23 minute read
COLUMNIST ARTICLES
Director ID – A criminal offence if you do not apply in time
Warren Strybosch
The Australian Securities and Investments Commission (ASIC) is responsible for enforcing director ID offences set out in the Corporations Act 2001. It is a criminal offence if directors do not apply on time.
The ATO will start contacting new directors to encourage them to apply for their director identification number (director ID).
Directors who were appointed under the Corporations Act:
• before 1 November 2021, must apply by 30 November 2022. • between 1 November 2021 and 4
April 2022, must apply within 28 days of being appointed. • from 5 April 2022, must apply before being appointed.
Tax agents and accountants cannot apply for a client’s director ID on their behalf. A director must apply for a director ID themselves. The tax agent, bookkeeper or accountant can help their clients to apply for a director ID online by: • telling them when they need to apply • helping them set up their myGovID to a standard or strong identity strength • helping them with the documents they need to prove their identity when they apply online.
You can find more information about who needs to apply for a director ID at abrs.gov.au/deadlines.
Applying for a director ID online
Directors must set up their myGovID with a standard or strong identity strength before they apply for a director ID.
You will need at least two of the following Australian identity documents to prove their identity:
• Drivers licence or learner’s permit • Passport • Birth certificate • Visa (using their foreign passport) • Citizenship certificate • ImmiCard • Medicare card Directors will need additional information that the Australian Taxation Office (ATO) knows about them when they apply for their director ID online.
Directors will need additional information that the Australian Taxation Office (ATO) knows about them when they apply for their director ID online.
They’ll need their tax file number (not essential, but recommended), residential address as held by the ATO, and information from two documents to prove their identity. Your clients can use any two of these documents:
• Bank account details held by the ATO • ATO notice of assessment • Super account details • Dividend statement • Centrelink payment summary • PAYG payment summary
You can find more information about which documents can be used to prove your identity at abrs.gov.au/verify
#ReturnYourself
Are you a Financial Planner looking for more clients?
Grow your Financial Planning Business with great integrity and sensitivity by providing advice to those requiring Aged Care Services.
List in our Find Aged Care Accommodation Website.
Are you an established and experienced Financial Planner providing Aged Care Advice?
Find Aged Care Accommodation is seeking professional ‘aged care’ accredited financial planners to provide advice to those seeking aged care advice in their local area. Are you accredited and can help work with clients to find the best aged care options? Are you able to work with their loved ones and help make the process of transitioning into aged care less daunting and complex? If so, consider listing on our website.
List with us, and we will get you promoted through our website, social media, and local community papers.
Why not consider joining the Find Network as a specialist Aged Care advisor and obtain referral leads from the rest of the Find Network members in your area?
To learn more about these new opportunities, contact Warren on 1300 88 38 30 or email info@findagedcareaccommodation.com.au visit our website at www.findagedcareaccommodation.com.au
Did you know your digestion is key to your immune system?
NATUROPATH
By Kathryn Messenger
outside the digestive system), and a continual supply of these over time, results in a state of chronic inflammation, and altered immune function.
Whilst these systems may seem unrelated, they are actually closely linked. From a naturopathic view, a healthy digestive system is essential for all other aspects of health. After all, it is where all nutrients required to build and repair your body are absorbed, as well as where most metabolic waste products are excreted.
Leaky Gut (Intestinal Hyperpermeability) You may have heard of the term “leaky gut”. It is a condition in which the tight gaps between the intestinal walls are increased to allow substances other than nutrients, electrolytes, and water to enter the blood supply. The immune system is then activated to eliminate these substances which are toxic (when
The Gut microbiome
The intestinal bacteria plays a major role in leaky gut, as the bacteria form the first protective layer inside the intestinal walls. Many things can contribute to an unbalanced microbiome such as gastro viruses, stress, diet, and antibiotics. Obviously, the role of antibiotics is to kill bacteria, but it kills both the beneficial and the harmful. Care should be taken after antibiotic treatment to restore the beneficial bacteria which has been destroyed.
