Event-based reporting for SMSFs

This article has been written by our SMSF expert Tony Beckett 

Before we start, lets review some of the abbreviations you will see throughout the document.

• What is an SMSF – Self-managed super fund 
• What is TBAR – Transfer balance account report 
• What is SAR – SMSF annual return 
• What is retirement phase – Pensions that are paid to members under a full condition of release (over 65 years of age or retired) 

SMSFs will generally not need to start event-based reporting for the transfer balance cap using the TBAR until 1 July 2018. However, an SMSF needs to ensure that it has appropriately documented all income stream valuations and decisions for the 2017–18 year.

An SMSF must report events that affect a member’s transfer balance, including:

• income streams a member was receiving on 30 June 2017 that 
• continued to be paid to them on or after 1 July 2017, and 
• are in retirement phase. 
• new retirement phase income streams 
• some limited recourse borrowing arrangement payments 
• compliance with a commutation authority issued by the Commissioner 
• personal injury (structured settlement) contributions 
• commutations of retirement phase income streams. 

How often and when you need to report

If an SMSF member has a pre-existing income stream, it must be reported via the TBAR on or before 1 July 2018. A pre-existing income stream is an income stream the member was receiving on 30 June 2017 that:

• continued to be paid to them on or after 1 July 2017, and 
• is in retirement phase. 

From 1 July 2018, all SMSFs must report events that affect their members' transfer balances. Timeframes for reporting are determined by the total superannuation balances of the SMSF's members:

• where all members of the SMSF have a total superannuation balance of less than $1 million, the SMSF can report this information at the same time as when its annual return is due, or 
• SMSFs that have any members with a total superannuation balance of $1 million or more must report events affecting members’ transfer balances within 28 days after the end of the quarter in which the event occurs. 

Transfer balance account events that occur during 2017–18 should be reported at the same time as the SMSF's first TBAR is due:

• If the SMSF is reporting annually, this will be the same time as the trustee is due to lodge the 2017–18 SMSF annual return. 
• If the SMSF is reporting quarterly, this will be 28 October 2018. 

An SMSF is required to report earlier if a member has exceeded their transfer balance cap.

Any SMSF can choose to report events as they occur and in some instances are encouraged to do so to avoid incorrect excess transfer balance determinations issuing

The Australia Government website has examples of when you will need to lodge.

If an SMSF does not lodge a TBAR by the required date, the member’s transfer balance account will be impacted, and the member penalised.

If you would like more information regard this above – please contact us (07)4616 9000 or email us at enquiries@dcadvisorygroup.com.au





This information is of a general nature only and has been provided without considering your objectives, financial situation or needs. Because of this you should consider whether the information is appropriate considering your objectives, financial situation and needs.

Franking credits and your SMSF

You may have noticed significant media coverage recently regarding the Australian Labor Party’s proposed policy to stop SMSFs from receiving tax refunds for the franking credits they receive in conjunction with the dividends paid from Australian companies they own. 

First of all, what are franking credits and how do they benefit SMSFs? 

Under the Australian tax system companies pay 30 per cent tax on their profits. When these profits are then passed on to their shareholders in the form of dividends, the company also hands the shareholders a credit for the tax the company has already paid (the “franking credit”). The individual shareholder then pays tax on the profit they received from the company less the credit for the tax the company has already paid. The franking credit ensures that the company profits are taxed at a shareholder’s marginal tax rate. 

For SMSFs in retirement phase which generally have a zero tax rate, this means they can receive a full refund of the tax already paid by the company on their behalf. 

SMSFs who have members in accumulation phase benefit from franking credits reducing the tax they pay on their SMSF’s earnings and may receive partial refunds of their franking credits depending on the fund’s overall tax liability. 

Labor, if elected, will change the law so that SMSFs and other low tax paying entities will no longer be able receive a tax refund for the franking credits they receive. This will affect all SMSFs that own Australian shares, especially funds that have received tax refunds in recent years. 

This could have a significant impact on the retirement income of many SMSF members in retirement. For example, an SMSF with $500,000 in retirement phase with 40 per cent of assets held in Australian shares could lose around $4,285 per year in tax refunds from their franking credits. This impact could be a significant hit to your annual retirement income. 

How can we help? 

SMSF Specialist advisors can help you understand how a change in the tax treatment of franking credits may impact your SMSF portfolio and retirement income. Please feel free to give me a call to arrange a time to meet so that we can discuss your particular requirements in more detail. 

Also, if you are concerned by the franking credit policy and want to ensure your voice as an SMSF trustee is heard in Canberra on this and other important superannuation issues, then I recommend that you consider joining the SMSF Association as an SMSF trustee member to support their advocacy for SMSFs. (http://trustees.smsfassociation.com/). The SMSF Association strongly opposes the proposed change to the tax treatment of franking credits and is looking to resist the introduction of this policy for the benefit of all SMSFs.

