Blog

The Federal Government has announced the following assistance initiative:

Australian Government Disaster Recovery Payment (AGDRP):

  • Immediate one-off financial assistance of $1,000 per adult and $400 per child;
  • Claimed through Centrelink; and
  • Applications close 4 July 2011.

This payment will be made available where:

  • A person is injured; or
  • A person is an immediate family member of an Australian killed as direct result of the disaster; or
  • A person’s main residence has been destroyed; or
  • A person’s main residence has sustained major damage; or
  • A person is unable to gain access to his or her main residence for at least 24 hours; or
  • The person is stranded in his or her main residence for at least 24 hours; or
  • The person’s main residence was without electricity, water, gas, sewerage service or another essential service for at least 48 hours, which was caused by damage to public or private infrastructure; or
  • The person is the primary carer of a dependent child and any of the above applied to the dependent child.

Recent articles

Welcome to our November 2018 newsletter

It’s November and, as always, the month gets underway with the race that stops the nation. The... https://eread.com.au/ellingsen/84704

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New Year Changes

January 1 was a significant date for many retirees. Not because it heralded a new year or the opportunity to commence those new year resolutions. It was significant because a number of changes were made to eligibility rules surrounding the Age Pension and the Commonwealth Seniors Health Care Card.

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Which Depreciation Method?

The tax law allows investors to choose between two methods of claiming depreciation on the fixtures and fittings in an investment property whether residential, commercial or industrial.

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Small Business Depreciation Write-off

The Budget announced that small businesses (aggregate annual turnover less than $2m) would be able to immediately write-off assets they start to use or install ready for use, provided the asset costs less than $20,000 – the existing write-off threshold is $1,000.

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Accelerated Depreciation for Primary Producers

The Government will allow all primary producers to immediately deduct capital expenditure on fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills. Currently, the effective life for fences is up to 30 years, water facilities is 3 years and fodder storage assets is up to 50 years.

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Capital Gains Tax Relief for Entity Restructures

The Government has confirmed that it will allow small businesses with an aggregated annual turnover of less than $2m to change legal structure without attracting a CGT (Capital gains tax) liability at that point.

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Meal & Entertainment Concession for not-for-profit Employees

The Budget confirmed the Assistant Treasurer's recent announcement that the Government would introduce a grossed-up cap of $5,000 per year on the FBT concessions for salary-sacrificed meal entertainment and entertainment facility leasing expenses (meal entertainment benefits) for employees of certain not-for-profit organisations.

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Small Business Tax Discount

Only around 30% of small businesses are incorporated (ie around 70% are sole traders, trusts and partnerships), so the reduced 28.5% rate will have limited effect.

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No FBT on Work-Related Electronic Devices

The Government will allow an FBT exemption for small businesses with an aggregated annual turnover of less than $2m that provide employees with more than one qualifying work-related portable electronic device, even where the items have substantially similar functions.

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Pre-30 June Super Contributions

Perhaps you are thinking about making a superannuation contribution before 30 June in order to claim a tax deduction to minimise this year’s tax.

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Shiny Investments

The purchase of precious metals as a self managed superannuation fund (SMSF) investment is growing in popularity.

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Budget 2015 Summary

On Tuesday night, the Treasurer Mr Hockey handed down the 2015-16 Federal Budget, his second Budget. The Budget Papers predict a deficit of $35bn next year, down to a $6.9bn deficit in another 3 years' time in 2018-19.

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Zone Tax Offset

"Fly-in fly-out" and "drive-in drive-out" (FIFO) workers will cease to be eligible for the zone tax offset where their normal residence is not within a "zone". Currently, to be eligible for the zone offset, a taxpayer must reside or work in a specified remote area for more than 183 days in an income year. It is estimated that around 20% of all claimants do not actually live full-time in the zones.

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Can I Do It?

Although “collectable” items are allowed as part of a self managed superannuation fund’s (SMSF) investment strategy, the laws limit the amount of personal enjoyment they bring to you personally as a member of a SMSF.

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Are You A Thrill Seeker

When it comes to protecting your income a lot of people assume they will be covered by their employer’s Workers Compensation policy.

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What Are My Options

The use of property options continues to grow in popularity. Property options are a form of property vendor finance which, up until that last few years, has been predominately used by large scale property developers to obtain the right to buy a property before a set future date for an agreed price.

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Work Related Motor Vehicle Expense

The Government says that nearly 4 million Australians claim a work-related car expense deduction each year. Currently, there are 4 different methods by which taxpayers can claim the tax deduction for work-related car expenses based on cents per kilometre, logbook method, the 12% of original value method, and one-third of actual expenses incurred.

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Thinking of Converting Your Main Residence

Recently we have received a number of queries regarding the implications of converting a main residence into an investment property.

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Myth Busting

The popularity of Self-managed superannuation funds (SMSF’s) continues to grow and grow and grow.

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Looking to Borrow?

One of the best ways to fast track your property portfolio is to maximise your “borrowable equity”.

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Changes to Age Pension Assessment Rules

This article highlights one change which seems to have gone largely unnoticed.There is much hype in the media at the moment regarding what changes may or may not be made in this year’s Federal Budget in relation to the Age Pension.

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Company Tax Cut

The Government announced, with effect from the 2015-16 income year (ie from 1 July 2015), a 1.5% cut in the company tax rate applying to small businesses (turnover less than $2m). That would reduce the tax rate applying to those businesses to 28.5%.

