Staff Updates
It is with pleasure that we advise that Jessica Jalkanen, who went on maternity leave in late 2016, has returned to work this month on a part time basis and will be available to answer any queries you may have.
Have your details changed?
To ensure that all your correspondence is going to the right place and that you are kept up to date with the latest information, if you have moved house or changed your phone number or email address, please email admin@veritassolutions.com.au with the new details.
Superannuation reforms now legislated
The following changes to superannuation law have now been legislated and passed through parliament after much debate.
- The introduction of the $1.6 million transfer balance cap – this affects those with superannuation pension account balances exceeding $1.6 million as at 30th June 2017. The account balances referred to includes all superannuation pension accounts – pensions from defined benefit funds (which require a special calculation), self-managed super funds, industry funds, retail funds and the like all get added together to work out your balance.
- The concessional contributions cap has been reduced to $25,000 from 1 July 2017. The Government will also include notional (estimated) and actual employer contributions in the concessional contributions cap for members of unfunded defined benefit schemes and constitutionally protected funds. This will affect CSS, PSS and Military super members who are currently making additional contributions via salary sacrifice. Many will no longer be able to make additional concessional contributions from 1 July 2017.
- Also 1 July 2017, the 10% test has been removed, meaning all individuals can claim a tax deduction for personal superannuation contributions up to the new cap rather than having to utilise salary sacrifice. It will depend on your personal circumstances to which method will suit you best but it does provide more flexible options to be able make extra contributions. If you chose to make personal contributions and wish to claim a tax deduction you will need to make sure you complete the required declaration form with your super fund. If your super fund is not notified they will treat the contribution as a non-concessional contribution by default.
- Individuals with a balance of less than $500,000 in superannuation will be able to carry forward unused concessional contributions caps for up to 5 years from 1 July 2018.
- The non-concessional contributions cap has been reduced to $100,000 from 1 July 2017 and is no longer available to those with account balances totalling more than $1.6 million in superannuation.
- Transition to retirement pensions (TTRPs or TRISs) will no longer have tax exempt status in the super fund from 1st July 2017, with earnings on those accounts taxed at 15%.
If you would like further details on these changes or are unsure if this affects you, please contact our office to discuss.
Macquarie Bank Cash Management Account – Important Changes Starting in February
Macquarie will be introducing the following new fees to their CMA product which a majority of our SMSF clients and many personal clients use, starting from February 1, 2017.
- A $10 fee for any withdrawal requests received by paper, email or fax for less than $20,000. A free service is available for online transfers up to $20,000 using your internet banking account.
- All cheque requests going forward will be issued as bank cheques, incurring a $10 fee each. There will be no change to cheque books. You won’t be charged a fee for any cheques issued from your cheque book although the $30 fee to purchase a cheque book remains.
To help you avoid these fees, there are several options that allow you to make payments and view transactions free of charge, including:
- electronic funds transfers (up to $20,000 a day)
- unlimited transfers to nominated bank accounts
- BPAY® payments (subject to BPAY® biller code limits) free of charge via online and mobile banking.
With just a couple of clicks, you can set up online banking at macquarie.com.au as well as download the Macquarie Mobile Banking app onto your smartphone (iOS or Android) to view your balances and transact on the go, wherever and whenever you want.
Did you know your contact details can keep your accounts safe?
To keep your account secure, Macquarie Bank need your current mobile number and email address.
Macquarie Bank sends secure codes via SMS or email confirmations to verify changes or transactions on your account, so it’s important they have your most up to date mobile number and email address. That way, Macquarie Bank staff can contact you to confirm payments and transactions or alert you if something looks suspicious when and as it happens.
Updating your contact details is easy – simply call Macquarie Bank on 1800 806 310 or call our office and our staff can assist with the necessary documents.
Letters from the Australian Business Register (ABR)
We have been informed that the ABR is reviewing their data online and Self-Managed Super Fund trustees may receive an email or letter informing you that your ABN details are out of date. If you receive such a letter from the ABR, please forward it to our office and we can review the register and confirm your details online.
Do you rent your place with Airbnb?
With Airbnb becoming more popular, the number of homes being listed in Canberra alone more than doubling in the past year, it is important to remember that the money you earn from renting out a room in your house is rental income.
This rental income needs to be declared in your tax return for the relevant financial year to avoid penalties and fines from the ATO. Airbnb is one area the ATO are using data matching technology to catch out undeclared income.
If you are renting out a room you can only claim expenses related to the part of the house being rented out and you need to apportion the expenses accordingly. This is generally done based on the floor-area used solely by the renter, plus a reasonable amount based on the renter’s access to common areas. Common expenses that can be apportioned include:
- interest on loans for the property
- council rates
- gas/electricity
- property insurance
- cleaning and maintenance costs
Expenses can only be claimed for when the room is available to rent. If you use the room for personal reasons between renters (eg as an office or for storage) you cannot claim deductions during this time.
Also note that CGT may apply if you sell the property used to earn rental income, even if the property is your main residence.
Deceased Estate Administration
Estate planning has long been an area of expertise amongst financial planners, with much effort being put in to establishing thorough Wills and Binding Death Benefit Nomination to ensure the desired outcome in the event of a persons death. This estate planning process provides executors with instructions on what to do when a loved one dies, but doesn’t tell them how to go about administering an estate.
At Veritas Wealth Solutions we are sadly often faced with clients who have lost a loved one, be it a spouse, parent, sibling or family member and consequently we have become experienced in all facets of estate administration. The truth about estate windup is that most of the process requires taxation or financial planning expertise rather than legal expertise, whether it is the sale and distribution of assets, notification to various organisations including the ATO and Centrelink, or preparing tax returns for the deceased, the estate or the resulting testamentary trusts.
Importantly, there are many decisions that are made during the administration of an estate that can affect the tax outcome and the long term wealth of the beneficiaries. Ensuring the estate is wound up in the most tax effective manner and that appropriate structures are utilised is the main focus for us at Veritas.
We are also experienced in the administration of Superannuation Death Benefits and effective application of both Binding and Non-Binding Death Benefit Nominations. Not everyone with Superannuation dies with a Death Benefit Nomination in place and this isn’t necessarily a bad thing. In many cases the most effective distribution of assets can be achieved when the executor has flexibility over the method of distribution (there are of course situations when BDBNs are absolutely recommended).
Being an executor can be a stressful time, especially trying to deal with the administration of the estate whilst grieving for the deceased. At Veritas Wealth Solutions we can make this process much simpler by taking over most of the required tasks to ensure a smooth windup of estate assets.
Hopefully most clients have a thorough estate plan prior to death, however many executors may still be faced with complex and extensive administration of assets. If you have a loved one die and require assistance with the windup and administration of the estate please do not hesitate to contact the team at Veritas Wealth Solutions.