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Full Summary

What the “full expensing” write-off deduction means 

The Federal Budget measure of allowing businesses to fully write-off eligible assets is a temporary boon to Australian businesses. To recap, businesses with aggregated annual turnover of less than $5 billion will be able to deduct the full cost of eligible capital assets acquired from 7 October 2020 and used or installed by 30 June 2022.

We explain

Claiming interest expenses for rental properties

Interest is a common deduction and is generally seen as being deductible where it is incurred in gaining or producing assessable income. An established factor from court cases is that the deductibility of interest depends on the purpose of and use of borrowing the principal. 

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Calling time out on your business? 

When you first went into business the last thing on your mind was when you would close the door for the last time. But it’s important to know what’s involved when the time comes to close your business.  We outline the steps to make the transition as smooth as possible.

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JobKeeper rules, conditions & payment rates have changed

Legislation has been put in place to extend the JobKeeper scheme beyond its original sunset date, although the rates of payment and certain other details have been altered. The scheme is now to run until March next year, with one version lasting until 3 January and another version in place from then until 28 March.

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Both tax and SMSF audits are still on ATO’s radar

While the ATO has been focusing on the rollout of stimulus measures, it has flagged that audit work is not off the table completely. While it was stated earlier that a “conscious choice” was made not to initiate new audits during the pandemic peak, the takeaway for everyone is that audits will not go away. So what are the main tax audit triggers?

The tax audit triggers

The investment option that can hide unexpected GST

New residential property is a popular investment for many, especially SMSF’s, however investors should be aware that it may bring with it unexpected GST obligations. The ATO says that from 1 July 2018, most purchasers must withhold an amount from the contract price and pay it directly to the ATO, and they will need to lodge two forms.

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Your super fund & insurance

From 1 July 2019, the government adopted new rules that aim to prevent the unnecessary erosion of people’s retirement savings through inappropriate insurance arrangements. As such, super providers, excluding SMSFs and small APRA funds, are unable to provide insurance by default when an account has been inactive for more than 16 months, that is if the account has not received any contributions or rollovers for 16 months or longer.   Read more

Rental property: Tax approach 

The COVID-19 pandemic has placed property owners and tenants in unfamiliar territory, with many tenants currently paying reduced rent or ceased paying. While rental income may be reduced, owners will continue to incur normal expenses on their rental property and will still be able to claim these expenses in their tax return as long as the reduced rent charged is determined at arms’ length.  We explain

Vehicles: instant asset write off

The extension of the instant asset write-off from $30,000 to $150,000 until 31 December 2020 provides an opportunity to look at its application to motor vehicles. As with all assets that are eligible for the instant asset write-off, the vehicle must be first acquired between 2 April 2019 and 31 December 2020 and must be “used or installed ready for use” from 12 March 2020 to 31 December 2020.  Read more

Work-from-home expenses

Have you been forced to work from home over the COVID-19 period? Get the facts on what can and can’t be claimed, and how to calculate these.  Or you have concerns about any consequent CGT issues when later selling a property from which people have been coerced to work from during this time.

We answer your questions

Early release of super extended

For individuals affected by the adverse economic effects of COVID-19, the government has temporarily allowed eligible individuals to access their superannuation early and tax-free -  from 24 September 2020 to 31 December 2020.  We explain

SMEs: ATO confirms JobKeeper payments do not contribute to aggregated turnover

Iit has been emphasised that JobKeeper payments are assessable income.  However some concerns had been raised as to JobKeeper payment status in regard to being statutory income or ordinary income, and whether it is ordinary income derived in the ordinary course of carrying on a business.

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Useful client resources

2020-21 Lodgment Rates and Thresholds Guide  Download

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