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SuperStream - Are You Ready?

he Australian Taxation Office (ATO) is urging trustees of Self Managed Superannuation Funds (SMSFs) to be ready for the 30 June 2015 deadline for SuperStream. From 1 July 2015 employers with 19 or fewer employees, will start sending SuperStream contributions electronically to all superannuation funds, including SMSFs.

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Can You Really Do That?

Investment property ownership continues to grow in Australia. Many employees, whether it be of their own company or trust or unrelated employer, may have a residential rental property or multiple properties.

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Looking at Purchasing an Investment Property

When it comes to buying property, there a few boxes that should be “ticked off” as part of your pre-purchase due diligence.

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SMSFs & Property Syndicates

Self-managed superannuation funds (SMSFs) remain one of the most popular vehicles when it comes to providing for one’s own retirement.

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Claimable Christmas Gifts

Well it’s the middle of February and Christmas is well and truly past us. However, many of you may have just finished or are still finalising your December quarter Business Activity Statements (BAS’).

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Employee vs Contractor....Again!!

What is the number one issue on the Tax Office’s agenda at the moment? Answer, are you a contractor or are you an employee?

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Changes to Queensland Real Estate Laws

On May 6 2014, the then Queensland Parliament passed four (4) Acts which replaced the Property Agents and Motor Dealers Act 2000 (PAMD Act). These are:

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Child Care Relief

Like many things in life, the cost of child care continues to grow and grow. The Federal Government recently announced an overhaul of their planned Paid Parental Leave which will now focus on providing further relief to a family’s child care expense bills.

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Don't Get Caught

We received a query from a client last month proposing a strategy involving his investment property and associated offset account.

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Immediate Deduction for Set-up Expenses

The Government has confirmed that it will allow businesses to immediately deduct a range of professional expenses associated with starting a new business, such as professional, legal and accounting advice. For example, expenses with establishing a company, trust or partnership.

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Increasing Interest Claims

We recently received a question from a client regarding the possibility of increasing the amount of interest he wanted to claim as a tax deduction.

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Industries in the Superannuation Spotlight

The Tax Office has recently issued a fact sheet identifying industries where employers are at greater risk of not making super contributions for their employees.

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Lost & Found

You have probably heard that there are billions of dollars in superannuation savings sitting as “lost”.

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Pre-CGT or Post-CGT

I was recently asked to advise on the application of the pre and post Capital Gains Tax (CGT) rules to the sale of a property.

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Sacrificing Your Salary

Following on from the earlier article regarding Super tips, this article provides a little more detail around the salary sacrificing strategy.

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Super Tips

With 30 June fast approaching, we thought it would be an ideal time to highlight a number of well known and perhaps not so well known tips to boosting your superannuation.

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What does the increased FBT rate mean for your business?

From April 2015, the rate of Fringe Benefits Tax (FBT) will increase from 47% to 49%.

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Does Your SMSF Hold Insurance?

Changes to superannuation regulations now require the trustees of Self-managed superannuation funds (SMSFs) to consider whether or not the fund should carry insurance to cover their members.

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Is it LVR or LMI?

When it comes to borrowing funds, there are many acronyms that are thrown around by lending institutions which are often misunderstood by borrowers.

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Bankruptcy & SMSFs

With the growing popularity and growth in the Self-Managed Superannuation Fund (SMSF) market, it is inevitable that the interaction of the bankruptcy rules and SMSF rules will come to a head.

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Whats Your Score?

Australia’s largest credit reporting agency Veda recently introduced a personal credit rating score. Available to consumers for the first time, the VedaScore expresses a number between 0 and 1200 summarising your credit history at a specific point in time.

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Do You Have Solar Panels?

More and more homeowners are installing solar panel systems on their homes.

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Thinking About Renovating?

By now, most people in the “property world” know that you can purchase an investment property in a self-managed superannuation fund (SMSF) with borrowed funds.

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Increase to Medicare Levy

As a reminder, effective 1 July 2014, the Medicare Levy increased from 1.5% to 2%.

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Too Much Super?

Whether you are dealing with your own Self Managed Super Fund (SMSF) or any type of superannuation, you need to understand the contribution caps that apply tosuperannuation. Otherwise there is a risk that if you will contribute too much into super and end up with a nasty excess tax bill.

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Insurance & Self Managed Super Funds

The rules governing what insurance may be held within a superannuation fund are changing.

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Death & Taxes

We’ve all heard the saying “there is nothing certain in life except for death and taxes”.

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What is the Margin Scheme?

Of late, a number of clients have contacted Ellingsen Partners to query the GST implications on the sale of their property.

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Changes to Privacy Laws

There is now less than 6 months for businesses to prepare for the changes made to the Privacy Act.

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The "Market Value Rule"

If you have ever lived in a property and then began to rent it out to produce income, then the application of the “market value rule” is something you need to be aware of.

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Reversionary VS Non-Reversionary - that is the question

Chances are most of you would have never heard of a reversionary pension and a non-reversionary pension.

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Nobody Wants to Pay Excess Tax

Did you know that excess tax of up to 93% can be payable if you contribute too much into your superannuation?

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Personal Property Security Register

Last year ASIC introduced the Personal Properties Security Register (PPSR).

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Pension Exemption Extended

The Government has made amendments to provide tax certainty for deceased estates in a situation where a person has died whilst in receipt of a superannuation income stream/pension.

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Are You Drawing a Pension From Your Super?

Once a taxpayer starts drawing a pension from their superannuation, a minimum amount is required to be paid each year.

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Massive Change to FBT on Motor Vehicle Fringe Benefits

Last month the Government announced their policy on FBT and motor vehicles titled “A fairer treatment for FBT on cars”.

