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About Me

Brendan Curran

Current Rating: 4.87 / 5
Accountant
BPC Accounting Chartered Accountants
www.bpcaccounting.com.au
Newcastle, New South Wales
0437 864 594
Chartered Accountant, SMSF Auditor and Tax Agent. I enjoy any sport that has a leather ball, and many that dont. I moved to the coast over a decade ago after growing up in the bush, but still cant surf. I am passionate about getting my clients the best advice, knowledge is power, so the more information you have the better your decisions are going to be!!

My Activity

answered
Q: Hello,
My husband and I are recently married and in our mid-50s. We have been discussing setting up an SMSF and joining our super to invest in property and would like to know what steps we need to take, is there a certain percentage of our individual super we can only contribute or can it be all of it?
A: Todd has hit the nail on the head here Fiona. Whilst SMSF are great, they are complicated and you need to ensure that you know what you are getting yourself in for BEFORE you go setting one up.
And to give you an idea of the costs of getting it wrong consider this: if a SMSF is deemed to be non-complying it can be taxed as follows:
a) 45% of the funds income for the year
AND
b) 45% of the funds ASSETS too!!!
I must admit that I have never seen a fund get hit with 45% tax on its assets, but the ATO CAN do this.

so the moral of this story is that your retirement nest egg is VERY important, hence you need to make sure that if you want to manage it yourself, you know what you are doing!! This doesnt mean you need to memorise the SIS Act, but you need a good working knowledge of what you CAN and CANT do, and you need to engage experts to assist you in this.

And for Gods sake, dont go to one of those cheap-arsed online SMSF hawkers: the ones that promise you heaps, eg
- free setup
- free first years accounts
- guaranteed fees including audit $750

These cheap and nasty "service" providers make their money by forcing you to invest in a very small selection of assets: ones that pay them a nice commission. So, whilst you think you are getting a sweet deal, you are actually getting ZERO advice, and you are paying through the nose for it!!

if your accountant doesnt have CA or CPA tacked onto their name, ask questions!!!
If you planner doesnt have runs on the board and a list of VERY satisfied clients to talk to, ask questions!!

actually......ask questions anyway:):)

and good luck. Despite the horror stories there are a LOT of very happy SMSF trustees who are not being locked up for pinching their super early:):)

cheers
BC
answered
Q: I read an article suggesting the RBA should look at raising interest rates by 0.25% so what do people think, is now a good time to be locking in a fixed rate term?
A: I think that for every article that you can find that tells you rates are on the rise, you can find one to say rates wont rise anytime soon. I also suspect that if the banks' collectively dont see interest rates going up in the short term, they would be happy to lock as much as possible in (higher) fixed rate products......

a poofteenth of a percent one way or the other is really going to make bugger all difference to anyones life. Look at rates in the context of what has been perceived as normal. You dont need to go too far back in time when anything under 10% was seen as a sweet deal. My PB was 23.5% back in the mid 1990's .......and this was with one of the BIG FOUR banks.....now THAT was painful, so forgive me if I seem a little amused when someone paying 5.5% carries on like their throats been cut:)

Sooo, look at what you want to achieve: if its certainty you are after, then lock it in and deal with the slightly higher rates. If you want to ride the variable roller-coaster, then do that. Or hedge your bets like all the advisers tell you and lock in some and keep some variable.

But get some advice from someone who doesn't stand to benefit by way of a fat juicy commission on your mortgage. And be prepared to pay for it.

good luck

BC
question
Q: Further to my philosophical rant about corporate tax rates, what does everyone think about individual tax rates??? Is the marginal tax system the best tax system??? are the rates and margins right? Should the wealthy end of town pay more? Do low income earners pay enough??? Is the current system of rebates and government benefits based on income too complicated?? (YES!!!) Should families be taxed as "families" not as "individuals"????
cheers
BC
answered
Q: With the Federal Parliament, today securing personal income tax cuts is it now time for Parliament to do the same for company and business tax cuts. Let's rally Business Australia and share your thoughts?
A: Further to my philosophical rant about corporate tax rates, what does everyone think about individual tax rates??? Is the marginal tax system the best tax system??? are the rates and margins right? Should the wealthy end of town pay more? Do low income earners pay enough??? Is the current system of rebates and government benefits based on income too complicated?? (YES!!!) Should families be taxed as "families" not as "individuals"????
cheers
BC
answered
Q: With the Federal Parliament, today securing personal income tax cuts is it now time for Parliament to do the same for company and business tax cuts. Let's rally Business Australia and share your thoughts?
A: https://taxfoundation.org/corporate-income-tax-rates-around-world-2016/

I found this a very interesting article. I noted that the countries with the LOWEST corporate tax rates are not necessarily somewhere I would want to live. Because taxes pay for a whole heap of really cool things that we probably take for granted in Australia, like hospitals and schools and the like.

Dont get me wrong, I hate paying more tax than I have have to, but I also believe that you should "render unto Caesar that which is Caesars"...

I am not necessarily convinced that the presumption that a lower corporate tax rate will automatically trickle down into everyones pockets, because not everyone is as altruistic as they potentially need to be.

so there is always that conflict between letting people be the masters of their own destiny and allow market forces to dictate where the money goes, and having the moral compass to provide for those who may not be able to provide for themselves......that probably makes me a capitalistic communist (aka hypocrite)......and I doubt there is ever going to be a perfect answer for everyone.....

but for me, the idea of reducing the corporate tax rate is in principal a good idea, but there is a cost somewhere else.....and we dont get to decide who gets to pay that cost.....its in the hands of the incumbent government.....who are motivated by votes, not altruism.......

wow thats deep for a Friday morning isnt it!!!!!
answered
Q: Hi,
just a quick query. Any advice would be greatly appreciated.

My partner and I wish to purchase a home for 990k
We have 400k as a deposit and that is in the form of an apartment we have a sale contract on.
We have 25k in savings and we have an income of 6k nett a fortnight.

The issue is that I myself can not be part of the loan - I previously separated 4 yrs ago and had to take a part 9 debt agreement to continue on in life.

Without my income, my partners is 2k a fortnight,
however - for the past 12 months, one form of my income (superannuation) has been paid into her account and never touched (2k a fortnight). Will the bank be able to take this into account? What are her chances alone on that income to be approved?
I am asking because we would like to place our offer and don't want to be stuck in the dark.
Regards,
PartnerA1
A: Hi A1,

I think Craig is right in that you seem to have the cart before the horse.

Get your finances sorted, get approved for some money and THEN go shopping.

Right now you have too many things that can change to allow you certainty, so go get some certainty first:)

good luck
BC
answered
Q: Does someone (not working) need to lodge a tax return?

Circumstances: Over 65 and retired. Approx. $10,000 of investment income (including franking credits) plus an additional $10,000 of assessable capital gains (after 50% discount).

So, with SAPTO and LITO, they won't have to pay any tax. But, their total income is over the $18,200 tax free threshold.

On the ATO website on the 'do you need to do a tax return' tool, one of the things says "Does dividends and distributions exceed $18,200"? and if you pick yes, then it says you do need to do a tax return. Dividends/distributions haven't exceeded $18,200 but they've had a capital gain that has resulted in taxable income being over $18,200.

So, do they need to lodge a return or can they just submit a franking credit refund form for their franking credits?

