The pension loans scheme
To help pensioners who are asset rich but income poor, the government launched a version of a commercially available financial product, the reverse mortgage. The government’s answer is its pension loans scheme (PLS), whereby a pensioner can apply for a non-taxable...
Unpacking statute-barred debts
Various tax implications can arise when a debt becomes statute-barred. So what is statute barring and when can it be a problem? In simple terms, a debt is statute-barred when it has reached a statutory limitation period where it can no longer be legally recovered by...
Builders: Get your taxable payments report ready before August 28
Businesses in the building and construction industry, take note – the deadline is August 28, 2018 to report the total payments you made to each contractor you enlisted the services of in 2017-18. You will need to report these payments to the ATO on the Taxable...
The proportioning rule and your SMSF
When calculating a super benefit, it is necessary to identify and determine the value of the various components that make up the benefit. The law around superannuation dictates that the tax-free component and taxable components of a member’s payment must be paid in...
Managing tax disputes can be like wrestling with a superhero
It is sometimes said that a superhero like the DC Comics character Superman can be an uninteresting character because he is, for all practical purposes, indestructible. Critics have said the knowledge that he will most likely win can make Superman’s adventures...
How testamentary trusts work
A testamentary trust works in tandem with a will, and is similar to a discretionary trust, with the major difference being it only takes effect upon the death of the person who made the will. The trust can be funded by some or by all of your assets, and by payments...
2-minute quiz: Business deductions
How well do you know your business deductions? Try these questions to find out! QUESTION 1 A company’s financial accounts show the following information in relation to its bad debts and doubtful debts for the year: Closing balance for doubtful debts from the previous...
Superannuation contributions ‘work test’ for over 65s
Whether or not the trustee of a complying superannuation fund can accept member contributions for those aged between 65 and 75 depends on the member satisfying the “work test”. The work test requires a member to have been gainfully employed for at least 40 hours in a...
Interest destructibility after income-producing activity ceases
An issue that sometimes arises for business owners is whether interest expenses incurred on borrowed funds used in a business remain deductible after the business’s income earning activities have ceased. As a general rule, in order for interest expenses to be...
Franchise businesses and tax
The Australian Competition & Consumer Commission (ACCC) is the government body responsible for enforcing the Franchising Code of Conduct, and if you or someone you know are considering entering into a franchise arrangement, this will probably be a good starting...