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Increase in SMSF levy...again!

The Self-managed Superannuation Fund (SMSF) supervisory levy is increasing.

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What Does Your Credit Report Say?

When the time comes for you to approach a bank and apply for a small business finance application, it is standard practise for the bank to look at not only the businesses credit file, but also the owner’s individual file.

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The Private Health Insurance Rebate is now Income Tested

If you hold Private Health Insurance, you may have noticed that each adult covered on the policy received a Private Health Insurance Statement this year.

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What is Responsible Lending?

Under the proposed new National Consumer Credit Protection Amendment (Credit Reform Phase 2) Bill 2012, businesses, their bankers and their advisors will be required to think more carefully about the type of credit for which they are applying.

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Cancellation of ABNs

The Australian Business Register (ABR) is reviewing cancelling ABNs where records indicate holders are not conducting an enterprise and are therefore not entitled to an ABN.

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Made A Loss This Year?

In the 2013/2014 Federal Budget, the Government announced its intention to provide tax relief for companies by allowing them to carry-back tax losses so they receive a refund against tax previously paid.

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How Does Your Business Compare?

A recent case has highlighted how the Tax Office utilises and applies the Small Business Benchmarks (SBBs).

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Q&A

Question: In a few years, my partner and I will turn sixty-five (65) and we are currently looking at retiring. Our source of income will be around $60,000 from our SMSF plus around $150,000 a year from our rental properties. Will we pay tax when we retire and if so how much? Furthermore, if we will be paying tax, how can we reduce it?

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The Ever Expanding Data Matching Program

The Tax Office is requesting and collecting the user identification name and number, name, address, telephone numbers, date of birth, email address, registration date, number of monthly sales, value of monthly sales, the Australian internet protocol address and bank account details of approximately 11,000 sellers with sales of $20,000 and greater in the 2010/2011 income year through various online selling websites.

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Thinking About Borrowing through your Super Fund?

According to the Tax Office, many Self Managed Superannuation Funds (SMSF) are entering into the limited recourse borrowing arrangements (LRBAs).

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Are you in the Building & Construction Industry?

Last month the Tax Office began writing to businesses in the building and construction industry to provide more information about the lodging of the Taxable payments annual report.

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National Rental Affordability Scheme

NRAS or the National Rental Affordability Scheme can provide tax-free incentives of up to $10,000 for ten (10) years.

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Q&A

Question: What is stopping me from using my self-managed superannuation fund (SMSF) from purchasing a holiday rental investment property?

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Do You Need One of These?

There are times in a business where the business owner is no longer able to run the company which can leave the other business partners in a very awkward situation. Events such as death, divorce, retirement, bankruptcy or long-term disability can lead to a need to replace a business partner and acquire their share of the business.

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Did You Know?

If a rental property is jointly owned, each joint owner can claim an immediate write-off where their interest in a rental property deprecating asset is $300 or less, even if the overall cost of an asset exceeds $300.

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Sham Contracting

More and more employers are incorrectly treating employees as contractors and asking them to obtain an Australian Business Number (ABN) so that they can reduce labor costs.

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Decrease in Pension Deeming Rates

The Government has announced that it reduced the pension deeming rates from 20 March 2013 to benefit more than 740,000 pensioners by better reflecting returns available to them from their financial investments.

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Be Careful What You Sign!

In what seems a surprising result, the courts have held that the date of disposal of a capital gains tax asset was the date the Heads of Agreement was signed and not when the contract was signed some four (4) months later.

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Power of Attorney's & SMSF

I recently saw a person wearing a t-shirt which had Life = Risk in a large font on the front. If you think about it, there is a whole lot of truth in this slogan.

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Aged-Care - Its a Minefield!

Moving to an aged-care home is often a challenging experience for all involved. These challenges can be made harder by the financial and regulatory minefield a potential new resident (and their families) has to negotiate.

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Do You Have a Trust?

Earlier this year, there was a court case (FC of T v Bamford) decided that has major implications for all small business owners and investors who operate via a discretionary trust.

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Is Your Super Balance less than $2,000

Superannuation funds have until 31 May to transfer any balance that as less than $2,000 to the Tax Office.

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Do You Have Kids in Childcare?

If you have school-age children who need before-school or after-school care because you are working or studying, you may be able to get up to 50% of the fees back. Many people incorrectly assume that the childcare rebate is just for day care and don’t realise that they may be able to claim it for care outside of school hours.

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Q&A

Question: I purchased a property (property X) as my main residence in 2007 and purchased a second property (property Y) as an investment property five (5) years later in 2012. We intend to move into property Y and make it our main residence. We are thinking of selling property X. If we do, will we have to pay any capital gains tax? Property Y will then become our main residence. When we sell property Y, sometime in the future, will capital gains tax be involved? Alternatively, we could rent out property X. If we sell it later, will capital gains tax be based on the value growth of the house from when we rented it to the time we sell it?

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Private Health Insurance Penalty

The financial penalty for not taking out private health insurance by the time you are 30 is about to get nasty.

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Directors Refusing Appointments

With the increase in red tape and liability now associated with being a director, we are seeing more and more people refusing appointments and considering resigning from current roles.

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Q&A

Question: I paid a $5,000 deposit to purchase an investment property. After a few months I withdrew from the contract of purchase because of some financial concerns. But I didn’t get my $5,000 back because of my withdrawal. Can I show this as a loss to the Tax Office and claim a tax deduction?

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Average Payment Terms Blow Out

Recent Dunn & Bradstreet research shows that 62% of the businesses surveyed were settled late and more than 68% of the business owners said they expect to face cash flow challenges for their business in the coming months.

