SMSF Events Based Reporting

You may have heard of Events Based Reporting but not quite sure what this means for you as a member of a SMSF.

The ATO’s initial proposal of Events Based Reporting had software providers, administrators and professional bodies scratching their heads at the thought of the additional administration and costs required to adhere to the ATO’s new requirements.

There have been many disgruntled conversations over the last few months regarding the impracticality of these new reporting rules from these parties.

The superannuation changes from 1 July 2017 certainly had us on our toes and as if these changes weren’t enough, the ATO started to talk about ‘events based reporting’ as a means to keep track of individual’s superannuation balances.

We have now heard good news that the ATO has taken on board the many suggestions and criticisms its proposals received and eased up on the reporting requirements they wished to implement.

When will Events Based Reporting commence?

The ATO announced that its implementation of SMSF event based reporting will commence from 1 July 2018.

SMSFs with member balances over $1 million:

Events Based Reporting will be limited to those SMSFs with members with total superannuation account balances of $1 million or more.  These SMSFs will be required to report Transfer Balance Cap events 28 days after the end of the quarter in which the event occurred.

SMSFs with member balances under $1 million:

SMSFs whose members’ total superannuation balances are less than $1 million can report Transfer Balance Cap events at the same time the SMSF lodges it’s tax return.

 

The ATO originally expected all SMSFs regardless of account balances to report Transfer Balance Cap events monthly!

The final proposal will save SMSF’s excessive administrative costs.

SMSFs solely in accumulation phase are not affected by Events Based Reporting as it only relates to transfer balance cap events.

If you are one of our valued clients likely to be affected by the above reporting changes, you will hear from us closer to 1 July 2018 to help you transition to the new reporting rules.

 

If you would like to know more information please Contact Us

Subdividing your property and Tax

If you live on a large sized block you may have at some stage thought about subdividing.

You might want to subdivide to make some profit, to generate regular rental income or to reduce your backyard maintenance.  You will need to think about what happens when you sell….

Generally, your main residence is not subject to capital gains tax when you sell it, but subdividing your land will create two (or more) separate titles which are now separate assets.  These subdivided properties will have tax implications when you sell them.

A few things to consider are:

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Remitting employee super payments when there is insufficient information

As an employer you are obliged to pay your employee their wages, remit their PAYG Withholding to the ATO as well as remit superannuation payments to their superannuation fund accounts.

In an ideal world, on the first day your employee starts work with you, they would complete their forms including a Super Choice Form informing you their superannuation fund account details for you to remit superannuation payments.

What if your employee did not provide enough information for you to remit superannuation payments, and the amount is due to be paid?

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Are you a low income earner?

An individual, who may be a low income earner, may not need to lodge a tax return where their income is below the tax free threshold of $18200.

However there are certain circumstances where you are required to lodge a return even if your income is below the threshold.

If any of the following apply to you, come and talk to us about lodging a tax return:

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Are you a US Citizen in Australia?

The USA is one of very few countries who tax their citizens on their world-wide income no matter where they are living overseas. This means that US citizens who live in Australia are required to also lodge US tax returns with the Inland Revenue Service. If you are a US citizen, living in Australia, it is important to let your Australian accountant know as soon as possible as there can be unforeseen consequences from your Australian business activities if caught up under the USA IRS’s expansive rules and regulations.

Photo Courtesy of Wikimedia Commons: By James Montgomery Flagg (http://www.usscreen.com/american_spirit/) [Public domain]

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