Question:
Take care with your Self Managed Super Fund!
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
Do you manage your own SMSF?. They are becoming very popular among savvy business people and high income earners because you can manage your own investments in the way you prefer.
But take care to follow all the rules. Penalties of extra tax and fines can be very heavy if you are caught breaching them. You cannot consider monies and assets in a SMSF as if they were your own. These investments are heavily regulated and must comply until you actually receive superannuation benefits.
In a recent case (Olsen v Early Sunshine Pty Ltd and ors) before the Federal Court, each of three directors of their SMSF received penalties of $18,000 because they had their SMSF provide loans to their operating company while it was experiencing short term cashflow problems during the Global Financial Crisis. These loans were outstanding for only a few weeks, mostly to pay salaries and wages.
When this occurs, the SMSF auditor must lodge contravention reports which notifies the Tax Office that something is amiss. This was done and the Tax Office then issued a Notice of Non Compliance. The SMSF lost its concessional treatment and had to pay $63,254 in extra tax.
These fines and tax penalties occurred even though the SMSF did not suffer any loss of capital as a result of the breaches.
From 1 July 2014, the Tax Office does not have to take SMSF trustees to Court, but can itself impose administrative penalties of up to $10,200 for certain contraventions of the Superannuation Industry (Supervision) Act.
WTB 2015/89
Andrew and Tony Lovett
11 February 2015
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Disclaimer: The information contained in this publication is for guidance only and we believe it is correct at the time of publishing. It should not be relied upon without obtaining professional advice regarding your circumstances. No responsibility for loss occasioned directly or indirectly to any person acting or refraining from acting wholly or partially upon or as a result of the material in this.