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1 July 2014 Changes

Well 1 July 2014 is now almost a quarter of the year behind us. Which means there is only a quarter of the year left in 2014!!

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Death and Taxes

We’ve all heard the saying from US inventor, entrepreneur and politician Benjamin Franklin in 1789, “in this world nothing can be said to be certain, except death and taxes.”

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Did You Know?

Did you know the limits for contributing funds into superannuation increased from 1 July 2014?

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Investor Seminar Expenses...What Can I Claim?

Over the last five to ten years the number of property investment seminars being spruiked has continued to grow.

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New Superannuation Rates & Thresholds

The Tax Office has updated the superannuation rates and threshold for the 2014 /2015 financial year.

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SuperStream....Are You Ready?

SuperStream is a Federal government reform aimed at improving the efficiency of the superannuation system. Under SuperStream, employers must make super contributions on behalf of their employees by submitting data and payments electronically.

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The Mining Tax is Gone...but at What Cost?

The mining tax has been repealed after passing the Senate following a Federal government deal with the Palmer United Party (PUP) to compromise parts of the legislation.

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Want to Increase Your Depreciation Claim?

I was recently reading an article that highlighted the fact that ownership of investment properties has increased 40% in the last three or so years.

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Payment & Lodgement Extensions for Activity Statements

As a result of the recent storms and flooding resulting from ex-tropical cyclone Ostwald, the Tax Office have granted the following payment and lodgement deferrals:

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GST & Going Concern

One of the requirements for the going concern concession to apply, is that there is an agreement between both the purchaser and the vendor regarding the application of this concession.

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You Now Have the Choice?

Traditionally new businesses are not entered into the Pay As You Go Instalment (PAYGI) system until after they have lodged their first business income tax return.

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Q&A

This month we will start a regular question and answer article. Question: We have an investment property owing $400,000 and a mortgage on our home owing $600,000. What are the tax implications if we shuffle $200,000 from our home mortgage to our investment property loan to benefit us for tax returns and negative gearing?

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Company or Individuals?

When deciding to establish a self managed superannuation fund (SMSF), one of the key issues to resolve is who will be the trustee.

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Private Health Insurance Changes

A recent Galaxy survey has found 53% of the 2.4 million members affected by the changes to the private health insurance rebate have not updated their income details with their private health insurance provider.

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Still Want to be a Director?

Earlier this year a raft of changes to the Tax Act passed through Federal Parliament that were to “protect workers’ entitlements”. In reality, they will have devastating personal consequences for well-intentioned business owners and directors.

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What Happens When I Die?

If all you own when you die is personal debt, that debt will die with you. From there, it gets a little more complicated.

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Christmas is almost here

There are now less 6 weeks sleeps until Christmas and no doubt many of you (employers) will be planning your Christmas festivities. In addition, many of you (employers) will be considering what gifts you will provide to your clients and employees. As always, an important issue to consider is the possible Fringe Benefits Tax (FBT) and income tax implications of providing “entertainment” to staff and clients.

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Use of Options When Buying a Property

These days obtaining finance can be one of the most challenging components of a property deal. Perhaps you have already maxed out your borrowing power with other projects or perhaps you are just not keen on using your own money.

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Back to School?

If your child is starting primary school or moving to high school next year make sure you don’t miss out on the Federal Government Schoolkids Bonus.

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Are You In The Cloud?

Cloud computing can offer businesses a great scalability and flexibility at a lower cost. But like any big decision, it’s important to be aware of any potential pitfalls.

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Changes to Bank Deposits

It is very popular to bag the banks when they fail to pass on any of the official cash rate cuts as announced by the Reserve Bank of Australia.

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Gympie Region Property Statistics

According to Australian Property Monitors in the 12 months to 31 August 2013, a total of 185 properties were sold in the Gympie area at a median price of $235,000.

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Baby Bonus vs Paid Parental Leave

We are often asked to advise our clients as to whether they should nominate to receive either the Baby Bonus (BB) or the Paid Parental Leave (PPL).

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Another Win for The Taxpayer

A recent court decision highlighted the “best practice” of including a written agreement within the contract of sale in order for the GST going concern concession to apply.

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Deductibility of Interest

I was recently reading an article highlighting the tax implications of renting out a granny flat.

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Are You Covered?

It would appear that repeated warnings about the importance of having adequate insurance continues to fall on deaf ears. How often do we see news headlines where home owners and businesses lose everything to fire or some other extreme weather event yet this has done nothing to encourage Australians to check that their policies provide adequate cover.

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More $ for Dads

The Federal Government will introduce a Dad and Partner Pay (DPP) for those who have a baby or adopt a child on after 1 January 2013.

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Super for Contractors

Do you utilise the services of contractors in your business? If so, you need to be aware that the definition of an employee for superannuation purposes can differ from the definition of an employee for other purposes.

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Can I claim the Interest?

With the decline in the value of shares and properties alike, quite often we are faced with a situation where a client may have excess loan(s) left over after selling their shares or property.

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Can I Claim for my Investment Property Expenses?

In Ormiston’s case the house wasn’t considered to be available for rent because it was undergoing renovations. Nevertheless, most of its expenses were deductible.

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Buying a "Luxury Car" ?

If you’re considering purchasing a new car, you need to be aware of the potential application of luxury car tax.

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PAYG Instalments

The Tax Office has advised that, from 1 July 2012, the gross domestic product (GDP) adjustment used to work out quarterly PAYG Instalment amounts will be 6%.

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Are You Claiming Enough?