Thanks,

Glenn
A: I would advise your client to lodge a return so that the capital gains are reported correctly. The trouble you have here is not so much the tax payable (or the franking credits refundable) but the fact that the ATO will have all the information on the sales of shares reported to them. What could happen is that the ATO will see a Return Not Necessary or a Franking Credit Return lodged and think to themselves "hang on!!! this guy has $50k in sales of shares that he is failing to report"

bear in mind that the ATO will only know the gross sale revenue from the disposal of shares. So the COST BASE of the shares wont come into it for the ATO. they wont give a shit how much the shares cost, they will assess your client on the GROSS REVENUE and then it will be up to your client to object to the assessment.

And trust me when I tell you that the process of objecting to an assessment issued by the ATO is long, slow, painful and expensive.

here is an example: One of my clients had a parent who was NOT a client of mine, and looked after her tax affairs as she didnt need any technical advice and was happy to lodge things herself. She was retired, sold her home and didnt report the CGT event in her tax return. (she had moved out of the property a couple of years earlier and rented it out, but the principal place of residence exemption still applied).

so this is what happened: the ATO knew a couple of facts:
1: she had previously reported rental income
2: she stopped reporting rental income
3: land titles office knew how much the house sold for and when it was sold

sooo the ATO sent her a notice of assessment based on the GROSS SALE PROCEEDS of the house!! the tax bill was $192k!!!!

needless to say, she near died of shock, and when she came to me with her problem, she had worked herself into a frenzy, and was halfway through pulling money out of a hefty term deposit to pay the bill. Once I figured out that the ATO had got the wrong end of the stick, it still took months of letters, emails and phone calls to straighten it all out. Had she reported the CGT event in her tax return with the correct (nil) assessable gain in it, the matter would never have occurred.

Your client will be infinitely better off if he just gets the return done properly in the fist place.

cheers
BC
answered
Q: Hi, I set up my own contracting business in April this year and have quite a bit of money owing with invoices due to be paid. When I left my old job in March I had quite a bit of holiday pay owing and paid more tax than normal so if the money owed to the business comes in after 30 June will it need to be included in this year’s tax returns as the invoices were dated pre 30 June?
A: Hi toni,
most small businesses elect to report their business actvity ona CASH basis. ie you declare ONLY the income that you receive, and only claim the expenses you pay by 30 June.
this is not a bad idea, because the idea is to match your tax liability to your cashflow. Also if you have a bad payer, you dont really ever want to pay tax on something you are never ever likely to see:)
And listen to Todd: go to your bean counter and run the numbers BEFORE 30 June
cheers
BC
answered
Q: Hi,

Just turned 50 and have $450,000 in my super. I want to diversify my investment portfolio and invest some money in a few start-up businesses through crowdfunding. Do I have to set up a SMSF and are there any restrictions on how much I can invest, I have been told no more than 20% of my super balance, is that correct?
A: thanks for the kind words James:):)

Stephen, your plan is unusual to say the least!!! I am not sure how the crowdfunding and a SMSF are going to tie in together, but it is very clear you need to get face to face with someone with the skills, experience and QUALIFICATIONS to help you. The more "boutique" the investment strategy in a SMSF, the more likely you are going to be under the microscope, and the more likely that you are going to run into hurdles with SMSF auditors, and also ATO auditors!!!! Because if the ATO gets the idea that your fund is some sort of tool to allow you to fund your own business and lifestyle on the sly, they will want to go through your books, and then you, like a dodgy curry!!!
Get in front of someone who can advise you clearly on what you can and cannot do with a SMSF. They are really a wonderful vehicle for the accumulation of wealth to fund your retirement. They arent good for much else. And do some reading yourself
https://www.ato.gov.au/Super/Self-managed-super-funds/Thinking-about-self-managed-super/
the more internet searching you do the better. Please dont get sucked into anything that looks like an online platform for setting up and running your super on the cheap!!! But do get informed!!!
good luck
bc
question
Q: This is my favourite story about a taxpayer who walked in planning on going to jail and walked out the happiest man in Lake Macquarie.
Ron (whose name has been changed for obvious reasons) had failed to lodge a tax return for 17 years 17 YEARS!!!!!!! He got busy for a few years and kept putting it off and then got nervous about being late and getting fines, so he just stopped altogether, and the longer this went on the more terrified he became about getting in trouble, and the less likely he was to get his affairs in order.
Meanwhile, his wife Jill, who had no clue what was going on, kept all his receipts in a shoebox, with his group certificate and bank statements every year and gave it to him on an RDO and told him to go get his shit sorted. Every year
You know what Ron did???? He went to the pub, every year and every year he would sit at the pub staring at his shoebox of pain and consider how much he would enjoy sharing a cell with Bubba. and then he would go home, tell Jill he was all sweet and the refund was on its way........he even gave Jill a bit of cash every year to perpetuate the myth, a few weeks later.
So after 17 years of living in terror, Ron finally worked up the courage to come have a quiet chat with me......and he was seriously the most miserable-looking bloke you could ever see in a reception.....you would have thought I was gonna tie the noose around his neck.
Ron had no idea that for each and every year he was entitled to a refund, and as it turned out, it was not an insubstantial refund for each year.....because god bless his employer, who failed to update his tax tables regularly, so the PAYG W was overcooked by a significant margin.
So when I did all his returns and called him in to get the news, he came in, sat down and sighed and then said, "right son....what is the damage?"
"Well, Ron, after claiming all your work-related deductions, and taking into account rebates and whatnot, the total amount is $42,000"
"$42,000!!!!! Where am I gonna find $42,000???? My missus is gonna KILL me!!!"
"No Ron, I think you misunderstood me mate. It’s a $42,000 REFUND mate."
Ron got himself a new set of dentures, took his wife on a long-overdue holiday, and paid a big chunk off his home loan.
Needless to say, Ron is now my first tax return each and every year now.
Good old Ron......puts a smile on my face every time I see him. He is my biggest fan, and I get a kick out of seeing him every year!!
answered
Q: Hi there, I was made redundant 4 months ago and had a novated lease with my previous employer. I have now been offered a 'vehicle hand back option' regarding the car from the Lease Protection insurance company. They will cover up to 25k (less car payments and petrol costs already paid) if I hand back the car to the financier. The current payout figure is 39k on a 2016 Jeep Grand Cherokee. Is there anything I need to consider before I decide?
A: Hi Fiona,
can I start by saying that I have never been a fan of novated leases. If you take into account the fact that you are required to make a contribution to your employer as part of the whole FBT nightmare that comes with providing vehicles to employees, you will not be any better off. The literature from the leasing company never makes this connection, and all they want to do is bang on about tax savings......trouble is that the employee contribution ALWAYS ends up being exactly the same as the amount of tax you save.....funny that.
so now that I have had my little rant here is my two bobs worth on your situation: be VERY VERY VERY WARY of Greeks bearing gifts!!!
you need to get an EXACT figure of what you are going to be up for, and compare this with the fact that if you maintain the lease, you will eventually end up owning the car, which itself has a value......
the thing that makes me nervous is that you currently owe $39k on a vehicle worth substantially LESS than $39k, and trhey propose to pay you an indeterminate amount to hand back your vehicle.
I would want to be EXTREMELY confident that you are not going to end up with no car and a financial liability to service before I signed up to anything.
hopefully there is an equipment finance guru out there who can help you with more specific advice
good luck
bc
answered
Q: I have just started working for a new employer as a full time Sales Representative and the employer is paying fortnightly a car allowance reimbursement. Car allowance of $20k annually which also includes fuel and running costs. I am not sure if I should purchase a new or used car or lease a car and which is the best option tax wise, given the car will be used for business purposes 80- 90% time? Thank you Gen.
A: Hi Gen.