Prebiotics
fibre, whilst the damaging bacteria feeds on sugar and refined carbohydrates. Aim to eat 5 serves (where 1 serve is 1/2 cup cooked or 1 cup raw) of vegetables covering all the colours of the rainbow daily, as well as a variety of in-season fruit. This will encourage the growth of a diverse range of strong beneficial gut bacteria, which will restore an unbalanced microbiome and therefore strengthen your immune system as we head into winter.
Probiotics
To directly improve the beneficial bacteria, eat a variety of probiotic foods: yogurt, kefir, kombucha, kimchi, sauerkraut, or miso soup.
In some cases, a probiotic may be helpful, and various strains have been studied for specific immune diseases. For best results the correct strain(s) of bacteria for your condition, will give the best results.
“All disease begins in the gut” - Hippocrates 460BC – 375BC
Herbal medicine and nutritional
medicine offer natural options for
improving digestion, the gut microbiome
and regulating the immune system. A
naturopath can make a custom mix of
herbs or select the best probiotics to best
treat your unique symptoms.
Kathryn Messenger
Cruise Ships Return After Two-Year Ban
By (Australian Associated Press)
Australian authorities are lifting a ban on cruise liners that’s been in place since March 2020.
NSW, Victoria and Queensland have outlined testing and vaccination requirements for passengers and crew in preparation for the ships to return.
However, Tasmania is still reviewing whether such a move is safe for the island state. Peak body Cruise Lines International Association Australia says the lifting of the ban will be marked by “a carefully managed resumption of operations” in a sector that previously supported more than 18,000 jobs.
The first international ship scheduled to arrive, P&O Australia’s Pacific Explorer, will sail into Sydney Harbour on Monday morning in readiness for its return to service on May 31.
It will be followed at the end of the month by Ponant’s Le Laperouse, which will begin operations between Darwin and Broome on April 28, joining local operators in time for the important Kimberley season. “More than a million Australians took an ocean cruise every year before the pandemic and we now have an opportunity to return to sailing and revive an industry that was worth more than $5 billion annually to the Australian economy,” Cruise Lines Australasian managing director Joel Katz said.
“While no setting is immune from COVID-19, the cruise industry’s new protocols provide among the highest possible levels of prevention, detection and mitigation.” The move comes despite COVID-19 infections remaining stubbornly high.
ATO Debts – They will get their money eventually
The ATO will not always try to recoup debts owed by taxpayers immediately but place it on hold. This type of debt is called a non-pursued debt.
A non-pursued debt is a debt that is not visible on the balance of a taxpayer’s account on the ATO portal. When a debt is placed on hold, the ATO do not undertake any collection action, usually because it is not economical for them to do so. A debt deemed uneconomical for collection action will be re-raised at a later date if the taxpayer becomes entitled to credits, which will be applied to reduce the balance, or if their circumstances change.
So, if you see a debt removed from your tax portal account, don’t just assume the ATO has forgiven that debt. They just have placed it on hold and will most likely recoup it a later date.
ATO update on trust reimbursement agreements
ACCOUNTANT
By Warren Strybosch
In a media release on 5 May 2022, the ATO has “acknowledged there has been significant interest in its draft public advice and guidance relating to trust reimbursement agreements and unpaid present entitlements. In response to the level of community interest, the ATO said it will extend the public consultation period for the guidance, which ended on 29 April 2022.
ATO Deputy Commissioner Louise Clarke said "the ATO is aware that the guidance – which has been long requested by the tax adviser community – has unsettled some in that community because it calls into question some practices which have been relatively longstanding".
"The vast majority of small businesses operating through a trust are not operating in a way that will attract section 100A. A distribution to an adult child who has a low marginal tax rate will not attract section 100A where they simply receive or enjoy the benefit of their distribution".
Ms Clarke clarified that the section can only apply where a distribution is made under an agreement where there will be a payment or other benefit provided to some other entity, that will typically have a higher tax rate than the beneficiary, where a purpose of that agreement is that someone will pay less income tax.