I was recently asked by our local newspaper reporter what would be the single biggest claim I see most people not making in their annual tax returns. The answer was simple – investors not claiming enough, or any, depreciation on their investment properties.

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Lost Tax Receipts

Lost tax receipts cost one in two Australian taxpayers $1,000 in tax claims or $7.3 billion in total, according to a recent survey conducted by the Commonwealth Bank.

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Forgiven but not Forgotten

Lending of funds between entities is common amongst family groups.

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Do You Have a Credit Card?

The credit card provisions of the National Consumer Credit Protection Amendment (Home Loans and Credit Card) Act 2011 (NCCP Act), which came into effect on 1 July, aim to give consumers more control over their debt. However, not everyone will benefit in the short term.

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A Positive Change?

Every time you apply for credit it gets noted on your credit file. But what’s not recorded is whether or not that application was approved or rejected by you. So, if you have been a fan of balance transfer credit cards or you have haphazardly applied for several home loans to see who would say yes, then according to your credit history you’re a risk.

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Debtor Finance

The lending landscape fundamentally changed with the collapse of the financial markets in 2008.

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Increase to SMSF Supervisory Levy

Changes were recently made to the Self-Managed Superannuation Fund (SMSF) Supervisory Levy (the levy).

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Simplified Depreciation & Instant Asset Write-Off

As a reminder, small business taxpayers can now write-off all depreciable assets costing less than $6,500 (GST-exclusive), currently $1,000.

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Director Penalty Rules Expanded

The Government has recently introduced legislation that strengthens director’s obligations to ensure their companies meet their PAYG Withholding and superannuation obligations.

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Changes to Paid Parental Leave

The Government has announced that it will make changes to its 18-week Paid Parental Leave (PPL) scheme.

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SMSF & Property

Borrowing to buy an investment property isn’t the only option for a (SMSF) that wants to increase its exposure to real estate. An alternative is to buy a property with another investor(s).

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HELP Repayments

The Australian Taxation Office has issued the Higher Education Learning Program (HELP), previously known as HECS, repayment thresholds for the 2012/2013 financial year. They are:

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Guardians

Have you ever thought about who would look after your kids if something happens to you and your partner?

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Superannuation In Your Will

Many people incorrectly assume that their Will will dictate how their superannuation will be paid upon death. Your superannuation doesn’t automatically form part of your estate upon death and therefore may not be covered by your Will at all.

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Business Name Register

A new national register of business names commenced on 28 May 2012.

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Federal Budget - International

Non-resident taxpayers The personal income tax rates and thresholds that apply to non-residents’ Australian income will be adjusted as per the table below.

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Pre-30 June Super Contributions

Perhaps you are thinking about making a superannuation contribution before 30 June in order to claim a tax deduction to minimise this year’s tax.

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Receiving a Tax Refund?

From 1 July 2013, individual income tax returns lodged electronically were required to provide bank account details in order for the Tax Office to process your tax return.

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Taxable Payment Annual Report

From 1 July 2012, businesses in the building and construction industry need to report the total payments they make to each contractor for building and construction services each year. You will need to report these services to the Australian Taxation Office (ATO) on the Taxable payments annual report.

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Federal Budget - Superannuation

Deferral of higher concessional contributions cap In the 2010/11 Budget, the Government announced an increase to $50,000 in the concessional contributions (contributions claimed as a tax deduction) caps for individuals over 50 with low superannuation balances. This measure has been deferred by two (2) years to 1 July 2014. Therefore, individuals will only be able to make concessional contributions of $25,000 per year.

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Federal Budget - Companies & Finance

Company tax cut. The proposed cut to the company tax rate has been scrapped.

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Federal Budget - Individuals & Families

The below tax rates were announced when the carbon tax legislation was enacted and were confirmed in this year’s Budget.

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Economic Summary

Treasurer Wayne Swan handed down his fifth federal budget projecting a surplus of $1.5 billion for 2012/13. The Australian economy is expected to grow “around trend” over the next two (2) years while real GDP growth is forecast to be 3.75% in 2012/13 and 3% in 2013/14.

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Term Deposits

With the ongoing uncertainty plaguing the share market, more and more people are turning to term deposits as a safe haven for their investments.

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Changes to Super Guarantee

The Superannuation Guarantee (Administration) Amendment Act 2012 received royal assent on 29 March 2012.

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Instant Asset Write-Off

In May 2010 the Government announced an instant asset write-off and simplified depreciation changes for small business.

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Back To Basics

Recently a local tyre supply business was placed in to administration.

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A Win for Depositors

Recently a chief executive from one of the major banks in Australia was reported as saying that depositors will be better off in the future.

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Getting The Debt Mix Right

Recently I sat down with a couple to discuss to purchase of an investment property.

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Did You Know?

The capital gains exemption for the family home isn’t an “all or nothing” concession. In many cases, a house can qualify for a part exemption even though it has been rented out or used as a holiday home.

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Are You Eligible?

If you’ve reached pension age but don’t qualify for the pension from Centrelink or the Department of Veteran Affairs, you may be eligible for a Commonwealth Seniors Health Card.

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GST Refund Update

In our last edition we reported on a decision of the Federal Court in Commissioner of Taxation vs. Multifelx Pty Ltd regarding the prompt payment of GST refunds.

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Getting Your Refund Sooner

Many negatively geared property investors often find they’re short of cash because the rental income from their investments falls short of the cost of owning them. Many are often cash strapped due to the demand of their properties but want to continue to hold them. If the properties continue to grow in value, there is no reason to sell them off now.