I presume the payment you will get is an ällowance" as opposed to a "reimbursement" The reason for this distinction is that that an allowance is something you will pay tax on, whereas a reimbursement is not going to appear on your group certificate, and hence you wont pay tax on it.

so, on the assumption that you are being paid an allowance, and you are expected to catch and kill your own vehicle, then the FIRST thing you will need to do is get a log book and FILL IT OUT!! If you dont have a properly completed log book you can only claim a very small amount in your tax return.

Then you need to get in the habit of paying for ALL your car expenses using a debtit card so you have a good simple way to track your expenses. AND KEEP ALL YOUR RECEIPTS!!!!!! the ATO is going batshit crazy right now on people who want to claim large amounts of car expenses, and you will be one of these people.

to give you an example of the difference to your tax refund a large car claim can make, have a look at this example:

sales rep on $120k, including a $20k car allowance.

car expenses:
fuel 5200
rego 1150
insurance 900
servicing 700
tyres 2000
depreciation 6000
interest on finance 3000
total car exp 18950

log book % 90%
claimin tax return 17055
tax benefit 6480 (ish)

if you dont have a log book, then you are limited to 5000km @ 66c/km = 3300.
tax benefit = 1250 (ish)

SO a log book (and all the documents) will put an extra $5000 in your pocket!!!!!!

as to what to buy, the benefit of having a new car is that you get the new car warranty and smell, and maybe the finance might be a lower rate than second hand....

or you can buy (and still finance) a second hand car for a LOT less than a new car.

What I aim for is generally a good second hand car with not too many miles up on it, and drive the thing until the wheels fall off.

but that is up to you...it depends on whether you like the idea of a new car or not.

find a GOOD bean counter to help you with the log book and documentation stuff!!!

cheers
BC
answered
Q: Hi,
We put an offer on a property today in Glenwood, in writing to the agent. The agent rang straight away and said the offer wasn’t high enough and we asked if that was the answer from the owner and the agent said he wouldn’t bother the owner. Do we have any rights to make sure the owner gets to see our offer?
A: Put yourself in the Agents shoes: if your offer is (as he says) too low, and he calls his client the vendor with every lowball offer, then his client the vendor will rapidly get the poos with the time wasting and find another agent who wont call them 20 times a day when he knows full well that the answer is going to be no.
You have to bear in mind that the agent is not working for you. and what you want may not suit the vendor.....its the agents job to be the gatekeeper to a certain degree.....so low offers usually get filed in the bin.
I presume you have done your homework and know values in the area: if your offer is reasonable then perhaps the vendor is living in dreamland, in which case you are wasting your time until reality sets in. Or maybe your offer is a bit low.....and maybe you need to look at your figures??
But maybe the squeaky wheel gets the oil: keep annoying the agent....maybe he will relent and pass on your offer after a number of calls...
good luck
answered
Q: Question on behalf of my mum, she is 78 and still very active. She is looking at buying a house and land package near Goulburn for $450,000 as an investment. Mum owns her own home valued at $1.2M and an investment property valued at $1.6M and she lives off her super. Apart from the super she has around $200k in savings and would use $150,000 to purchase the property. With a strong net asset position would she be able to get a loan of $300K and what lenders would look at a loan like this?
A: Have a look at the entry and exit fees for acquiring and disposing the property.
lets guess this for now:
stamp duty: 16000
legals 3000
agents fees to sell 15000
legals 3000
so your mum has over $35k of dead money involved in this project. Is she (or her estate) going to recoup this in between now and when the estate is wound up???? thats the million dollar question........
I hope you can steer your mother towards someone who can look at the big picture, because the short term objective of buying a house is not the only consideration she needs to consider

good luck
bc
answered
Q: My husband is set on buying a handy man franchise costing us $40,000 to join. He is very good around house and I think he can do it himself but he thinks he needs support and the brand. For us it is a lot of money and how do we know they will support him with new customers?
A: Hi Angie.
I am probably going out on a limb here, but I have never been a fan of franchises. For me I dont see a huge amount of value in the upfront and annual fees.
I gather that there is value in a recognised brand name, but exactly how much value is debatable.
I woud STRONGLY advise you to go and get advice from someone with experience in dealing with the franchisees: ask the franchisor for names and numbers, and then when you are talking to the accountants of the franchisees, ask them to talk to the actual franchisees. If they have invested $40k and are loving it, you probably wont struggle to find people to talk to.

Then get the figures looked at by someone who can advise you independantly of a franchisor.

then go home and talk it over A LOT.

if you are going to stump up $40k up front and then sign up to an annual committment of (say) $10k pa, that adds up to a six-figure sum very rapidly. So how much EXTRA turnover do you need to generate $100k??? my guess is a LOT!!

talk to a CA or CPA with small business advisory skills. they can help you go through the ins and outs of small business without any agenda or barrow to push.

regards
bc
answered
Q: Hi,
I am 48, single, no kids and been working for the same company for 15 years. I recently set up my own SMSF with $320,000 and would like to get some advice on what people think is the best long term strategy, purchasing a residential property, buying shares or managed funds. Can you buy an apartment with SMSF or does it have to be house with land?
A: WOW, look out Eliza, the advisors will be stampeding for your door as you read this!!!
First thing to bear in mind is that super is only PART of the whole picture. Sure its a legal tax haven, and you need super like air, but you also need to look at super in the context of your whole life master plan.
In terms of what is the best investment mix, the planners will tell you that risk management is the key. And that in turn depends on who you are and what you do and how old you are and a whole range of other factors.
super funds can invest in all sorts of things: apartments, land, commercial property, shares, cash, gold, llamas, baseball cards, time machines, the list goes on!! but the thing is you need to know what you SHOULD invest in, as well as what you CAN invest in.
and this is whee you need the help of a TRUSTED ADVISOR!!! Pick someone who is going to be around for the long haul. someone on the cusp of retirement is great for now, but in 3 years they wont want to talk about your non-concessional contributions cap because they are a grey nomad. get someone who you reckon can help you all the way through to your retirement (and beyond). someone with QUALIFICATIONS in accounting AND super AND investments. Someone with EXERIENCE, and knows what they are talking about.
It might be that you align yourself with one person, or perhaps two specialists: say a planner AND and an accountant. They need to be able to work TOGETHER to get you the best outcomes.
so look for people with qualifications and experience and ask for a reference from a satisfied client.
and expect to pay a reasonable amount of money for the best advice. You dont go cheap and nasty if you are getting a knee operation if you dont have to ......and the same applies to your retirement nest egg!!! make sure you are comfortable and happy with the advice:)
good luck
bc
answered
Q: Hi, ....been offered a job as a contracted courier not employee. I have to get an ABN but not sure about things like super, holidays and the taxes. I’d like to get some advice on all the questions I should be asking the business?
A: This mate could be squeaky clean, OR it could just as easily be a shit deal for you!!!

your "employer" is looking to pay you as a subbie instead of an employee. This means you WONT BE COVERED for:
- tax
- super
- workers comp
- annual leave
- sick leave
- long service leave

this has long been a tactic to reduce the red tape associated with being an employer. I get the gripe from the employer's end, there is a BUCKETLOAD of paperwork and extra expense associated with this and it adds considerably to the cost of employing staff, so lots of employers have gone down the "subcontractor" road to minimise their costs.

