entitled to claim ‘compassionate grounds’ where:

• the medical treatment (which is not readily accessible through the public health system) is necessary to treat a life threatening condition, to alleviate acute or chronic pain, or to alleviate an acute or chronic mental disturbance/illness; and
• two registered medical practitioners (one of whom is a specialist) have certified that the above requirements have been satisfied.

Editor:  However, there are many other issues involved, including significant penalties where funds are withdrawn incorrectly, so clients should contact our office before trying to withdraw any funds from their superannuation fund. 

RBA announces Interest Rates on hold for November 2014

The Reserve Bank of Australia has decided to leave the official cash rate unchanged at 2.5%

How to register for ATO online services

With the ATO’s move to a paperless system you will soon be required to lodge your Activity Statement using their online Business Portal.

What you need to do…

• Obtain an AusKey (an online identity) – go to https://abr.gov.au/AUSkey/Registering-for-AUSkey/Register-for-an-AUSkey/ for instructions and assistance.

Once you have your AusKey you can use this and your password to log into the ATO Business Portal.

• Log in to the ATO Business Portal – ttps://bp.ato.gov.au/.  Here you will be able to access your ATO account, view your details, lodge Activity Statements and make payments to the ATO.

If you have any problems please contact us, we are here to help!

Lost super climbs to $14 billion

New statistics released by the ATO reveal that more than $14 billion in lost super is waiting to be claimed.

“There’s over $6 billion of super, sitting in accounts where funds have not been kept up-to-date with changes in personal details,” said Mr Shepherd.

“It’s easy for this to happen because when people get married or move house, the last thing on their mind is updating their name and address details with a super fund.”

An additional $8 billion in super is sitting in accounts that have not received a contribution in five years or more.

Visit www.ato.gov.au/superseeker for more advice on how to track down lost and unclaimed super.

Negative Gearing…what is it and how does it work?

We often hear people talking about negative gearing and that everyone should be doing it for the tax benefits.  But is it really all it is cracked up to be?

Find out more and see our worked examples by viewing our latest video…

Watch Video

Can you pick a scam?

You should be wary of SMS and emails claiming to be from the ATO. Hoax SMS and emails can look very convincing.  To protect yourself from scams and fraud, remember to look out for emails that:

• are unsolicited, and check whether emails are from a valid ATO email address – scams may include an official-looking email address to give you a false sense of security
• do not address you by your name, or address you by your email address
• as for your personal or financial information, such as your date of birth, address, credit card details and PIN – the ATO will never ask you to provide this information via SMS or email
• are poorly worded and contain spelling and grammatical mistakes – fake emails often contain misspellings, poor grammar, missing words, and gaps in logic; these types of mistakes help scammers avoid scam filters
• promise you money
• contain an attachment for you to lodge a form – opening one could cause you to download spyware or a virus
• contain fake links for you to lodge a form – in emails, check where the link is going by moving your mouse over the link the email and look at the URL in the bottom bar of the browser; if it looks suspicious, don’t click it

Remember, the ATO can only calculate tax refunds after you have reported information to them about your financial activity for the year.  The ATO will also automatically pay any refund due into your nominated bank account or send you a cheque. If you receive an SMS or email asking for personal information, report it to the ATO or if you are unsure, please contact our office.

How to get to the top of Google

Have you ever wondered how to get to the top of Google rankings?

We have found a site that will analyse your website to determine what you need to improve to make your website climb the Google rankings.

Just visit http://www.woorank.com/ and enter your website address.  Woorank then gives you a detailed report card regarding your website and what you need to do to improve it.

Have you ever wondered just how popular Self Managed Superannuation is?

On 10 September 2014, the ATO published its quarterly report on SMSFs.

Key statistics released for the quarter include:

Total number of SMSFs            534,176 funds
Total members of SMSFs         1,011,686 members
Total assets in SMSFs              $557 billion or $557,000,000,000
Average SMSF balance            $1,042,821 average fund balance
Average member balance         $550,616 average member balance

Clearly managing your own superannuation is a popular choice for Australians.  Are you interested in managing your own superannuation?  If so, please contact us.

QBCC Introduces New Minimum Financial Requirements for the Building Industry

From 1 October 2014 the Queensland Building and Construction Commission (QBCC) will introduce a new financial policy.

The changes aim to significantly reduce the financial burden and cost of maintaining your licence by removing the need for you to provide financial information at renewal time.

There will be one set of rules for all licensees with one report type for all categories.  A financial report will only be required when first applying for a licence, or to upgrade a turnover limit.

Additionally, for the first time since 2006, the limits for self-certification categories have increased.  Turnover limits have doubled to $200,000 (trade contractors only) and $600,000 (entry level for builders).

For more information please refer to the following links:

• Key messages from QBCC
• Minimum Financial Requirements – Comparison Table

If you would like further assistance regarding your licence requirements and how these changes affect you, please contact our office.