"For example, where a full-time student receives an entitlement from a trust under an arrangement where they agree to immediately gift the entitlement back to the trustee".
"The ATO does not make law. We have not changed section 100A; 100A remains as it always has been. What we have done is publish what is at this stage draft guidance for consultation as to how we think the law applies,” Ms Clarke said.
"The ATO's position is that if the beneficiary of the trust gets the benefit, 100A has no role to play. The ATO is not concerned about ordinary family trusts where the relevant family members benefit from the distributions".
Similarly, Ms Clarke also noted that the ATO is not concerned when profits from the family business are distributed to members of the family who work in the management of the business and then that family member chooses to reinvest the profits in the business.
The ATO will not be pursuing taxpayers that entered into arrangements between 1 July 2014 and 30 June 2022 where, in good faith, they concluded that section 100A did not apply to them based on the previous 2014 guidance.
"I want to reassure the community - we won't have a retrospective element. We stand by our 2014 guidance for this interim period,” Ms Clarke said.
The ATO will carefully consider all submissions received during the consultation period as it finalises the package of public advice and guidance. A compendium of our responses to the feedback will also be published.
The question is whether this will mean the end of discretionary trusts as a taxeffective vehicle?
Lawyers are reminding accountants and family groups that the ATO does not make law and whilst they have released further guidance on the subject, it is yet to be made law and tested. They argue that there are many ‘common’ family arrangements involving discretionary trusts that will continue to be low risk. Some lawyers are going so far as to say that as long as the funds being distributed to the adult children are indeed being distributed e.g., funds going into their bank account, and regardless of how those funds are being used, this should not incur s 100A and trustees should have nothing to worry about. Some lawyers are keen for the ATO to take this matter to court as they believe the ATO will lose. However, the ATO is off the opinion that just because something happens frequently, or is accepted as a common practice, doesn’t mean it is an ordinary commercial or family dealing for the purposes of s 100A, and may challenge distributions going to adult children. Now, we wait and see, and trustees will have to decide whether to distribute funds to adult children is worth the risk this financial year.
Examples in the draft ruling include (but are not limited to) arrangements where:
• Distributions have been made to an adult child beneficiary and the entitlement to the funds representing those distributions have been applied for the benefit of another person (usually the parents), • Where an entitlement to income has been ‘gifted’ back to the trustee (or a parent) or otherwise forgiven, • Where there is a circular flow of funds (e.g., where the trust is a shareholder in a corporate beneficiary); and, • Where a trust acquires an equity interest in a corporate beneficiary under a share buy-back arrangement involving members of the family group (often the parents).
The ruling, whilst still in draft form and has raised some concerns amongst taxation professionals given the ATO have been working on draft s 100A guidance for more than 6 years. The lack of certainty for trustees and beneficiaries around the ATO’s tax administration approach will no doubt cause concern and may leave trustees at risk of assessments arising from distributions that are made going forward. Trustees should consider speaking to their accountant or lawyer with regard to s 100A if they have any concerns or doubts about their current trust distribution arrangements.
At Find Accountant, we provide SMSF tax advice. Our senior accountant is also an award-winning financial advisor. If you require SMSF advice or are considering whether or not to wind up your SMSF, then speak to Warren Strybosch at Find Accountant Pty Ltd.
Warren Strybosch
You can call them on 1300 88 38 30 or email info@findaccountant.com.au www.findaccountant.com.au
Superannuation – Some rule changes from July 2022 you need to be aware of.
FINANCIAL PLANNING
By Warren Strybosch
The superannuation system is always changing and this makes Australian’s nervous to place their trust in it. However, not all changes are bad news. The new reforms will benefit quite a few Australians and hopefully help them have more in retirement.
Many of the changes were originally announced in the May 2021 Federal Budget but took quite a while to make their way through both houses of Parliament. Some only passed in the dying days prior to Parliament rising for the 2022 Federal Election.
