July 2018

Are you?
– A business owner?

At a glance:
– Eligible businesses may elect to report GST annually.

You should: 
– Check your eligibility for annual GST reporting.
– Contact us if you require any clarification or advice.

Businesses may elect to report GST annually if they are not required to register for GST or if an election has not been made to pay GST by instalments.

A representative member of a GST group can only elect to report GST annually if each member of the group is eligible.

The election can generally be made between the following dates:

• July 1 and August 21 – for taxpayers reporting GST monthly; or
• July 1 and October 28 – for taxpayers reporting GST quarterly.

The election will be effective from the start of the earliest tax period of an activity statement that is not yet due and will not require a re-election each year.

However, at the end of each financial year, eligibility for annual GST reporting for the following year needs to be checked.

The lodgment and payment deadline for annual GST returns is either:

• The income tax return lodgment due date; or
• February 28 following the annual tax period, if the taxpayer is not required to lodge an income tax return.

For more information, click here.

Remember:
– Ensure that your business continues to be eligible for annual GST reporting once the election has been made.

This article was published on 31/06/2018 and is current as at that date

Are you?
– A taxpayer?

At a glance:
– Taxpayers may be liable for the Medicare levy surcharge (MLS) if they do not have appropriate level of private patient hospital cover.

You should: 
– Review your private health insurance policy and your level of private patient hospital cover.
– Contact us if you require any clarification or advice.

Taxpayers will be liable to pay the MLS once their taxable income reaches above the income threshold unless they have appropriate level of private patient hospital cover.

Taxpayers will often take out private health insurance under a general cover (ancillary cover) or full cover (with hospital cover).

As general cover does not include private patient hospital cover, taxpayers may be liable for MLS when they lodge their income tax return.

If a taxpayer is under the relevant income threshold, MLS will not be applied regardless of whether they have appropriate hospital cover or not.

Below is a table summarising the income threshold and the Medicare levy surcharge rate for the financial years of 2014/15 to 2017/18.

The family income threshold will increase by $1,500 for every child after the first.

However, taxpayers are not required to pay the MLS if their own income for MLS purposes is $21,655 or less, even though their family income exceeds the threshold.

Medicare levy surcharge exemptions may apply for certain taxpayers.

Remember:
– Taxpayers may be required to pay the Medicare levy surcharge when they are over the income threshold, unless they have the appropriate level of private patient hospital cover or an exemption applies.

This article was published on 31/06/2018 and is current as at that date

Are you?
– A person living in a remote area or serving in forces overseas?

At a glance:
– Living in a remote area or serving in forces overseas, may grant you eligibility for either Zone tax offset or Overseas forces tax offset.

You should: 
– Be able to determine your usual place of residence especially if you travel most of the time.
– Contact us if you require any clarification or advice

Zone Tax Offset

If your usual place of residence during the income year is in a remote or isolated area of Australia (zone), not including an offshore oil or gas rig, then you may be able to claim a zone tax offset.

If your usual place of residence is in a zone for less than 183 days in the income year, you may still be able to claim the tax offset, as long as it is a continuous period of less than five years and the following conditions are met:

• You were unable to claim in the first year as you lived there less than 183 days; and
• The total of the days you lived there in first year and the current income year is 183 or more.

Overseas forces tax offset

Serving in a specified overseas locality as a member of the following may grant you eligibility for an overseas forces tax offset:

• The Australian Defence Force
• The Australian Federal Police in the United Nations peacekeeping force in Cyprus
• A United Nations armed force, and your income relating to that service is not specifically exempt from tax.

You must serve in an overseas locality for 183 days or more in the income year to claim the full tax offset. If your service was less than 183 days, you may be able to claim part of the offset.

To find out more, click here.

Remember:
– If you qualify for both an overseas forces and a zone tax offset, you can claim only one of them.

This article was published on 31/08/2018 and is current as at that date

Are you?
– A taxpayer earning dividend income?

At a glance:
– Tax deductions may be available for expenses incurred in producing assessable dividend income.

You should: 
– Ensure that the expenses are for income-producing purposes before claiming a deduction.
– Contact us if you require any clarification or advice.

Expenses incurred in producing assessable dividend income may be deductible, including interest charged on money borrowed to purchase shares and other related investments.

Interest expenses can only be claimed if it relates to an income-producing purpose.

Taxpayers may also claim the ongoing management fees or retainers and amounts paid for advice in relation to changes in the mix of investment.

A portion of some expenses incurred in managing a taxpayer’s investments may also be deductible, including:

• Travel expenses;
• The cost of specialist investment journals and subscriptions;
• Borrowing costs;
• Internet expenses; and
• Depreciation of a computer.

If an Australian resident investor receives a dividend from a listed investment company (LIC) which includes a capital gain amount, a deduction of 50% of the LIC capital gain amount can be claimed.

For more information, click here.

Remember:
– Interest expenses must be apportioned between private and income-producing purposes.

This article was published on 31/06/2018 and is current as at that date