If you would like more information about this article please contact us.

Useful Links

• SMSF Myths Busted - Fact Sheet
• Personal Superannuation Contributions - Fact Sheet 

This information is of a general nature only and has been provided without considering your objectives, financial situation or needs. Because of this you should consider whether the information is appropriate considering your objectives, financial situation and needs.

Women flock to work, but super still needs work

Originally written by Nicki Bourlioufas for Morningstar

Australia's female labour force participation rate reached an historic high of 60.5 per cent in January 2018 and continued growth could help to grow women's superannuation balances, which still significantly lag those of men.

Average superannuation balances in 2015-16 for people aged 15 and over were $111,853 for men and $68,499 for women, according to data from the Australian Bureau of Statistics.

Moreover, women are still retiring with substantially lower savings. Average superannuation balances at the time of retirement (at ages 60 to 64) in 2015-16 were $270,710 for men and $157,050 for women. This falls well short of the $545,000 needed for a comfortable retirement, according to the ASFA Retirement Standard for a single person.

Even more worrying is that one in three women reported retiring with no superannuation savings in 2015-16. That compares to 27 per cent of males who reported nil superannuation. 

According to the Association of Superannuation Funds of Australia (ASFA), there are several reasons women have less superannuation. Women spend more time out of the paid labour force for family reasons, including caring for children as well as parents. Women are also more likely to be employed in part-time and lower-paid jobs. 

ASFA CEO Dr Martin Fahy says lifting the Superannuation Guarantee (SG) to 12 per cent needed to happen sooner rather than later to adequately address the lack of sufficient superannuation held by women. 

"Security for women in retirement is an important issue. Despite increasing workforce participation by women, there still remains a significant disparity between the retirement incomes of men and women. There are a number of factors that contribute to this, including broken working patterns," Fahy says. 

"While this is not confined to women, given that caring for children, parents, and other family members is more often than not performed by women, this results in both breaks in employment, and frequently, significant periods of part-time employment. 

"The gender pay gap and the increasing casualisation of the workforce also contribute to the gap. While this is not unique to women, this does have a tendency to affect roles which predominantly employ women, such as the caring professions, hospitality, and retail." 

Dr Fahy recommends women make the best use of the federal government's tax concessions for superannuation contributions. 

"There is a $25,000 annual concessional contribution cap and the ability to make catch-up contributions from 1 July 2018, using previously unused cap amounts on a rolling five-year basis for anyone with less than $500,000 in super," he says. 

"You may also be eligible for a super co-contribution from the government of up to $500 if you make personal super contributions and earn less than $51,813. The Low Income Super Tax Offset (LISTO) provides a refund of contributions tax for anyone earning up to $37,000, up to a maximum of $500. 

"If you have received a large windfall (such as from an inheritance) or sold an investment property, think about putting the proceeds into super. You can make a $100,000 after-tax annual contribution if your super balance is less than $1.6 million as at 30 June of the previous financial year." 

Financial adviser Jay Adamson with countplus one says women need to take a greater interest in their superannuation. 

"It is 9.5 per cent of your salary and it is important. Make sure you are invested in the right asset allocation to achieve your objectives. Check on fees and charges and find a fund that meets your current needs (and this may change over time)," she says. 

Salary sacrificing is also important. "Ask your employer to contribute part of your pre-tax salary directly to your superannuation fund. For example, if your taxable income is $80,000 a year, a superannuation contribution of $100/week will reduce your net take home pay by only $59/week," she says. 

"If you are self-employed, don't neglect to make superannuation contributions--they are a tax deduction for your business." 

She also recommends working with your spouse. "If you earn less than $40,000, then your partner can get a tax offset of up to $540 on contributions made to your complying superannuation fund. There may also be advantages for you in 'superannuation splitting' where part of your spouses' superannuation can be transferred to top up your own superannuation account," says Adamson. 

ASFA recommends other policy changes that would further improve superannuation outcomes. These include payment of superannuation contributions linked to paid parental leave. 

In addition, removal of the $450 a month threshold for payment of Superannuation Guarantee contributions would also benefit women, say Ross Clare, director of research, ASFA, in a recent research paper.

If you would like more information about this article please contact us 

This information is of a general nature only and has been provided without considering your objectives, financial situation or needs. Because of this you should consider whether the information is appropriate considering your objectives, financial situation and needs.

Super Health Check

Before long your baby is an adult

Article first published by Colonial First state - 1 March 2018.  


It’s never too early to start planning for your retirement, so here’s some useful tips to boost the health of your super today for a more comfortable lifestyle in the future.

Even if retirement feels a long time away, it’s important to start thinking about when you’d like to retire, the type of lifestyle you want in retirement, how much debt you have and what assets (including your super) you will have when you finish working.