A. Increase in Super Guarantee percentage
For everyone who is entering the work force, the increase in the Super Guarantee (SG) will likely mean they will never have to worry about their retirement in the future. This ‘forced saving’ plan, over a 40-year period for those young adults, will provide a good nest egg for them, and it will also reduce a lot of pressure of the social security system.
From 1 July 2022, the percentage rate for the Super Guarantee (SG) increases from 10% to 10.5%. Employers need to be aware of the increase and will be required to contribute additional money into their employees’ super accounts. Under current laws, the percentage rate will rise again to 11% on 1 July 2023. It will continue rising 0.5% each year until it reaches its final rate of 12% on 1 July 2025.
B. Removal of the $450 monthly SG threshold
This is a win for those earning low incomes who are over 18 years of age. Commencing 1 July 2022, the $450 monthly minimum wage threshold to qualify for employer Super Guarantee contributions will be abolished.
This scrapping of the monthly threshold amount means employers are now required to make super contributions for all their employees (including casual and part-time employees) regardless of how much they earn. For those under 18 and working less than 30 hours a week, this measure will not apply to them.
C. Reduction in eligibility age for downsizer contributions
For those selling their principal home after age 60, should consider the downsizer contribution. The eligibility age for making downsizer contributions into super was reduced from 65 years to 60. This type of contribution does not impact the concessional or nonconcessional caps. From 1 July 2022, more people in their sixties can make contributions (up to $300,000 per person or $600,000 per couple) into their super account using the downsizer measure, provided they meet the eligibility criteria.
D. Increase in age limit for voluntary super contributions
Have you already retired and received an inheritance? Would you like to place those funds into super? Well, for those under age 75, now you can.
From 1 July 2022, anyone aged 67 to 74 who wishes to make a non-concessional, voluntary super contribution is no longer required to meet the work test (or work test exemption) to be eligible to make the contribution. The other normal eligibility criteria such as a Total Super Balance (TSB) of less than $1.7 million and sufficient unused annual nonconcessional contributions cap still apply.
The only exception is for people wishing to make a personal contribution into their super account and then claiming a tax deduction for the contribution. This type of personal concessional contribution still requires the contributor to meet the work test (or work test exemption).
E. Increase in age limit for salarysacrifice contributions
The age limit for making salary-sacrifice contributions into super without needing to meet the work test has also been increased from age 68 to 74. This means from 1 July 2022 eligible salary-sacrifice arrangements into super are available to anyone aged under 75 without the need to meet a work test. The other normal eligibility criteria such as a TSB of less than $1.7 million and sufficient unused annual non-concessional contributions cap still apply.
F. Increase in age limit for bringforward rule
Older super fund members who want to make a large non-concessional contribution into their super account can now do so from 1 July 2022. The reform lifts the cut-off age for using the bringforward rule to under 75 from under 67 previously.
This means people up to age 74 can use up to three years’ worth of their nonconcessional (after-tax) contribution caps over a shorter period. Eligibility to use the bring-forward rule will still depend on the contributor’s TSB at 30 June of the previous year and the total of personal contributions over the past two financial years.
G. Increase in First Home Super Saver
Scheme (FHSSS) limit
From 1 July 2022, the maximum amount of eligible contributions that can be released through the First Home Super Scheme (FHSS) increases from $30,000 to $50,000. However, the annual limit for voluntary contributions eligible for the scheme remains at $15,000 per financial year.
H. Temporary reduction in super pension minimum drawdowns
The government has extended the temporary reduction in the minimum drawdown rates by 50% for accountbased pensions and similar products in the 2022–23 income year.
I. Changes to the Home Equity
Access Scheme (HEAS)
Following passage of the Social Services and Other Legislation Amendment (Pension Loans Scheme Enhancements) Act 2022, older Australians who have applied to use the government’s HEAS can access lump sum advance payments from 1 July 2022. The maximum advance is capped at 50% of the maximum annual rate of their pension (including pension and energy supplements and rent assistance).