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More Superannuation Changes for Employers

The Federal Government is making changes to the Superannuation Guarantee (SG) from 1 July 2013.

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Change to Fuel Tax Credit Rates

Most Fuel Tax Credit (FTC) rates changed on 1 July 2012, so check that you are using the right rate when calculating your FTC entitlements.

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How much is enough?

The aim of many property investors is to acquire as many properties as possible. However, it is not necessarily a case of how many properties, but the collective value of those properties and what the loan-to-value (LVR) ratio which will determine what the cash flow from your portfolio will be.

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Did You Know?

Below are some statistics for Gympie’s property market taken from the most recent issue of Australian Property Investor.

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ATO in Trouble Again!

Businesses can expect faster payments of GST refunds from the ATO as a result of a recent court ruling.

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Annual PAYG Instalments

If you are eligible, you will shortly receive your Annual PAYG Instalment notice. This is despite the fact the instalment is not due until 21 October 2012.

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Choosing a Home Loan

Choosing a home loan is a big decision and comparing home loans can be tricky. The Government has tried to make it easier by requiring all lenders to provide a “home loan fact sheet” when you ask for one and to make them available on their website.

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QRAA Interest Rate Changes

The Queensland Rural Adjustment Authority recently announced that they have cut their interest rates for the First Start and Sustainability loans.

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Customer Service

I’m sure you’ve all heard people comment that customer service is not what it used to be. It is interesting that most businesses would say that having good customer service is their number one priority.

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Did You Know?

Credit card reforms are coming our way from July this year. The changes will force credit card lenders to allocate payments to clear higher-interest debts first.

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Who Pays the Tax?

Parents need to be very clear about who declares interest earned on their child’s savings accounts.

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How much do you know about Medicare?

No doubt many of you have heard of Medicare. Basically, Medicare gives many Australian residents access to free or cheap healthcare. If you live in Australia, you are eligible for Medicare if you hold an Australian or New Zealand citizenship or have applied for or been issued with a permanent visa.

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Lodgement Dates for PAYG Withholding Reports

The following PAYG Withholding reports are due soon:

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Debt Collection - sometimes you have to do it

No matter what industry you are in, inevitably you will have debts that go delinquent and eventually end up requiring chasing. As the current economic climate continues, the amount of your debtors (the money owed to you) will grow and grow unless you put a system in place to keep on top of things.

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Education Tax Refund

Well it’s that time of the year again – back to school!! Many of you will be in the middle of purchasing all of the books, uniforms, bags, etc. ready for your children to start school later this month.

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Increase in Super Guarantee to 12%

The Superannuation Guarantee (Administration) Amendment Bill 2011 was enacted late last year to provide for an increase to the rate of the superannuation guarantee (SG). The increase will be phased in as per the below table.

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The Effects of Discounting

How many times have you been “advised” to drop your prices in order to win new business? Whilst we’re not saying this is “bad advice” how many of you know what the effect of discounting does to your bottom line?

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Superannuation Changes

On 29 November 2011 the Federal Government announced a number of changes relating to superannuation as part of its mid-year physical and economic outlook.

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New Credit Reporting Laws

Did you know that new credit reporting laws being rolled out by the Federal Government will allow late payments to be noted on Australian credit files after one (1) day? This has the potential of disadvantaging millions of potential borrowers and seriously hurting the already struggling real estate and mortgage industries.

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Personal Property Register

In February 2012, the Personal Properties Security Act (PPSA) is expected to commence thereby creating a single registry for security interests over personal property.

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Has Your Main Residence Been Compulsorily Acquired?

Capital gains tax (CGT) law now extends the main residence exemption to the compulsory acquisition of part of your main residence without the actual dwelling being acquired.

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Self-Managed Superannuation Fund Investments

From 1 July 2011, tighter standards will apply for all collectables and personal use assets purchased by self-managed superannuation funds (SMSFs). This will ensure that investments are made for genuine retirement purposes and not for current day benefits.

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New Look QRAA Loans

Queensland primary producers may now be eligible for loans up to $650,000 for a wider range of activities to improve enterprise productivity and sustainability thanks to improvements to Queensland Rural Adjustment Authority’s (QRAA) loans.

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Trust And Bucket Companies

Many small businesses these days operate through a discretionary trust with a company as trustee. This structure is the preferred option for a number of reasons, including asset protection and tax planning benefits.

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Do the Banks Really Want Your Business?

With housing credit recently slumping to its lowest base in almost two (2) decades, banks are relying on a recovery in business finance to help drive their profit growth.

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PAYG Instalments

Each year, the Australian Taxation Office (ATO) increases your Pay As You Go (PAYG) Instalments using a formula that takes into account the expected growth in the economy. This is known as the Gross Domestic Product adjustment.

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Looking for your Super?

Did you know that there a billions of dollars in lost super currently sitting in the SuperSeeker system?

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Change to Motor Vehicle Rates

For the first time since the 2008/2009 financial year, the motor vehicle cents per kilometre rates have increased.

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Self Managed Super Fund Borrowing

In September 2007 the law governing self-managed superannuation funds (SMSFs) was amended to allow SMSFs to borrow to purchase assets (subject to certain conditions). The conditions of the arrangement are:

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Capital Gains Tax - Real Estate - Part 14

If a person purchased their main residence on or after 20 September 1985 and they died and it passed to a beneficiary after 20 August 1996, the beneficiary is taken to have purchased the property at its market value at the time it was first used to produce income if:

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Measuring Marketing Success

Accountants are not known for their marketing skills, so it may sound strange to be reading about marketing in a newsletter from an accountant. Whilst we are far from experts in this field, we know marketing applies to all types of business, irrespective of their size.