Are you retirement ready?

If you’re planning your financial future, a great place to start is to understand where you are today.

Our retirement calculator helps you estimate your projected retirement income from your super and other assets, to help you work out if you’re retire ready.

By entering in details such as your age, salary, super balance and other income, the calculator estimates how much income you could have per year when you retire.

You can then compare this estimated income to your desired annual income in retirement. If you have a shortfall, you can learn about strategies to help grow your retirement income.

Take the first step towards becoming retire ready by visiting our retirement calculator today.

While an online calculator can never replace personalised advice from an expert, it will help you get a clearer idea of where you stand today and how you could change your situation for the better.

If you’re planning your financial future, a great place to start is to understand where you are today.

How to boost your super

Want to see your super grow faster? Here’s five ways you might be able to add to your super savings today.

1. Salary sacrificing

Salary sacrifice is when you make additional contributions to your super from your pre-tax salary. These pre-tax contributions can help reduce your taxable income, meaning you can potentially pay less tax.

This portion of your income is generally taxed at just 15 per cent, which can be less than your normal marginal tax rate – helping you save money for your retirement.

Once you have worked out how much of your income you can comfortably contribute to your super, you need to arrange for your employer to regularly redirect this amount to your super instead of your bank account.

But it’s important to keep in mind that there are caps on the amount you can contribute to your super.  To find out more about the cap, contact us on (07) 4616 9000 to speak to our Specialists.

2. Consolidating your super

It’s a good idea to make sure all your super is in the same place. If you’ve changed jobs, different employers might have made your super guarantee payments to different funds over the years. This means you could have ‘lost super’ in accounts you’ve forgotten about.

If your super is in multiple funds, you also have to pay separate administration fees to each fund, which eats into your retirement savings.

On the other hand, if you roll over all your super into a single fund, you’ll not only save on fees but you’ll also find it easier to keep an eye on your money.

If you think you might have lost track of some super from past jobs, search for it online via the Australian Taxation Office website and consolidate it all into one fund to minimise fees.

Before making a decision, it makes sense to compare the costs, risks and benefits of your other funds against your current super fund. You should also consider whether you will lose any existing insurance cover upon rolling over and whether any cover you may have will be sufficient.

3. Don’t forget spouse contributions

If your partner earns less than $37,000 a year, you may be able to claim a $540 tax offset when you make a $3,000 contribution to their super fund.

The offset available reduces as your spouse’s income exceeds $37,000 or if your contribution is lower than $3,000, and phases out once your spouse’s income reaches $40,000.

But, this isn’t just about tax. The spouse contribution – which can also be made on behalf of a de facto partner or same sex partner – is a good way to boost the retirement savings of a partner who earns less or has taken time out of the workforce to care for children.

4. Get government assistance

Also, if you earn income up to $37,000, you may be eligible to receive a low-income super tax offset (LISTO) contribution into your superannuation account. This is a refund on the tax paid on your concessional superannuation contributions up to a cap of $500.

And if your spouse earns a low income, you could receive a tax offset up to $540 by contributing to their super fund for them. Find out more at the Australian Taxation Office website.

5. Know your limits

It’s important to keep in mind that there are caps on the amount you can contribute to your super.

The government imposes different caps on contributions depending on your age and contribution type. Additional tax applies if you exceed the contributions cap.

Find out more about super contributions caps.

Get the right advice - contact us today.

This information is of a general nature only and has been provided without considering your objectives, financial situation or needs. Because of this you should consider whether the information is appropriate considering your objectives, financial situation and needs.

10 ways to identify a failing business

1. Too much debt

If a company’s operations are mostly funded by creditors instead of the business owners, and it may have some difficulty servicing that debt, then it is under stress and may not be a valuable business partner.

2. Overexpansion

Overexpansion can quickly lead to cash flow troubles, even for experienced operators. This then leaves them running the risk of taking on large amounts of debt in a bid to keep the business going.

3. Lack of clarity

Clarity around what the business is trying to achieve is critical to its ongoing success.  If it’s not clear what the business does or how it generates cash, there is likely to be a significant amount of risk.

4. Qualified accounts / going concern commentary

Qualified accounts are audited accounts where the auditor has doubts or disagreements with the firm’s management.

Going concern commentary is not as serious as qualified accounts but it can be a sign that the auditor is protecting themselves from litigation but is still signing off on the accounts.

This is a huge red flag; don’t do business with a company showing these warning signs.

5. Profit warnings

Profit warnings are most commonly the domain of listed companies. 

6. Profit versus cash flow

It is important to differentiate profits from cash flow, as current profitability is not an accurate measure for determining the ongoing viability of a business.

Strong profits but little cash flow could indicate problems lurking behind the scenes, and can even be “a sign of dodgy accounting practices”.