The legislation also introduced a no negative equity guarantee for HEAS participants to ensure participants with an outstanding loan balance on or after 1 July 2022 will not have to repay more than the equity they have in the property used to secure their loan.
List Your Aged Care Facilities with Find Aged Care Accommodation Today.
Help the local community know you exist and what sets you a part compared to other aged care facilities, Financial Planners and other providers in the local area.
We have developed Find Aged Care Accommodation (www.findagedcareaccommodation. com.au) so you can promote your facilities and services to the general public. You can also place any job vacancies on our website that is available in your facilities.
For more information, please contact us at 1300 88 38 30 or email info@findaccommodation.com.au.
COVID Grants – Now approved as tax-free income
By Warren Strybosch
The following COVID grants have been granted status as non-assessable non-exempt income (NANE) (basically tax-free income):
2022 Small Business Support Program (NSW); Commercial Landlord Hardship Grant (NSW); NSW Accommodation Support Grant (NSW); NSW Festival Relaunch Package (NSW); NSW Performing Arts Relaunch Package (NSW); 2021 COVID-19 Business Support Grants (Qld); COVID-19 Additional Business Support Grant (SA); COVID-19 Business Hardship Grant (SA); COVID-19 Business Support Grant - July 2021 (SA); COVID-19 Tourism and Hospitality Support Grant (SA); COVID-19 Business Support Grant (ACT).
For more information go to: Income Tax Assessment (Eligible State and Territory COVID-19 Economic Recovery Grant Programs) Amendment Declaration (No.3) 2022.
2022 TAX UPDATES
Small business technology investment boost
Small business skills and training boost
COVID-19 tests to be tax deductible
ATO scrutiny of family trust arrangements
Low and middle income tax offset
A business with aggregated turnover of less than $50 million will be entitled to a 20% additional deduction for expenditure relating to a digital business adoption. The additional deduction will be available for expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (2022 Federal Budget night) until 30 June 2023. There is a limit of $100,000 of eligible deductions able to be claimed by a business each income year but can be claimed on both business expenses and depreciating assets.
Small businesses will get an additional tax deduction on top of the allowable deduction for training their employees. Announced in the 2022 Federal Budget, a business with aggregated turnover of less than $50 million will be entitled to claim a 120% deduction for eligible expenditure. Eligible expenditure refers to external training courses delivered to a business’s employees by a registered training organisation in Australia.
The skills and training boost is available from 7:30pm (AEDT) on 29 March 2022 until 30 June 2024.
The cost incurred in taking a COVID-19 test will be tax deductible for individuals as long as the test was used for a work-related purpose. Although there was an argument to be made that an employee taking a COVID-19 test for work was already deductible under general provisions, the government has legislated it to provide certainty. Also, expenditure incurred by an employer to provide their employees with these tests for admittance to work will be exempt from Fringe Benefits Tax.
The new law takes effect from 1 July 2021.
On 23 February 2022, the ATO released TR 2022/D1 and PCG 2022/D1 in relation to distributions made by trustees of discretionary trusts. This was complemented by TA 2022/1, which discusses parents benefitting from the trust entitlements of the adult children. All 3 documents focus on schemes where income is diverted from an intended beneficiary in order to reduce tax liabilities. The rulings discuss these at detail and include significant attention to an important carve out for dealings that are “ordinary family or commercial” dealings. These dealings are excluded from the anti-avoidance provisions. Trustees need to make sure that their distributions are in accordance with the expectations of the ATO, otherwise they may be subject to an audit. Helping them understand their obligations is paramount coming up to the end of the current income year.