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How is Business?

As a small business owner, how often have you been asked “How is business?” If you are like the vast majority of small businesses in Australia, you will probably answer that you are “doing it tough”. This time of uncertainty is a good opportunity to re-evaluate your business and to give your company a financial health check. A business’ financial fitness is one of its biggest assets, so we thought it would be appropriate to provide a few tips to help get your business “back in shape”.

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PPSR - A Real Life Example

Many of you may have heard of the Personal Property Securities Act (PPSA) or the Personal Property Security Register (PPSR) which came into existence on 30 January 2012.

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Bad Debts

Small business is being warned against extending credit to other businesses in an effort to win sales following a jump in bad debt claims.

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Christmas Parties

It’s now less than four weeks until Christmas.

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The IT Future

Whilst we are the first to admit we are no IT experts, we are called on from time-to-time to assist our clients in setting-up or upgrading their existing computer systems.

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Christmas Parties and Gifts 2011

There are only twenty (20) sleeps until Christmas and no doubt many of you (employers) will be planning your Christmas festivities. In addition, many of you (employers) will be considering what gifts you will provide to your clients and employees. As always, an important issue to consider is the possible Fringe Benefits Tax (FBT) and income tax implications of providing “entertainment” to staff and clients.

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Super Solution

Small businesses have long complained about having to do the government’s dirty work. Whilst there is no sign it will stop being the collector of the GST any time soon, it is at least being offered help for its other chore as the organiser and payer of everybody’s compulsory superannuation contributions.

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Capital Gains Tax - Real Estate - Part 13

If you do not qualify for a full exemption from CGT (refer last month’s article), you may be entitled to a partial exemption. You calculate your capital gain or capital loss as follows:

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Capital Gains Tax - Real Estate - Part 12

If you inherit a deceased person's dwelling, you may be exempt or partially exempt from CGT when it is sold.

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Did You Know?

It may surprise you to know that two (2) of Australia’s most publicised economic indicators – Unemployment and the Consumer Price Index (CPI) – are actually based on surveys.

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New Tax Rulings

The Australian Taxation Office (ATO) has recently released two (2) draft rulings which will have implications for many of our readers.

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Not-For-Profit Changes

It goes without saying that much is happening in the not-for-profit (NFP) sector. Recently we have seen the Australian Accounting Standards Board (AASB) release its “Reduced Disclosure Regime” standards with many NFP entities considering early adoption. We have also seen the Corporations Act amendments for company’s limited by guarantee and the Auditing and Assurance Standards Board (AUASB) release of updated guidance on auditing fundraising revenue.

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ATO Compliance Program

The Australian Taxation Office (ATO) has released its Compliance Program 2011/2012 outlining the key areas attracting its attention for the coming year.

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ASIC Fee Increases

Various Australian Securities and Investment Commission (ASIC) fees are indexed each financial year, based upon the Consumer Price Index (CPI) for the March quarter immediately before the start of the next financial year.

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Salary & Wage Tax Returns

Traditionally July, August and September are some of the busiest times of the year for most accountants as they look to process the salary and wage tax returns for their clients. The objective is simple – to maximise any tax refund owing to their clients. Ellingsen Partners is no different. If you are looking to have your salary and wage tax return prepared (or no somebody who is) please contact us. We charge a flat fee of $75 (inc. GST) for salary and wage tax returns, which includes anyone with a rental property.

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Superannuation

Did you know that you can contribute too much to super? In fact, it can result in you having to pay extra tax.

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Capital Gains Tax - Real Estate - Part 11 (cont'd)

Generally, if you build a house on land you already own, the land does not qualify for exemption until the dwelling becomes your main residence. However, you can choose to treat land as your main residence for up to four (4) years before the house becomes your main residence.

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What Goes Into A Business Plan

In our July newsletter we began considering what a business plan was and also what purpose it fulfilled. As promised, this month we will look at what actually goes into a business plan.

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Trust Law Changes

The Federal Government has announced that it will undertake a review and rewrite of the complex area of trust tax law.

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Surviving the Tough Times

For most business owners, times are tough. You are either struggling to “make a sale”, or you are struggling to get paid for that sale!

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ATO Data Matching

The Australian Taxation Office (ATO) has announced that it will collect information on amounts paid by 39 labour hire firms, placement agencies and computer consultancies.

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Capital Gains Tax - Real Estate - Part 9 Cont

If you purchase a new home before you sell your old one, both homes are treated as your main residence for up to six (6) months if:

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Federal Budget - Other Announcements

$281 million in additional tax-free payments to encourage apprentices in critical trades

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Federal Budget - Family Tax Benefit & Baby Bonus

From 1 January 2012, the maximum rate of Family Tax Benefit Part A will increase for 16 to 19 year olds.

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Federal Budget - Economic Summary

Budget deficit estimated to be $49.4 billion for the 2010/11 financial year, decreasing to $22.6 billion for the 2011/2012 financial year.

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Federal Budget - Superannuation

Effective, 1 July 2011 the Government will provide eligible individuals who breach the concessional contributions cap by up to $10,000, with a one-off option to request that these excess contributions be refunded to them.

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Federal Budget - Income Tax

No changes to personal tax rates, but don’t forget the flood levy starts from 1 July 2011!

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Are You Charging Enough?

Calculating the best price to charge for your product or service is perhaps one of the biggest issues you face as a small business owner. If you price too low, you will be out of business before you know it. If you price too high, you are out of the market. Get your pricing just right, and you will maximise your profits.