So now that I have painted the employer as an evil b#stard, here is what this COULD be:

if you are a subcontractor, and the job is legit and is APPROPRIATELY PRICED then it can work well for everyone:
so if what you are being paid takes into account things like income tax, super, workers comp, annual leave, sick leave, etc etc etc, then being a subbie can be great.

Get yourself in front of a CA or CPA with experience in these arrangements and go through the terms of the contract.....it will not be cheap, but it can save you thousands if you get the right advice and get things set up for yourself properly from day 1. Make sure that the accountant explains the definition of a DEEMED WORKER to you so that you will have a better idea of what sorts of arrangements are likely to be viewed as "employment dressed up as a subbie" and what arrangements are genuine subcontractor arrangements

so you are on the money in that you need to ask about tax, super, insurance, etc etc etc. You also need to make sure the way your business is structured is best suited to YOU and your needs.

good luck

BC
answered
Q: Being able to help people is the cornerstone of a successful business.

We would love for people to be able to share a story of how you were able to help a particular customer in 2018 and why it put such a smile on your face?
A: this is my favourite story about a taxpayer who walked in planning on going to jail and walked out the happiest man in Lake Macquarie.

Ron (whose name has been changed for obvious reasons) had failed to lodge a tax return for 17 years 17 YEARS!!!!!!! he got busy for a few years and kept putting it off and then got nervous about being late and getting fines, so he just stopped altogether. and the longer this went on the more terrified he became about getting in trouble, and the less likely he was to get his affairs in order.

Meanwhile his wife Jill, who had no clue what was going on, kept all his receipts in a shoebox, with his group certificate and bank statements every year and gave it to him on a RDO and told him to go get his shit sorted. Every year.

you know what ROn did???? he went to the pub. every year. and every year he would sit at the pub staring at his shoebox of pain and consider how much he would enjoy sharing a cell with Bubba. and then he would go home, tell Jill he was all sweet and the refund was on its way........he even gave Jill a bit of cash every year to perpetuate the myth, a few weeks later.....

so after 17 years of living in terror, Ron finally worked up the courage to come have a quiet chat with me......and he was seriously the most miserable-looking bloke you could ever see in a reception.....you would have thought I was gonna tie the noose around his neck.....

Ron had no idea that for each and every year he was entitled to a refund. and as it turned out, it was not an insubstantial refund for each year.....because god bless his employer, who failed to update his tax tables regularly, so the PAYG W was overcooked by a significant margin.

so when I did all his returns and called him in to get the news, he came in , sat down and sighed and then said , "right son....what is the damage?"

"Well, Ron, after claiming all your work-related deductions, and taking into account rebates and whatnot, the total amount is $42,000"

"$42,000!!!!! where am I gonna find $42,000???? My missus is gonna KILL me!!!"

"No Ron, I think you misunderstood me mate. Its a $42,000 REFUND mate."

Ron got himself a new set of dentures, took his wife on a long-overdue holiday, and paid a big chunk off his home loan.

Needless to say Ron is now my first tax return each and every year now.......

Good old Ron......puts a smile on my face every time I see him. He is my biggest fan, and I get a kick out of seeing him every year!!!
answered
Q: I run a small business with 3 staff and the business is going ok apart from staff issues. Their work is great but after 5 years I feel I would be making more money for my family if I chose to operate on my own. With super, taxes, paperwork and their personal issues.. it is wearing me down and I’d like to get some advice from other business owners who may have or have been through a similar experience. I do feel obligated to support them but at what cost, thanks in advance?
A: Hi Sally,

I also run a small business and have a small crew working with me. I feel your pain. However I have a wonderful working relationship with my troopers. I am blessed in that I am pretty confident that my business would not be where it is without my staff. They are integral part of the business, and as much as they need me to pay them a wage, we all know we are in it together and everyone benefits from the business growing......so they are all highly motivated to see the business succeed.

Thats not to say its all beer and skittles every Friday, sometimes I have to drop a rocket on someone when they are not pulling their weight. Equally, my employees have the confidence to rip into me when I am letting them down too.

Its a bit like a marraige: we all work at it:)

It may well be true that you could make the same or more money on your own, but the risk factor increases too: if you are not at work, then the business stops. If you have staff you can trust, then the business can still operate with you away.

The last thing you need is a 7 day a week job that ties you to the millstone all day every day.

It is difficult to advise you on what you can do without a better idea of what you DO do. The best advice I reckon I can give you is to find a good qualified accountant (CA or CPA) who can help you with not only tax and compliance, but also help with the business management stuff. Give you ideas on what you can do to motivate and engage your staff.......I think Richard Branson is one of the biggest bone-heads on the planet, but I read where he said that his clients are not the most important thing in his business: his STAFF are!!! If you have staff that are all engaged, and everyone is rowing the boat in the same direction, then I am very confident that your outlook on being the boss will change enormously.

I LOOOOVE being in business for myself. I have owned a business where everyone was looking out for themselves at the expense of everyone else and it was POO!!! I now own a business where I have 150% confidence in my staff, and I know that I will back them to the hilt, and we all get on (mostly) like a house on fire!!! I cant recommend it highly enough.

but getting there will take time patience and guidance from someone who knows what they are talking about. thats where you need to find yourself a TRUSTED ADVISOR, not just a bean-counter. And you will pay for the advice, and you should have confidence in your advisor so that you feel the cost of the advice is good value for money. If that is not the case, find a new advisor:)

good luck
answered
Q: What would be considered an ideal mix between shares and property when developing an investment portfolio?
A: My ideal mix is about $20m in shares and another $20m in property!! oops that is childish and silly, sorry mate. Scott and James have much more sensible suggestions: talk to someone about your circumstances and get help in developing a plan for you....which WILL change over time depending on your age and needs....

cheers
bc
answered
Q: We are going to an auction on Saturday and the agent and conveyancer have differing views on us using a deposit bond to buy the property. Is it ok to use a deposit bond at an auction?
A: https://www.lawyersconveyancing.com.au/faq/deposit-bond-faq/

this is the first thing I found online when I googled "deposit bond" and it is actually quite good:) It explains how a deposit bond is not a deposit and its not a bond.....its an insurance policy that guarantees the vendor gets paid on settlement.
and it costs the property purchaser a premium to fund this guarantee.
so when Deposit Power went belly-up a few months ago, lots of these guarantees evaporated. the property purchasers all had to run around like headless chooks lining up new deposit bonds, and one of them was not able to do so......so she had to pull cash out of a TD which was a pretty expensive excercise for her.....thousands.

so yeah, they are a convenience thing. And I am not a fan :)

cheers
bc
answered
Q: I am looking at opening an SMSF but I am not experienced in this area. What should I be careful of when approaching a Financial Planner (ie. questions I should ask), amid the media coverage of the Royal Commission?
I am not interested in taking on products that the Financial Planner might offer. I want financial investment advice and I also want the Financial Planner to manage the SMSF as I have compliance concerns if I were to do it, myself. Thank you in advance.
A: Hi Julie:
Q1: what are your qualifications?
Q2: how much experience do you have?
Q3: who will ACTUALLY be doing the work? a trainee? an accountant in Malasia? You?
Q4: give me names of three of your clients that are like me (age, income, profile) that I can call to ask how you roll.
Q5: how are your fees structured?
Q6: how many times will I have to come in and annoy you before you get annoyed?
Q7: can I get real-time online access to my super fund? (yes you CAN!!)
Q8: what commissions rebates kickbacks do you get out of this?
Q9: how much do you understand about the actual legislation?
Q10: how many SMSF do you manage?
Q11: who is your SMSF auditor of choice?
Q12: can you guarantee me turnaround time and lodgment performance?
Q13: do I get a quarterly meeting with you to discuss my investment performance and opportunities/risks?

