March 2018

Are you?
– A business owner?

At a glance:
– The www.business.gov.au website has created a guide to explain the difference between a business name, a trading name and a legal name.

You should: 
– Ensure you register your business/trading name if required.
– Contact us if you require any clarification or advice.

The business.gov.au website has developed a guide to help distinguish the difference between business, trading and legal names.

A trading name is not a registered business name.

To continue using a trading name after 31 October 2018, businesses are required to register them, otherwise unregistered business name will no longer display on the Australian Business Register from 1 November 2018.

A registered business name helps customers find and identify the business.

A legal name is the name that will be used for all official documents and can be different from a business name.

If operating as a sole trader the business name and legal name can be the taxpayer’s own name if they choose to trade with it.

Generally the Australian Securities and Investments Commission (ASIC) will require a business name to be registered where a taxpayer decides to trade using a name other than their legal name.

For more information, click here.

Remember:
– Business name registration is not required when a business is operated under a taxpayer’s legal name.

This article was published on 28/02/2018 and is current as at that date

Are you?
–  interested in housing affordability measures?

At a glance:
–  The Government has recently passed the housing affordability measure: First Home Super Saver (FHSS) Scheme.

You should: 
–  Check your eligibility for this housing affordability measure.
–  Contact us if you require any clarification or advice.

The FHSS Scheme commenced on July 1, 2017.

Under the scheme, eligible people can make voluntary concessional (before-tax) and non-concessional (after-tax) contributions into a super fund to save for purchasing their first home.

From July 1, 2018, eligible people can apply to the Commissioner of Taxation for a FHSS determination and release funds up to a maximum of $15,000 from any one financial year and $30,000 in total across all years.

To be eligible for FHSS, a person must meet certain requirements, including:

• Age 18 or above;
• Not previously owned property in Australia;
• Not previously released FHSS funds;
• Either live or intend to live in the house you are buying as soon as practicable; and
• Intent to live in the property for at least 6 months of the first 12 months’ ownership after it is practical to move in.

In the year of request to release funds, taxpayers must include the FHSS amount in their individual tax return.

Funds will be taxed at their marginal rates less a 30% offset.

For more information click here.

Remember:
– Any people who meet the criteria may be eligible for the payments.

This article was published on 28/02/2018 and is current as at that date

Are you?
– considering renovating a property?

At a glance:
– There may be significant tax consequences of being classified as an individual carrying on a business of renovating a property (property flipping) rather than a personal property investor.

You should: 
– Keep records to demonstrate your intentions whilst developing property.
– Contact us if you require any clarification or advice.

If you are carrying out a profit-making activity of property renovation, also known as ‘property flipping’, in your income tax return you report the net profit or loss from the renovation.

The net profit or loss generally means the proceeds from the sale of the property less the initial purchase cost of the property together with any renovation and holding costs.

If you are carrying out a profit-making activity of property renovations you will not be entitled to the capital gains tax concessions or the main residence exemption.

Example of property flipping would include an individual purchasing a property with the intention of renovating the property and immediately selling the property upon completion of the renovation.

Factors indicating a business endeavour include:

• Researching multiple properties for profit making potential;
• Costing renovations for each property considered;
• Budgeting and cash-flow planning; and
• Consideration given to renovation time frames.

Living in the property while renovating does not preclude the renovation from being a profit making activity.

For more information, click here.

Remember:
– Living in the property while renovating does not guarantee that any profit made can be disregarded because of the main residence exemption.

Are you?
–  Considering winding up your self-managed super fund?

At a glance:
– There are numerous reasons why self-managed superannuation funds (SMSF) become no longer appropriate for its members and eventually most trustees will need to consider winding up their super fund.

You should: 
– Check the trust deed requirements as well as the legal requirements before extracting assets from the SMSF.
– Contact us if you require any clarification or advice.

Trustees may need to consider winding up their SMSF for a range of reasons including declining health of trustees, investment market pressure or relationship breakdowns.

Before winding up the SMSF and removing asserts from the fund, trustees need to consider and follow the requirements of the trust deed.

The trustees will then need to pay out or rollover all super assets, leaving a sufficient amount to pay the final tax liability and expenses, such as auditor fees, if required.

To pay out the assets to members, they must meet a condition of release allowing them to access to their benefits. If members do not meet a condition of release or do not want to access their benefits, then the trustees will need to roll over the benefits to another complying super fund.

Once the final set of financial statements and income tax return have been prepared, an audit of the fund needs to be completed by an approved SMSF auditor before the final income tax return can be lodged with the Tax Office.

Outstanding bills including any tax liabilities can now be paid.

Before closing the bank account, any remaining bank account amounts need to be paid out either to the members or rolled out to another super fund.

For more information click here.

Remember:
– Requirements of the trust deed and super laws need to be adhered to when winding up a SMSF.