7. Irregular payments

Another common indication a business is in strife is its payments become irregular – even if they make sizeable lump-sum payments at ad hoc intervals.

It’s a sign the company’s cash flow is compromised. Deciding to continue doing business with a company in this situation can depend on past payment history, current relationships, and the reasonable likelihood of the business getting its cash flow back on track.

8. Unstable leadership

Aside from finances, instability among a business’ management team and senior employees can indicate problems. Beware of a significant turnover among senior member of staff and management.

9. Trappings of success

When directors have high-end, brand-new cars, computer systems, and furnishings, it can be a sign that directors are rewarding themselves at the expense of the company.  

10. Late filing of accounts

It pays to dig into a company’s history of lodging documentation.

If the company files its accounts late, it could be a sign of general disorganisation or it could indicate that the business had trouble getting an auditor to sign off.

If your company identifies with any of these items on the list, do not fret, contact us and we can help you develop ways to improve.  

Simple Options to Improve your Personal Cashflow

It is very simple: To gain wealth, you must spend less than you earn.Being fiscally astute is not rocket science.

Let’s review simple options to help you turn your spending habits around and achieve a positive personal cash flow.

Settle bills by the due date unless there is an incentive to pay early. Your money is better placed to work for you in an interest-bearing account.

Pay off high-interest rate debt to free up money. This is your priority task. Debt is not a given. Break the cycle and pay off your debts. Pay as much extra off the debt as you can. This will ultimately reduce the amount of interest you are paying and save you money. Short-term pain for long-term gain.

Use credit cards as a means of delaying cash payments to manipulate your cash flow to your advantage.

Be market savvy. Keep an eye on the interest rates you’re paying on your debts and make sure they’re competitive. If they’re not, speak to your bank.

Evaluate your daily spending habits. Keep track of every item of expenditure for a month. It is probable that you will be shocked. Consider carpooling to work, making your own lunch and ditching the gym membership in favor of going for a walk with friends and family. You will be surprised how much you can save!

Be Mean. Develop an attitude toward cutting costs, no matter how small. Turn lights out when you leave a room, sleep on purchasing decisions, never impulse buy, etc.

Making changes to your spending can feel hard. Persist. Being cost-conscious will have a far greater and positive impact on your life.

If you are struggling to determine where your cash is disappearing to and where you need to stop spending to improve your wealth, contact DC Advisory Group today. We offer a Lifestyle Package which tells you where your money is going by linking directly to your bank account. 

By inputting simple information you can discover your overall financial position. You can store all your important documentation, such as insurances, wills and power of attorneys all in the one place.

This package is great to help you achieve your financial goals.

If you have any questions for us about the Lifestyle Package contact us.

Tax Planning - Minimise your business tax

Imagine what you could do with tax saved? 

IS YOUR BUSINESS A “SMALL BUSINESS” ENTITY? 

Small businesses can access a range of tax concessions from the ATO. To qualify as a “Small Business Entity”, the business must have an aggregated turnover (your annual turnover plus the annual turnover of any business connected / affiliated with you) of less than $10 million and be operating a business for all or part of the 2018 year. 

REDUCTION IN COMPANY TAX RATES FOR SMALL BUSINESSES 

The company tax rate for businesses with less than $10 million turnover is 27.5%. 

If you use a Trust structure, one strategy is to allocate profits to a “Bucket Company” and cap your tax at 27.5% for the 2018 year. Note that this company must have business operations to qualify for the reduced company tax rate. 

INSTANT DEDUCTION FOR ASSETS LESS THAN $20,000 

If your business is a Small Business Entity, the following tax concessions apply: 

• Depreciating assets valued at less than $20,000 will be immediately deductible 
• Depreciating assets valued at more than $20,000 will be depreciated in one pool at a rate of 15% in the first year and 30% in future years 
• If your pool balance at the end of the year is less than $20,000 before applying any other depreciation deduction, the entire pool balance can be written off. 

You should buy these assets before 30 June 2018. 

If your business is not a Small Business Entity, you will need to depreciate all assets purchased over $300. Any assets purchased for $300 or under can be immediately deducted. 

MAXIMISE DEDUCTIBLE SUPER CONTRIBUTIONS 

The concessional superannuation cap for 2018 is $25,000 for all individuals. Do not go over this limit or you will pay more tax! 

Note that employer super guarantee contributions are included in these caps. Where a concessional contribution is made that exceeds these limits, the excess is included in your assessable income and taxed at your marginal rate, plus an excess concessional contributions charge. 

For the contribution to be counted towards the employee’s 2018 contribution cap, it must be received by the fund by 30 June 2018. 

TOOLS OF TRADE / FBT EXEMPT ITEMS 

The purchase of Tools of Trade and other FBT exempt items for business owners and employees can be an effective way to buy equipment with a tax benefit. 