etc

best person you can probably look for is a planner who is ALSO or closely attached to a good CA or CPA firm. It is a constant source of irritation to me that the number of people who purport to know what they are on about is a lot higher than the number of people who actually DO know what they are on about.

good luck and ask lots of questions!!
bc

PS, you can expect to pay a premium for someone with experience, qualifications and the ability to provide you sound advice. They are not cheap, and are worth every cent!!!
answered
Q: We are going to an auction on Saturday and the agent and conveyancer have differing views on us using a deposit bond to buy the property. Is it ok to use a deposit bond at an auction?
A: http://www.afr.com/personal-finance/10000-property-buyers-caught-in-deposit-power-collapse-20180306-h0x460

I have a number of clients caught up in this disaster. Cost to each of them in thousands. ONE client has not been able to renegotiate another bond.

so if a deposit bond is the best way forward then rip in. But dont let anyone tell you they are risk-free. Deposit Power was by no means a tiddler in the deposit bond "pool".

so with all due respect to Albert, the first question maybe should be "how does one of these things work and what are the risks involved?"

good luck
bc
answered
Q: Hi, I purchased an investment property off the plan in 2015 and now have to sell it and it has been sold for $50,000 less than I paid. The property was in my name so if we settle on the sale before 30 June is it possible to offset the loss against my personal income for the year?
A: Hi Will,

James is on the money here. It sux big time but your captial loss is only useful to you if you make a capital gain somewhere.

here are some extra bits of info you will want to bear in mind:
1: the capital loss will carry forward until you make a gain later on...so it is not lost forever in the first year (small comfort I know, but I'm a glass half-full kind a guy)

2: the critical date for you here is CONTRACT date not SETTLEMENT date. The CGT event takes place when you sign the contract, not when the cash is paid.

good luck
bc
answered
Q: Hi,

2 friends and I are starting a property renovation business where we help people with the designs and renovations with their own properties. We hope to one day to buy, renovate and sell properties as well and would like to get some advice on the things we need to consider in setting up the partnership?

Thank you
A: Where to start..........
here is a small list of things that you need to firstly consider before you start trading:
*what structure is best? Partnership is easiest and cheapest but not often the best, especially if you dont like the thought of being personally on the hook for 100% of your business partners decisions
*GST rego?
*Insurance: I hope you have PI and public liability, but what about income protection?
*decision-making: who makes the decisions? how are they decided?
*employees
*super
*record-keeping
*profit distributions
*tax management
*personal expenses
*cash flow management
*budgeting
*risk management
*dispute resolution (it wont be all beer and skittles, trust me!!!!)
*working capital
*equipment/vehicle finance and expenses
*goodwill
*exit strategy
the list goes on and on and on....and on......
The best thing you can do is collectively decide to go and see someone who can advise you on how best to set things up and assist with running the show. AND ACTUALLY GO!!! I have seen too many cases where one of the partners gets lumped with the tiresome job of talking to the bean-counter because the others are too busy faffing about with the business. A partnership has the potential to set you up for life or financially ruin all of you.....so it is CRITICAL that you are ALL on the same page at the outset.
remember that more than 80% of new businesses fail in the first 12 months. and as trite as it sounds the six P's can go a long way to ensuring you are the 20%, and even the 1% of that group that make a good return on the investment and RISK you are taking!!!
find a CA or CPA who wants to deal with a new business and can help you to grow over the long term.....in my experience, the big end of town with the mahogany wood paneling and Italian suits wont be interested......so find someone who has dealt with setting up and advising new ventures and be prepared to pay for the initial advice. It will be worth it!!!
answered
Q: What is the one thing, your major priority, you would do to help ease housing affordability in Australia?
A: the places that have a housing affordability problem are very small in comparison to the whole country. There are no end of places where the cost of housing is extremely low

https://www.domain.com.au/news/the-10-cheapest-towns-in-nsw-to-buy-a-house-20180420-h0z0hb/

and whilst many people wont be super keen on a tree change to Broken Hill, the point is that there are lots of options for people to invest in direct property whilst renting and living perhaps nowhere near their investments.

If there was a single thing that could act as a silver bullet, it could be to actively work on incentives that allow businesses to decentralise without crucifying themselves by distance. because the people will go where the businesses are.......

And that involves long term infrastructure planning: roads, rail, air transport. Electronic data management is crucial to any plan like this: and I mean something OTHER than the hokey NBN we have here!!!

I doubt there is a politician alive with the cajones to plan and FUND this, so we are probably stuck with the shitty situation with a teeny tiny portion of the country worth gazillions and the rest of the place you cant give away......except to foreign investors....and THAT boys and girls is a discussion best left for another day:)
bc
answered
Q: Hello
My business has been operating for 10 months and we have just secured a couple of new contracts which means I need 2 new staff. As the business has just started to grow I am finding it difficult to get the finance needed to take advantage of the new contracts. Is it possible for me to invest some of my super into the business? I have $220,000 in super and only need about $40,000
A: NO!!!
a really big no no that the ATO will make you regret.
The only way to get your hands on super to satisfy a condition of release: ie retire or die.
lending money from the fund to a member is the most common contravention and the ATO takes a very dim view of this, and the penalties can be as high as 47% tax on the fund earnings AND 47% tax on the fund ASSETS!!!
so your short term loan could cost you over $100k
So whilst it is massively frustrating to sit there watching potential business growth evaporate for the want of some seed capital, super is not the answer.
Talk to a broker about what you CAN do that wont give rise to a massive tax bill. There ARE options out there, however the further away from the big FOUR lenders you get, the more expensive the funding becomes.....and there is a point where the cost of capital is simply too high.
good luck
bc
answered
Q: Hi, is there a way I can calculate how much mortgage insurance will be?
A: ask your mortgage broker??
I know it sounds a bit over-simplified, but I work on the theory that I find myself a good broker, with a good reputation and some runs on the board, and make it his problem. A good broker will work for you to get you the best deal overall, not just the lowest mortgage insurance premium.
cheers
BC
blog post
The ATO hates good advisors!!!!
So, One of the many items to come out of the recent Federal Budget is $130million EXTRA for the ATO to audit individuals with higher than "normal" work related deductions.
Or, as I like to ...
answered
Q: If we do some minor renovations on an investment property - about $40,000, how much of it tax deductible?
A: if you ask the ATO, probably none.
but the correct answer is that it depends:)

the thing that you need to bear in mind is that if the expense is a REPAIR it is deductible, and if it is an IMPROVEMENT it is not.

so what is a repair???? A repair is something that returns an asset to the state it was when you acquired it. If you IMPROVE the asset, then this is a CAPITAL IMPROVEMENT, and not deductible.

the ATO has been banging on for a few years about something they have dubbed "initial repairs" on investment properties. This means you cant buy a doer-upperer on the cheap, then spend a mountain of cash to do it up, and call it "repairs" because the property is better than it was when YOU first acquired it.

