News

Transition to Retirement Strategies

 

We see an opportunity for all clients, particularly those over 55 to get advice in relation to transition to retirement strategies.

In many cases these are both tax effective and also boost superannuation amounts in retirement with little to no change in your net income.

We recommend all of our clients seek further advice from us in relation to the tax implications of this, or discuss with their financial planner or we can recommend one.

The following article discusses transition to retirement in further detail. There may be tax changes in this area in the near future, so it would be advisable to take advantage of this before any legislative changes occur.

Access your super the smart tax way:

  • If you’ve reached your super ‘preservation age’ (currently 55 but rising to 60), you can take some of your existing super as an income stream to help make your transition to retirement a smooth one. This is called a transition to retirement (TtR) strategy. And it can be very tax effective.
  • You can continue to work and contribute towards your super using tax-effective salary sacrifice contributions.
  • You can top up your income with a tax-effective income stream from your retirement account (between 4% and up to 10% of the account balance can be drawn each year).
  • And there’s even a way to ‘refresh’ your TtR strategy every year for potentially even more tax benefits.

Any advice contained in this document is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Before making any decision, you should consider the appropriateness of the advice with regard to those matters and seek independent taxation and financial advice.

Credit and debit cards data-matching program

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The ATO has announced that it will conduct a data-matching program on credit and debit card transactions for the 2012/13 and 2013/14  years.

Data will be collected from the following financial institutions:

  •  American Express Australia Limited;
  • Australia and New Zealand Banking Group Limited;
  • Bank of Queensland Limited;
  • Bendigo and Adelaide Bank Limited;
  • BWA Merchant Services Pty Ltd;
  • Commonwealth Bank of Australia;
  • Diners Club Australia;
  • National Australia Bank Limited;
  • St George Bank; and
  • Westpac Banking Corporation.

Based on previous programs, it is estimated that over 8 million records will be acquired, relating to over 940,000 merchants.  These records are linked to approximately 90,000 individuals and 850,000 non-individuals.

Holiday rentals under the microscope

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The ATO has advised that it is sending letters to taxpayers in approximately 500 postcodes across Australia, reminding them to only claim the deductions they are entitled to, for the periods a holiday home is rented out, or is genuinely available for rent.

They advise that, to avoid making mistakes on their tax return, property owners should:

  • keep accurate records to ensure they declare the right amount of rental income and have evidence for claims made; and
  • only claim deductions for the periods the property is rented out, or is genuinely available for rent.

If a property is rented at below market rates, for example to family or friends, claims for deductions must be limited to the income earned while rented.

GST on all (taxable) online transactions from 1 July 2017

The (now former) Treasurer recently announced that the States and Territories had unanimously agreed in principle to reduce the GST threshold on imported goods and services (currently at $1,000) to zero.

The new arrangements will apply from 1 July 2017.

He said that he had put forward a proposal that relies on a vendor registration model as a method of collecting the GST.

As goods would not be stopped at the border, administering a vendor registration model would have a relatively low cost.

Non-residents (overseas suppliers) will be the ones who charge, collect and remit the GST for digital and physical products.

As is the case in Australia, only vendors with an Australian turnover of at least $75,000 will need to register and charge the GST.

NZ changes to GST imports to affect our exporters

Editor:  In a similar fashion, the New Zealand government has issued a discussion paper, entitled “GST: Cross border services, intangibles and goods”, the upshot of which is to levy GST on imports under the current threshold of NZ$400.

The proposed rules would require offshore suppliers to register and return GST, when they supply services and intangibles, which exceed a given threshold in a 12-month period, to New Zealand-resident consumers.

The paper proposes that there would be a wide definition of “services”, which would include digital services (such as video, music, and apps and other software downloads).

It would also include traditional services such as consultancy fees for legal, accounting, engineering, and other services.

At the present time there is no proposed start date, although the NZ government may decide to align their start date with Australia’s proposed start date for GST on imports under $1,000 of 1 July 2017.