Items that can be packaged include handheld/portable tools of trade, computer software, notebook computers, personal electronic organisers, digital cameras, briefcases, protective clothing, and mobile phones. 

If structured correctly, the employer will be entitled to a tax deduction for the reimbursement payment to the employee (for the equipment cost), claim any GST input credit, and the employee’s salary package will only be reduced by the GST-exclusive cost of the items purchased. 

You should buy these items before 30 June 2018. 

PAY EMPLOYEE SUPERANNUATION NOW 

To claim a tax deduction in the 2018 financial year, you need to ensure that your employee superannuation payments are received by the super fund or the Small Business Superannuation Clearing House (SBSCH) by 30 June 2018. 

You should avoid making last minute superannuation payments as processing delays may cause them to be received after year-end. If for any reasons you end up having to make last minute payments and you would like to claim them as deductions for the current year, contact us immediately and before you make any payments for possible resolutions. 

DEFER INCOME 

If possible, defer issuing further invoices and receiving cash/debtor payments until after 30 June 2018. This strategy pushes tax payable to future years. 

BRING FORWARD EXPENSES 

Purchase consumable items BEFORE 30 June 2018. These include marketing materials, consumables, stationery, printing, office and computer supplies. Spend the money now and get the deduction this year. 

REPAIRS & MAINTENANCE 

Make payments for repairs and maintenance (business, rental property, employment) BEFORE 30 June 2018. 

DEFER INVESTMENTINCOME & CAPITAL GAINS 

If possible, arrange for the receipt of Investment Income (e.g. interest on Term Deposits) and the Contract Date for the sale of Capital Gains assets, to occur AFTER 30 June 2018. 

The Contract Date is generally the key date for working out when a sale occurred, not the Settlement Date! 

MOTOR VEHICLE LOG BOOK 

Ensure that you have kept an accurate and complete Motor Vehicle Log Book for at least a 12-week period. The start date for the 12-week period must be on or before 30 June 2018. You should make a record of your odometer reading as at 30 June 2018 and keep all receipts/invoices for motor vehicle expenses. 

An alternative (with no log book needed) is to simply claim up to 5,000 business kilometres (based on a reasonable estimate) using the cents per km method. 

INVESTMENT PROPERTY DEPRECIATION 

If you own a rental property and haven’t already done so, arrange for the preparation of a Property Depreciation Report to allow you to claim the maximum amount of depreciation and building write-off deductions on your rental property. 

PRIVATE COMPANY (“DIV 7A”) LOANS 

Business owners who have borrowed funds from their company in previous years must ensure that the appropriate principal and interest repayments are made by 30 June 2018. Current year loans must be either paid back in full or have a loan agreement entered in before the due date of lodgement for the company return, or risk having it counted as an unfranked dividend in the return of the individual. 

YEAR-END STOCKTAKE / WORK IN PROGRESS 

If applicable, you need to prepare a detailed Stock Take and/or Work in Progress listing as at 30 June 2018. Review your listing and write-off any obsolete or worthless stock items. 

Talk to us about your different options for valuing Stock, and how they affect your tax payable. 

WRITE-OFF BAD DEBTS 

Review your Trade Debtors listing and write-off all bad debts BEFORE 30 June 2018. Prepare a management meeting document listing each bad debt, as evidence that these amounts were written off prior to year-end and enter these into your accounting system before 30 June 2018. 

SMALL BUSINESS CONCESSIONS - PREPAYMENTS 

“Small Business Concession” taxpayers can make prepayments (up to 12 months) on expenses (e.g. loan interest, rent, subscriptions) BEFORE 30 June 2018 and obtain a full tax deduction in the 2018 financial year. 

TRUSTEE RESOLUTIONS 

Ensure that the Trustee Resolutions are prepared and signed BEFORE 30 June 2018 for all Discretionary (“Family”) Trusts. Please see us for more information about these resolutions. 

Talk to us TODAY, before the 30 June 2018 deadline for assistance to reduce your tax!

This article is provided as general information only and does not consider your specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.

Tax Planning - Minimise your personal tax

Imagine what you could do with tax saved? 

• Reduce your home loan 
• Top up your super 
• Have a holiday 
• Deposit for an Investment Property 
• Upgrade your Car 

KEY SUPERANNUATION CHANGES 

While you might not be flush with cash now and able to put large amounts into superannuation, it’s important that you are aware of what is possible to maximise your super balance and possibly reduce your tax at the same time. 

NEW CONCESSIONAL CONTRIBUTION CAP (CC) OF $25,000 FOR EVERYONE 

The tax deductible super contribution limit (or “cap”) is $25,000 for all individuals under age 75. Individuals need to pass a work test if over age 65. 

Consider making the maximum tax deductible super contribution this year before 30 June 2018. 