The low and middle income tax offset (LMITO) was introduced in the 2018 Federal Budget to commence from 1 July 2018. The offset runs in conjunction with the low income tax offset as a targeted reduction of income tax for Australian residents. Originally due to run over 4 years, in the 2020 Federal Budget phase 2 of the 3-phase 7-year income tax plan was brought forward. This effectively put an end date on LMITO of 30 June 2021. In the 2021 Federal Budget it was announced that LMITO would be extended to the 2021–22 income year. In the 2022 Federal Budget, the government increased LMITO for its final year by $420. However, unlike previous increases of LMITO, the final increase is available to all individuals below $126,000 in taxable income. The maximum LMITO of $1,500 is available in 2021–22 for Australian residents on incomes between $48,000 and $90,000 and will tapers off to $420 for individuals with a taxable income of $126,000.
Announcement(29-Mar-2022) Consultation Introduced Passed Royal Assent Date of effect
Announcement(29-Mar-2022) Consultation Introduced Passed Royal Assent Date of effect
Announcement(28-Mar-2022) Consultation Introduced(30-Mar-2022) Passed(30-Mar-2022) Royal Assent Date of effect(1-Jul-2021)
Announcement(23-Feb-2022) Consultation period(29-Apr-2022) Released
Announcement(8-May-2018) Consultation Introduced(30-Mar-2022) Passed(30-Mar-2022) Royal Assent(31-Mar-2022) Date of effect(1-Jul-2021)
2022 TAX UPDATES
Potential end for Div 7A and sub-trust arrangementsa
SA COVID-19 stimulus and relief package
A draft determination has changed the ATO’s position on how sub-trust arrangements apply within the context of Div 7A. Effectively, when a corporate beneficiary and trustee of the trust are ultimately the same people, Div 7A will apply directly to unpaid present entitlements (UPEs). The assumed provision of financial accommodation in practice means that sub-trust arrangements will have no benefit when it comes to deferral of tax or repayments of loans. When finalised, the determination will apply from 1 July 2022. A consultation period has recently been extended to 29 April 2022 and stakeholders are encouraged to have their say with the ATO.
Individuals who are currently in receipt of an Australian government allowance or pension will receive a one-off payment of $250 to ease the cost of living pressures. Certain concession card holders will also get the payment. Originally announced in the 2022 Federal Budget, this one-off payment has been legislated through parliament and will be exempt from tax. The payment will also be exempt from counting towards and individual’s income for social security purposes. It is expected that the payments will flow through to eligible recipients from 28 April 2022.
Individuals who are currently in receipt of an Australian government allowance or pension will receive a one-off payment of $250 to ease the cost of living pressures. Certain concession card holders will also get the payment. Originally announced in the 2022 Federal Budget, this one-off payment has been legislated through parliament and will be exempt from tax. The payment will also be exempt from counting towards and individual’s income for social security purposes. It is expected that the payments will flow through to eligible recipients from 28 April 2022.
Throughout the COVID-19 pandemic, the South Australian Government has implemented a range of stimulus payments for residents and businesses.
From December 2021, density restrictions in place may have meant that your client may have experienced a decline in turnover.
These support measures included:
• automatic payments for those also that previously received the COVID-19 Tourism and Hospitality
Support Grant
• • automatic payments for gym who qualified for the Additional COVID-19 Business Support Grant • • one-off grants for other eligible businesses that experienced a reduction in turnover, and • • new grants available for major events that were cancelled or postponed.
In the 2022 Federal Budget, a number of South Australian grants were added to the non-assessable nonexempt list, meaning they are tax free for businesses who received them.
Announcement(23-Feb-2022) Consultation period(29-Apr-2022) Released
Announcement(29-Mar-2022) Consultation Introduced(30-Mar-2022) Passed(30-Mar-2022) Royal Assent(31-Mar-2022) Date of effect(29-Mar-2022)
Announcement(29-Mar-2022) Consultation Introduced(30-Mar-2022) Passed(30-Mar-2022) Royal Assent(31-Mar-2022) Date of effect(29-Mar-2022)
Announcement(29-Mar-2022) Consultation Introduced(30-Mar-2022) Passed(30-Mar-2022) Royal Assent(31-Mar-2022) Date of effect(29-Mar-2022)