You need to break it down to what things are being done and itemise the cost of each thing, and look at each item on its own merits.

the good news is that you should be able to claim either depreciation or a capital works deduction for anything that is not a "repair"
cheers
BC
answered
Q: What do people recommend as a starting point to set up a SMSF... I understand there is a fair bit of work involved so would $200,000 be worth it?
A: SO there you have it Phillip. Ask two people: get two completely different answers!!!! The thing to do is get as much information as possible, and educate yourself as much as you can on what you CAN and CANT do. I have said in other posts that super is the BEST thing since sliced bread, and is really and truly a legal tax haven, and EVERYONE should look at their super more than they do. I suspect that Glenn will agree with me on that hahahaha!!!
the more experts you talk to, and the more research you do off your own bat, the better infomred you will be......and the decisions you make about super will also be better suited to your own needs!!!!
good luck
bc!!!!!
answered
Q: What do people think of the 2018 Federal Budget?

What does it mean for Small Business Australia?

Who wins, who misses out?
A: There are a few things in the budget that might be seen as the thin edge of the wedge by some:

1: increased audit activity in relation to work-related expenses for wage earners. Many in the industry see this as a precursor to standard deductions, which itself will be a precursor to no individual returns at all. This would bring Australia into line with a large number of countries, eg UK and NZ. In the short term the effect will be that the cost of your tax return will go UP, or your tax agent will simply not include large work-related claims for such things as car expenses. This can have plenty of flow-on effects: eg who will want to take a car allowance from their employer??? no-one.....so the employer might find himself providing cars to employees who need them for work rather than pay a car allowance.........

2:new industries that will be required to report payments to subcontractors: currently the building industry, but will also include security providers, road freight businesses, and computing services. Its only a matter of time before ALL businesses will be reporting ALL payments to ALL subcontractors.

3: limit to deductions for businesses who pay cash for services to $10,000. Who pays ANYONE $10k CASH????? seriously????

but there are some good measures too:

tax cuts: tick
deduction for assets under $20k extended for another year: tick
simplification of Division 7A (director loans) : tick
cracking down on phoenix arrangements (liquidating a company to avoid debts): tick

There is a LOT more reading and analysis of the budget to be done, but I am sure that LOTS of opinions will be forthcoming...........
answered
Q: What do people recommend as a starting point to set up a SMSF... I understand there is a fair bit of work involved so would $200,000 be worth it?
A: The ATO rule of thumb has always been $200k......any less than that and they may well look at the risk of it being set up as an early access scheme.
This is based on a rough assumption that most industry funds charge somewhere around 1% of the members balance as admin charges, so the logic is that $200k x 1% = $2000 which equates to what many firms traditionally charge in accounting and audit fees.
BUUUT.......there are many funds out there with a LOT less than $200k in them. I know this as a SMSF auditor, I get to review lots of them. If the fund has a genuine investment strategy and conforms to the rules there is no reason why a fund cannot be set up with very small member balances......its just that it doesnt make sense to set up a fund with a member balance of (say) $50k, because the cost of administering THAT fund is still going to be around that $2000 mark, and that makes the fund rather expensive......so the investment return would want to compensate the members for this high cost.
oh, and if you set one up with $50k, I give you a solid gold guarantee: you WILL get audited by the ATO.....they are sick of people setting up super funds to pinch the cash and pay off their mortgages......
have a chat with a good advisor, tell them what you want to do and why...and the advisor should tell you whether you are on the money or not.
cheers
PS SUPER IS THE BEST THING EVERRRRRR!!!!!!! It is seriously and truly a legal tax haven and anyone who isnt doing everything they can to maximise their own super balance needs their heads read!!! (just sayin is all).
good luck
BC
answered
Q: Hi , I'm looking for some advice on the following.
I'm 50 , working full time , married. We have combined super of 330k , 200k savings , A mortgage of 250k. The house is valued at 550k.
My goal is to pay of my home and live comfortably into retirement. Should I put the 200k onto the mortgage , or into my super, or invest it to gain more growth?
On top of that Im looking at having a career break for 12 months.This would be unpaid.Any help would be great.
A: Hi Paul.
As james has very rightly advised, your appetite for risk will determine what is appropriate for you.

Let me say that I have never seen anyone take a massive punt with their life savings and NOT regret the decision. It may be that I have been working with people at a time where things were a bit shakey.....eg GFC......eg droughts.....eg mining downturns........eg Wool Floor Price collapse (remember that one???). Or maybe bad shit happens all the time????

And remember that your ability to recoup losses associated with investment decisions at the age of 50+ is WAAAAYYYY less than your ability to recoup investment losses at the age of 40.

get some advice about what you should do with the $200k. It seems logical to conclude that if you are having a year off unpaid, the mortgage could use a fair chunk of it?


good luck
bc
answered
Q: I have been running my own engineering business for 5 years and nearly 50. I have life insurance but a few people have suggested I should really be looking at business and income protection. I would like to get some advice on the insurance options I should look at?
A: I would expect that these issues all probably apply to you:
1: major breadwinner in family
2: massive mortgage
3: business would collapse overnight without you running it
4: kids/schoold fees/lifestyle costs
5: without your income everything goes down the gurgler.

Soooo, if you say yes to even half of these, you need to look at risk management!!!!! One way to manage risk is to ignore it (ie self-insure) but that only really works if you dont really need the income anyways.......another is to get the right amount of cover so you and your family dont end up living under a bridge eating road-kill. (well, thats maybe a bit of a stretch, but you get what I mean)
Find someone who will have a look at your whole picture and give you advice on what you need and what you DONT need, and help you find a way to fund it without going broke, because it aint cheap!!!

good luck

BC
answered
Q: I run a small business… does anyone know if the $20,000 tax incentive still available before 30 June?
A: yup
https://www.ato.gov.au/Tax-professionals/Newsroom/Income-tax/Applying-the-$20,000-instant-asset-write-off-/

rip in!!!

cheers
bc
answered
Q: Are there any good stockbroking software to assist in buying and selling shares on the stockmarket?
A: I am sure there are better qualified and experienced people out there to help you here Steven, but are you looking to manage your own portfolio, do you wish to be an active "day-trader", is it your SMSF you are looking to manage a portfolio on, or do you want to offer services as a stock broker to all and sundry??
I presume everything hinges on how much you are willing to pay for the service and that depends on what you are looking to acheive with it.
for example, if you just want to be able to sell a few IAG shares that you were issued back when it was floated, you probably wont see much value in an online trading account with market analysis, and the ability to provide you with a full suite of CGT, dividend, market trends and movements tracking etc etc etc.
but good luck. I am sure someone will be able to assist:)
bc
answered
Q: What is the best superfund that has the lowest fees and best returns?
A: James is a genius. Listen to James.

seriously though, there is most likely too much at stake to guess the answer and you need to talk to a professional who knows their stuff. And you WILL have to pay for the advice, no different to paying a solicitor or a doctor or a mechanic or a builder......you should expect to pay for skills and expertise that you do not have. And you should be VERY wary of people who give advice away for free.......because they all have to get paid by someone, and if that someone is NOT you, then you have to ask is the advice the best advice for ME or the best advice for someone else?????

good luck
bc
answered
Q: Hi…we have just completed our first property development of 6 units.

We have decided to keep one unit in the family trust so if we sold 5 at a profit do we just pay CGT on the profit or do we have to include the value of unit we want to keep?
A: That depends on whether the unit is "trading stock" or an "asset"

and that, in turn depends on whether you are in the business of developing property or you are a one-off developer and the units are capital in nature.

And that, in turn depends on what your intention was at the commencement of the development.