The advantage of this strategy is that superannuation contributions are taxed at between 15% to 30% compared to typical personal income tax rates of between 34.5% and 47%. 

Ordinarily, self-employed individuals and those who earn their income primarily from passive sources make super contributions close to the end of the financial year and claim a tax deduction. However, this is the first financial year that individuals who are employees may also use this strategy. 

Individuals who may want to take advantage of this opportunity include those who: 

• work for an employer who doesn’t permit salary sacrifice 
• work for an employer who allows salary sacrifice, but it’s disadvantageous due to a reduction in entitlements, and 
• are salary sacrificing but want to make a top-up contribution to utilise their full CC cap. 

SPOUSE SUPER CONTRIBUTIONS 

From 1 July 2017, higher income thresholds apply when determining eligibility for the spouse contributions tax offset. 

From this date, you may be eligible for a tax offset of up to $540 on super contributions of up to $3,000 that you make on behalf of your spouse if your spouse’s income is $37,000 p.a. or less (previously $10,800 p.a.). 

The offset gradually reduces for income above $37,000 p.a. and completely phases out at $40,000 p.a. and above (previously $13,800 p.a.). 

ADDITIONAL TAX ON SUPER CONTRIBUTIONS BY HIGH INCOME EARNERS 

The income threshold at which the additional 15% (‘Division 293’) tax is payable on super contributions has reduced from $300,000 to $250,000 p.a., effective 1 July 2017. Where you are required to pay this additional tax, making super contributions within the cap is still a tax effective strategy. 

With super contributions taxed at a maximum of 30% and investment earnings in super taxed at a maximum of 15%, both these tax points are more favourable when compared to the highest marginal tax rate of 47% (including the Medicare levy). 

GOVERNMENT CO-CONTRIBUTION TO YOUR SUPER 

If you are on a lower income and earn at least 10% of your income from employment or carrying on a business and make a “non-concessional contribution” to super, you may be eligible for a Government co-contribution of up to $500. 

In 2017/18, the maximum co-contribution is available if you contribute $1,000 and earn $36,813 or less. A lower amount may be received if you contribute less than $1,000 and/or earn between $36,814 and $51,812. 

If your business is not a Small Business Entity, you will need to depreciate all assets purchased over $300. Any assets purchased for $300 or under can be immediately deducted. 

MAXIMISE DEDUCTIBLE SUPER CONTRIBUTIONS 

The concessional superannuation cap for 2018 is $25,000 for all individuals. Do not go over this limit or you will pay more tax! 

Note that employer super guarantee contributions are included in these caps. Where a concessional contribution is made that exceeds these limits, the excess is included in your assessable income and taxed at your marginal rate, plus an excess concessional contributions charge. 

10 ways to reduce your tax 

OWNERSHIP OF INVESTMENTS 

A longer-term tax planning strategy can be reviewing the ownership of your investments. Any change of ownership needs to be carefully planned due to capital gains tax and stamp duty implications. Please seek advice from your Accountant prior to making any changes. 

Investments may be owned by a Family Trust, which has the key advantage of providing flexibility in distributing income on an annual basis and an ability for up to $416 per year to be distributed to children or grandchildren tax-free. 

PROPERTY DEPRECIATION REPORT 

If you have an investment property, a Property Depreciation Report (prepared by a Quantity Surveyor) will allow you to claim depreciation and capital works deductions on capital items within the property and on the property itself. 

The cost of this report is generally recouped several times over by the tax savings in the first year of property ownership. 

MOTOR VEHICLE LOG BOOK 

Ensure that you have kept an accurate and complete Motor Vehicle Log Book for at least a 12-week period. The start date for the 12-week period must be on or before 30 June 2018. You should make a record of your odometer reading as at 30 June 2018 and keep all receipts/invoices for your motor vehicle expenses. Once prepared, a log book can generally be used for a 5-year period. 

An alternative (with no log book needed) is to simply claim up to 5,000 business kilometres (based on a reasonable estimate) using the cents per km method. 

SACRIFICE YOUR SALARY TO SUPER 

If your marginal tax rate is 19% or more, salary sacrifice can be a great way to boost your superannuation and pay less tax. By putting pre-tax salary into super rather than having it taxed as normal income at your marginal rate you may save tax. This can be especially beneficial for employees nearing their retirement age. 

PREPAY EXPENSES AND INTEREST 

Expenses relating to investment activities can be prepaid before 30 June 2018. You can prepay up to 12 months of interest before 30 June on a loan for a property or share investment and claim a tax deduction this financial year. Also, other expenses in relation to your investments can be prepaid before 30 June, including rental property repairs, memberships, subscriptions, and journals. 