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Lets Save Some Tax

As we head towards to the end of the financial year, it is a good time to consider your tax position. This applies both to the business owner and the individual salary earner. Below are a number of “tax tips” that you should consider.

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Capital Gains Tax - Real Estate - Part 8 (cont'd)

If you start using part or all of your main residence to produce income for the first time after 20 August 1996, a special rule affects the way you calculate your capital gain or capital loss. In this case, you are taken to have acquired the dwelling at its market value at the time you used it to first produce income if all of the following apply:

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Tax Planning

The April to June period each year is seen by most accountants as the most significant time of the year. Why? Once midnight 30 June rolls around, not much more can be done to minimise your tax position.

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Busy But not Productive

In last month’s edition, we looked at a case study of a business that had major cash flow management issues.

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Do You have a Payroll Headache?

Many small business owners don’t need convincing when it comes to outsourcing their accounting or marketing. It makes sense to use experts in their respective fields and in the long run it will save you time and allow you to focus on your core business.

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Captial Gains Tax - Real Estate - Part 6 (cont'd)

If a CGT event happens to a dwelling you acquired after 20 September 1985 and that dwelling was not your main residence for the whole time you owned it, you are only entitled to a partial exemption.

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Looking for Office Space???

Do you know of anyone looking for an office to operate their business from?

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Education Tax Refund

If your house has been anything like mine during the last 3 weeks, you will know that school is back!

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Federal Government Flood Levy

By now I’m sure you have heard that the Federal Government proposes to introduce a levy to help pay the damage bill caused by the floods in Queensland and Victoria.

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Tax Treatment of Flood Assistance Payments

In our last newsletter, we advised that unless a determination is made to the contrary, we would expect that the Special Disaster Flood Assistance Grants ($5,000 and additional $20,000) would be subject to GST and income tax.

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ATO Assistance

Following the Queensland and Victoria floods, the Tax Office has announced a number of initiatives to assist those affected by the flood.

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Capital Gains Tax - Real Estate - Part 5

In addition to your main residence being exempt from capital gains tax, the land “adjacent” to the dwelling is also exempt if:

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Tax Treatment of the Grants

Unless a determination is made by the Tax Office to the contrary, we would expect both income tax and GST would be payable on the freight subsidy and the special disaster flood assistance grants.

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Flood Assistance - State Government Assistance

The State Government has announced the following assistance initiatives:...

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Flood Assistance - Federal Government Assistance

The Federal Government has announced the following assistance initiative:...

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Superannuation Reminder

As a reminder, if you are an employer and required to pay superannuation on behalf of your employees, you are required to make the payment within 28 days following the end of each quarter i.e. 28 January 2011 for the 31 December 2010 quarter.

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Capital Gains Tax - Real Estate - Part 4

The following factors may be relevant in working out whether a dwelling is your main residence.

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Want to Reduce Your Quarterly Tax Bill?

Have you received your December 2010 PAYG Instalment notice in the mail? Do you think the amount is excessive given your trading so far this year?

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Paid Parental Leave

Australia’s first national Government funded Paid Parental Leave (“PPL”) scheme is now law. The scheme kicks off from 1 January 2011 and provides mums or dads with 18 weeks of pay at the minimum wage.

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Contractor vs Employee

Yet again the Tax Office are on their soapbox regarding the employee v independent contractor debate. A recent series of cases has made it very clear that the day of the “independent contractor” is numbered. These cases involved market research interviewers, translators and a cutter and sewer.

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Incorrect Payment Summaries

Many of you employ workers and therefore issue payment summaries (previously known as group certificates) to your employees. Hopefully you would have noticed a change to the 2010 payment summaries.

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Fuel Tax Credits for Heavy Vehicles

From 1 July 2010, the fuel tax credit rate for diesel or petrol for use in heavy vehicles (GVM of greater than 1 tonne) on public roads was reduced to 15.543 cents per litre.

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Salary Packaging Rental Property Expenses

From 1 July 2009, the law changed in regards to the definition of income for a wide range of Centrelink benefits. Now any net investment losses or net rental property losses are “added back” to your taxable income to arrive at the figure on which benefits are calculated. As a result, many people are now receiving less benefits.

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Return on Investment

Businesses today operate in an extremely complex environment. A simple ratio will not be able to take into consideration all of the underlying complexities of a business and the issues it faces. Ratios should be utilised as a starting point, or as indicators to be investigated further.

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Capital Gains Tax - Real Estate - Part 3

Generally, if you are an individual you can ignore a capital gain or loss from the sale of your main residence. To get the full exemption from Capital Gains Tax (CGT):

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Capital Gains Tax - Real Estate - Part 2

Unlike with business assets, there is no rollover or exemption for a capital gain when you sell a rental property and put the proceeds into a superannuation fund or use the proceeds to purchase another investment property.

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Capital Gains Tax – Real Estate – Part 1

This month we begin a series of articles focusing on Capital Gains Tax (CGT). To begin, we will concentrate on the CGT rules as they apply to real estate.

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Engagement Letters

On the 1st March 2010, the Tax Agents Services Act 2009 (“the Act”) regime commenced.

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Superannuation Caps

According to Tax Office research, few taxpayers are aware that there are limits on how much superannuation can be contributed by any one person throughout a financial year where a tax deduction is sought.

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Pension Payment Relief Extended

Those of you who are drawing superannuation pensions, either from your own self-managed superannuation fund or a public-offer fund superannuation fund, will know that the Government reduced the required minimum pension to be drawn during the 2009 financial year.

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Planning your future

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