If you ask the ATO, they will tell you its trading stock and you get to pay tax on it. And I presume you are not super keen on this, so your best bet is to have a chat with your accountant about what it is you are doing (ie property developing business or investment vehicle) and be guided by him/her.

cheers
BC
answered
Q: My husband and I are down to one income and would like to take some pressure off our home loan by selling an investment property. It was purchased using SMSF. We are hoping to use the equity to pay down the loan but not sure if we can?
A: if you have an SMSF and the SMSF owns the house then the cash from the sale of the house must stay in the SMSF. The only way you can access this cash is to satisfy a condition of release (eg retire, die, etc) to access your super benefits as a lump sum or income stream.

If your SMSF has a shortfall in its cashflow that means youhave no choice but to top up the super fund with personal contributions then it would seem sensible that the fund has to sell the property. But the question needs to be asked: "who would have advised you to load up your SMSF with such a high level of debt in the first place???"

I STRONGLY recommend you go and see a financial planner and an accountant with runs on the board with SMSF and get some help.

good luck with it

regards
Brendan
answered
Q: Hi,
My business partner and I have had a printing business for 9 years…. We both now want different things and I have agreed to buy him out within the next 6 months. Are there finance options to help me buy his shares?
A: Hi Raj,

is the buyout ämicable??? Is there any chance that your partner will allow you to pay him out over time with the profits generated by the business?? This might provide you an option that will get you both what you need......if he has the time to wait for his money.....you can factor in a commercial rate of interest on the arrangement to compensate your partner for the time he has to wait to get paid.
Get yourself a good commercial lawyer: they ARENT cheap. I am sure that the advice will pay for itself many times over.

good luck
answered
Q: We want to buy an investment property in Port Macquarie, Price - $720,000. We own are own home and want advice if we can use the equity to buying the property and cover all the costs. Our home would be around $330,000. Can the property in Port just be in my husband’s name as he works full time - income $85,000, thank you?
A: Hi Debbie,
I have clients all over the country, including Tamworth:) I grew up between Tamworth and Armidale, so have plenty of ties to the area.
shoot us an email to: admin@bpcaccounting.com.au
regards
BC
answered
Q: My sister, brother and I would like to buy a property together and we have been asked if we want to buy the property as joint tenants or tenants in common. What do people recommend?
A: http://www.waterwaysconveyancing.com.au/blog/the-difference-between-joint-tenants-and-tenants-in-common/

Joint Tenants is where a number of people (usually husband and wife) "jointly"own 100% of the property. If someone passes away, the surviving property owners automatically get the deceased persons share of the property. this is most commonly done with a spouse.

Tenants in Common: each persons "share"of the property is not passed on to the surviving owner(s) and forms part of the deceased estate. This is less common for people who are not living together, eg siblings who would want their share of the property to revert to spouse or children rather than a sibling.

Get a solicitor to advise you (each of you) on what you can and cannot do, and what the consequences are for each of you. It will cost more, but you need to get the right advice to make an informed decision
good luck
bc
answered
Q: We want to buy an investment property in Port Macquarie, Price - $720,000. We own are own home and want advice if we can use the equity to buying the property and cover all the costs. Our home would be around $330,000. Can the property in Port just be in my husband’s name as he works full time - income $85,000, thank you?
A: have you done a budget to see what the cash shortfall would be: ie add up the rent and take off all the property expenses, then see how much you would need to contribute to make sure you dont end up living on cat food and wheet bix??

there is absolutely going to be someone out there who will happily lend you 3/4mil dollars. but you need to be comfortable with the cash side of it to ensure you can handle the cash shortfall, on $85k

the bank may wish to have both names on the mortgage, and often the property is purchased as joint tennants with the property allocated 99% to the high income earner and 1% to the lower income earner. this allows you to claim the loss where it generates the greatest tax benefit.

but remember, when you sell the investment property, 99% of the capital gain is allocated to that person too.....which means you dont get to smear the CGT across two tax returns......

good luck
bc
answered
Q: I have just set up my own business, what’s the best way to choose a superannuation fund. What questions do I need to ask?
A: https://www.ato.gov.au/Super/SuperStream/

go to this link. As an employer you have obligations to report AND pay super on time. It doesnt matter what business structure you use, YOU are PERSONALLY liabile for the super payable in respect of the employees of the business.

The ATO set up the Super Stream reporting regime to assist them in identifying who is actually paying super for their employees and who is not.

make sure that you dont fall into the "not" catagory, because there is no amount of "oops I forgot" or "cash was a bit tight, and I'll catch up next quarter" that the ATO will tolerate in respect of employers seeking to avoid their super obligations. And they really should go hard on people who dont pay super.

I wont get on my soap box today about how much impact this has on a persons retirement, but it is HUUUGE!

so, if you have an accountant, get them to lay you out a business plan that takes into account all the stuff that no one considers:
- super
- workers comp
- income protection
- public liability
- GST
- PAYG Instalment system
- managing staff
- managing clients
- handling business growth
- budgeting
- cashflow
- tax
- bookkeeping
- KPI
- borrowing for the business
- borrowing FROM the business
the list goes on....

get yourself hooked up with a GOOD accountant to help you manage your business. Remember that you need to get THREE things out of a business:
1: at least the same wage you would earn as an employee
2: a commercial return on your investment
3: an entreprenuerial "reward" for taking a risk and betting on yourself

if you are not getting those three things, you are making a lifestyle choice, and you may not be super-excited about what the future holds for you.

sorry to sound all doom and gloom, Ingrid. I see too many people who get stars in their eyes and forget to do the groundwork and the results for them are rarely worth the effort.

If, however you do your homework, get a plan and make your business work for you, then potentially you can have both the lifestyle and the financial reward you deserve.

good luck with it:):)

bc
answered
Q: We have been discussing school holiday options for our young family, 2 kids 9 and 7..... does anyone have a hidden gem within 3 hours of Sydney they would be happy to recommend?
A: Laook at anywhere from the south end of Lake Macquarie to Port Stephens. Fishing, bushwalks, moutain biking, beaches, hire a boat and rip around Lake Macquarie, swim with sharks, surfing, fancy-pants restaurants and cafes everywhere, the Port of Newcastle is unbelievable now. go carts, laser tag, crazy high rope climbing in the bush (the kids will looooove it). Reptile park is on the way up here. Wineries not far away aither!! No crazy traffic and pretty much everyone is laid back. You can almost always get a park AT THE BEACH!!!
but dont tell anyone ok??? The genuine locals think that Newcastle is some sort of State Secret so tell them you live in Kahibar when tehy ask where youre from hahahaha
answered
Q: I work 20 hours a week in my office job and have my own florist business where I operate from home

I’d like to know what I claim for my own business and working from the home office, thank you?
A: Hi Kris,

I say pretty much what Scott said!!

I would advise that you be VERY careful with what you claim as a tax deduction for your home, as you might create a capital gains tax headache for yourself without knowing it.

deifinately get advice on what you can and cant do.....as well as what you should and shouldnt do........because just because you can claim something doesnt mean you SHOULD claim it:)

cheers
bc
answered
Q: I am thinking of buying my first investment property. Would you recommend a negative gearing strategy and have the loan interest only or should I go principal and interest and look to create more equity?
A: Hello Margot,

as Sam and Awesome Albert have said: "it depends". So you need to get in front of someone and go through all the various issues and make a decision.

I will say this: if you are interest only for 10 years you still owe the whole amount when you sell. I know it is painfully obvious, but it is a huge factor.