INSURANCE PREMIUMS 

Possibly your greatest financial asset is your ability to earn an income. Income Protection Insurance generally replaces up to 75% of your salary if you are unable to work due to sickness or an accident. The insurance premium is normally tax deductible, plus you get the benefit of protecting your family’s lifestyle if you cannot work due to sickness or an accident. It’s a small price to pay for peace of mind. Like rental property interest, income protection premiums can also be pre-paid for 12 months to increase your deductions. 

WORK RELATED EXPENSES 

Don’t forget to keep any receipts for work-related expenses such as uniforms, training courses and learning materials, as these may be tax-deductible. 

REALISE CAPITAL LOSSES 

Tax is normally payable on any capital gains. You should consider selling any non-performing investments you hold before 30 June to crystallise a capital loss and reduce or even eliminate any potential capital gains tax liability. Unused capital losses can be carried forward to offset future capital gains. 

DEFER INVESTMENT INCOME & CAPITAL GAINS 

If practical, arrange for the receipt of Investment Income (e.g. interest on term deposits) and the Contract Date for the sale of Capital Gains assets, to occur AFTER 30 June 2018. 

The Contract Date (not the Settlement Date) is generally the key date for working out when a sale or purchase occurred. 

IS AN SMSF SUITABLE FOR YOU? 

Now is a good time to seek specific advice in relation to this question, as it may be appropriate to establish an SMSF in conjunction with other tax planning opportunities, to maximise the benefit of the SMSF in your circumstances.

Talk to us TODAY, before the 30 June 2018 deadline for assistance to reduce your tax!

This article is provided as general information only and does not consider your specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.

Tax Planning - Contributing to super and claiming a tax deduction

With all the new contribution cap rules, it’s easy to forget that there is one way the Government has made it easier to save tax and get money into super. 

Before July 2017, only people who were self-employed could contribute money to super and get a tax deduction. 

The only way for employed people to do this was to salary sacrifice and get their employer to divert part of their pay to their super before it had been taxed. The problem with this is that you may decide after the fact that you would like to contribute to super, but the opportunity to salary sacrifice is long gone. 

Here’s the very good news! Since 1 July 2017, people under the age of 75 are now eligible to contribute money from their bank account to their super and claim a tax deduction for it (if certain conditions are met). 

This is especially useful for people who are on higher marginal tax rates or their employer refuses to set up a salary sacrifice arrangement. 

The people who would benefit the most are those who earn above $37,000 per year, as this is where the marginal tax rate plus Medicare Levy rises to 34.5%. Claiming a tax deduction on super contributions effectively makes your tax 15%. That’s a big tax saving! 

Things to remember: 

• There is still a $25,000 concessional contribution cap, which includes any guaranteed contributions your employer puts in and any salary sacrificing you do. 
• Personal contributions are only tax deductible if you ask your super fund to treat them that way. Therefore, there is paperwork to be done. We can help you with this. 
• Anyone over 65 must meet certain conditions to contribute to super, namely the ‘work test’. The ‘work test’ involves working 40 hours in any 30-day period in the financial year in which you plan to contribute. You must be paid for that work. 
• Claiming a tax deduction for your personal contributions means there may be tax payable on the way out of your super.

If you get unexpected bonuses, have a high marginal tax rate, or don’t like to or can’t salary sacrifice – this strategy may be something to consider! 

IMPORTANT 

Please contact us, ASAP for assistance with making your super contributions. There are a few things we need to check for you to ensure you don’t exceed your super caps, plus the timing of your contributions is crucial to get right to entitle you to a tax deduction for them in the 2018 year.

$4,200 - what does it mean?

Both high-income earners and the unemployed are accumulating high levels of credit card debt, but we're getting better at paying it off, new data suggests.  How do you operate your credit card?  Comment below.  Do you pay it off each month, do you pay the minimum or do you struggle to reduce the balance? 

One in five Australians (20 per cent) earning between $101,000 and $150,000 per annum now own three or more credit cards and hold an average of $5,978 in credit card debt, according to a finder.com.au survey of 2,085 Australians.

The survey revealed that the average credit card debt is $4,268, with the level of debt accrued generally rising with income.

Do you have a credit card?  If you do what do you use it for?  My husband and I have a credit card, our rule was never to put every day, household items onto it.  Milk, bread, petrol - to keep it for emergencies.  Like, when the kids fall off the swing and break a bone (not that they have done that.... yet!).  With the price of everything rising, we have found we have come to rely on our credit card more and more.

Who else find they are in the same boat?  

If you are struggling with everyday life and are struggling to achieve your financial goals, contact us  our Advisors maybe able to help you achieve your financial goals and break free of credit cards.

This information is of a general nature only and has been provided without considering your objectives, financial situation or needs. Because of this you should consider whether the information is appropriate considering your objectives, financial situation and needs.

5 questions to ask yourself if you are trying to save money

Article first published 9 March 2018 - Nestegg.com.au

There are myriad reasons to cut back on spending, and according to a financial educator, these are the five key questions that will help savers stay on track.


No More Practice Education chief executive Vanessa Stoykov said sometimes all it takes to improve a situation is to ask yourself the right questions.

“And if you don’t know what to ask, you can’t get a result,” she said. These are the five key questions savers should be asking themselves.

1. Is this the best deal I can get?

“It sounds basic, but we often don’t ask the question. The first suspects are your health insurance, utilities and super fund. It’s important to find out what fees you are paying, and ask the question,” Ms Stoykov said.

For instance, Ms Stoykov related, she discovered she was paying for unneeded maternity cover “long after the horse had bolted!”

“Nobody ever stopped to ask me did I still need it, and I never asked the question,” she said. “When I did, I saved myself over $100 per month – that’s $1,200 a year saved for asking the question of could I get a better deal.”

The same goes for utility bills, she continued, suggesting savers query whether there are promotions or plans to help them save.

“This can put major dollars back in your bank account, rather than theirs,” Ms Stoykov said.

2. How much can I invest in myself?

The educator explained that she works with a mindset of paying herself first. However, this can be hard, she acknowledged.

“Usually we pay whatever we need to, and whatever we have left is what we live on. This is ineffective because we are putting ourselves last – and to get ahead, you need to put yourself first,” Ms Stoykov said.

Noting that some people make sure they put away 10 per cent of their earnings prior to paying any other bills, she said it’s crucial that savers ask themselves how much they are worth and how they can invest in themselves more.

“Then open an account … that’s hard to touch and get it deducted the day your pay goes in! In a few months you won’t even notice it’s gone, and you have a tidy nest egg building up, and that feels good,” Ms Stoykov said.

3. Do I need this right now?

Usually the immediate answer is yes, but Ms Stoykov urged shoppers to keep this question in mind while out shopping, especially if they’re planning on putting the purchase on a credit card.

“If you don’t have the cash to pay for it, and it’s not a burning, critical, must have item, really question whether you need it. Because putting things on credit is just increasing the burden on you to keep working just to pay it back,” she said.

“Start thinking of how to make what you have last longer, or go further, and cut back on what you are spending on day to day.”

4. Can I get this cheaper buying online or in bulk?

The educator said convenience can be expensive, as buyers make purchases as is needed. However, by carrying out a bit of planning and research, they could save thousands.

“Google is the first port of call, and with online selling sites, and cheap bulk discount places like Aldi or Costco, thinking ahead and shopping around can save you a lot. Even buying in bulk and storing it can really work to get down your day to day shopping bills,” Ms Stoykov said.

5. What do I really want for my life?

Ms Stoykov said that while it seems like a daunting question, it’s an important one.

She explained, “By spending some time thinking about what you really want your life to be like, not just next week or month, but next year, five years and 10 years, you can start making some strategic decisions about life.”

For example, those that want to be travellers should consider how they can put more money away regularly and speed up the time in between trips.

Or, Ms Stoykov questioned, for those with their eyes on property, are there ways to live cheaply in the present or move to a more affordable area?

“Thinking long term can save you thousands of dollars making bad short-term decisions that don’t serve you and the life you really want,” she said. “This will be more fun than you think!”

At DC Advisory Group, we have Advisors and products that can help you with your budget needs.  Contact us today 

Five steps to spend less and save more

Five steps to spend less and save more 

One of the most common new year’s financial resolutions is “spend less and save more.”  It's time to check in on how you are tracking with your new years resolution.  Have you made progress?  Or have you given up already?

Kick-starting your savings resolution can be as simple as following the maxim: “spend less, save more.” However, we know that setting up this discipline can be a challenge, and research shows it can take 66 days to form a habit.

However, harnessing your goals can be achieved by following five steps: 

1. Set a savings goal;
2. Keep track of your spending: write down how much you have spent at the end of each day. At the end of each week add up how much you’ve spent in total;
3. Identify where you can make savings (for example, cutting down on bought lunches and takeaway coffees), and use these funds to start a regular savings plan;
4. Invest the funds. Your investment should be in line with your risk profile. Set up periodic payments or direct debits from your bank to make sure you stick to the plan;
5. Monitor the results of your investments on a regular basis: monthly, quarterly and six-monthly. Over time you may be amazed at how much you have saved.

To help you keep track of your funds easily, we have a wonderful product called the "Lifestyle Package".  

The Lifestyle Package includes 

• Monthly Lifestyle package subscription (Initial setup and training)
• includes personalised balance sheet and data input
• Goal setting and strategy session to look at current positions
• Financial planning session
• Retirement discussion
• Annual meeting to review position
• Cash flow budgets/set goals prepared and review annually
• Estate planning - review and recommendations
• Email and phone support

If you would like help to achieve your financial goals and are interested in the lifestyle package, contact us today!