And the other comment I would make is about the relative merits of negative gearing:

In order to get a tax benefit from negative gearing, you need to spend more than you earn (again really obvious I know but please bear with me)

LEts say your net loss on the property is $10,000.
Lets also say your tax rate is 32.5%
the tax benefit is $3250. yippee!!!
but the OTHER $6750 is GOOOONE !!!! never to return. bye bye.

do if your property doesnt increase in value by at least that amount, you are actually going backwards......

if your property doenst lose any money, then you have the $10,000 in your pocket, right?? But no big tax refund either.....but you are actually $6750 BETTER off but not bleeding $10,000 in the first place.

Im not saying dont get into a negatively geared property.
I AM saying do your sums and take into account ALL the factors to see whether something is a "good" investment.

good luck
bc
answered
Q: I am 54 and my super is about $220,000. I own my home and have an investment property in Bathurst worth about $200,000.

There has been very little capital gain as it needs a bit of work.

I want to retire at 60…. should I sell Bathurst and put it all into my super?
A: Hi Phillip,

anyone who can give you a straight answer based on the info you have provided is a charletan or a moron. There are sooooo many things to consider here it would be impossible for someone to get even close to a proper response.

what do you do?
how much do you earn?
are you married?
kids?
mortgages??
life insurance?
What CGT considerations do you need to think about on the Bathurst house?
do you want to downsize?
what lifestyle are you hoping to acheive in retirement?
etc
etc
etc
etc
get yourself in front of a GOOD planner and a GOOD accountant and get the right advice about what you can and cannot do
also take into account RISK!!!! because if you want to live like a king in retirement but dont have the ability to do so now, then you will be tempted to look at high return investments to bulk up super in retirement.......DONT!!!! I have seen too many people in their mid 50's take a risk and lose far more than they can afford to.

the sooner you get a master plan together then better your retirement is going to be. It will cost you money for good advice, but that will pay for itself very quickly.

good luck
BC
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Q: Can I use funds in my SMSF to invest in a business and are there any limits in terms of how much I can invest?
A: Wellll, actually you CAN invest in a business......you just cant get paid from that business......

its complicated and boring as batshit until someone gets spanked by the ATO for doing the wrong thing.....but this is the laymans version:

A super fund has to have the sole purpose of providing for the members retirements. That means that if it invests into a business, and the business pays a member or associate of the member, then the member is seen as deriving a benefit (zzzzzzzzzz) without satisfying a condition of release (I told you it was boring), so the fund is deemed non-complying (yawn!!!) and gets to pay 47% tax on its earnings (WHAAAAA?????) and also 47% on its ASSETS!!! (WTF???!??!??!??!)

I told you its boring until something bad happens........

I have seen funds that genuinely operate a business on an arms length basis and are as clean as a whistle as far as sole purpose test goes......but they get an ATO audit every 2 or 3 years which really sucks the jam out of their donut, if you know what I mean.

The moral of the story is....just because something is technically feasible, doesnt mean you should do it.....keep your SMSF for passive investments, even if that passive investment is the business premises from which you run your business.

cheers
bc
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Q: I set up my own marketing business 12 months ago and have just won 3 new contracts which will mean putting more staff on. We have one cornerstone client on a 2 year retainer at 15k a month and would like to ask if it is possible to get a 50k business loan to help fund the new staff?
A: GDay Beth,
Scott is a GENIUS!!! Listen to Scott!!!!
If you dont have rock solid figures and budgets then you are courting disaster. Get in from of your accountant, and be brutal on your business figures when you do the budget. If you are unable to sustain the growth, then dont take on all 3 new jobs. Taking on work for the pure joy of additional turnover is no fun. If it isnt going to pay its own way, then I would be VERY wary of proceeding.

remember: cash is king!!! If your cash in doesnt at least match your cash out, debt wont help you, it will simply delay and guarantee the inevitable.

good luck
bc
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Q: I have tax losses from a previous business and about to set up a company with a new partner. Can I transfer the tax losses across to the new company?
A: nope.

if your losses are in another entity then they are stuck there. If your losses are personal (eg sole trader) then you can apply those losses to income you earn from your new business.

cheers
bc
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Q: In 2014 I purchased an off the plan apartment ion the Gold Coast in a company name for $ 1.05m. The property was completed in 2016 but I recently had to sell and it was sold for $965k. Does the loss have to stay in the company name or can it be set against personal income?
A: nope. its stuck there.
if the company is the trustee of a trust and held the property in trust for the benefit of the trust beneficiaries....its still stuck there.
bit of a bugger that. I presume that there was a good reason to acquire property in a company name, but it limits your options come time to sell said property.
sorry Tony. no good news for you today I am afraid

bc
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Q: My wife and I are quite risk adverse when it comes to investing. We are about to receive a sizeable inheritance of about $700,000 and want to ask if we should buy an investment property or put the money into super as we’re in our early 50’s and both still working?
A: I am guessing you are about to receive about 1500 messages from financial planners who will be drooling at the prospect of looking after you and your inheritance!!!!
you clearly have many options, and there are a few important factors to consider:
1: $700k is a LARGE sum of money
2: you are in your 50's so cant afford to blow it
3: anything you decide needs to be very carefully researched and all options considered.

If you dont have a good accountant get one!!! Your accountant can help you manage the taxation consequences of what you are proposing

If you dont have a good financial planner get one!!! Your planner can help you to manage your investments and help you figure out a course of action.

Also remember that the inheritance is only one part of the puzzle: you also have a home, perhaps a mortgage, other investments, SUPER, and a whole host of things that need to be looked at: kids, debts, life insurance, plans to retire, asset protection, downsizing, upsizing, retirement, what to do for the rest of your lives, estate planning, etc etc etc

Your accountant and your planner dont have to be in the same office, but they will need to work together to some degree to ensure that everyone is pulling in the same direction. So, ask your accountant who you should use. Also ask your financial planer who to use.

This looks to me to be a once-in-a-lifetime opportunity for you to set yourselves a master-plan that will take into account ALL the things that you will encounter over the next few decades. Dont waste the opportunity to make the most of what you are receiving and ensure that you have the best possible retirement!!!

And dont be afraid to tell either your accountant or your financial planner that you will get a second opinion on things!!! they should welcome it!!

good luck
bc
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Q: Just bought a pub freehold and we will be owner-operators. We are going through the insurance process and been told we need to insure the pub for 60% more than the purchase price. Does that sound right or would we be paying a higher premium unnecessarily?
A: hmmm, I would be getting a second opinion on this. Maybe the reason is that the replacement cost would actually be that much, and being under-insured is no fun. Or maybe someone is just having a lend of you. get some more quotes and see what they look like:)
cheers
BC
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Q: I have stable employment and earn $220,000 a year. Unfortunately, I made a poor decision to get involved in one of those investment schemes where you get tax deductions up front.

The tax department has since closed down this scheme and I now have to pay $180,000 to the ATO. I have 2 properties but there isn’t enough equity to refinance and pay the ATO.
I don’t want to declare myself bankrupt and would like to know what other options are available?
A: One more tip for you Marcus.
Interest paid to the ATO IS deductible
Interest paid to a bank in respect of a tax debt ISNT
worth keeping in mind when deciding to whom you wish to pay interest.
Also if you can come up with a decent story to demonstrate mitigating circumstances (eg dodgy advisor) then the ATO will look at remitting the interest AFTER you have paid the debt.
good luck!!!
bc
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Q: I have stable employment and earn $220,000 a year. Unfortunately, I made a poor decision to get involved in one of those investment schemes where you get tax deductions up front.

The tax department has since closed down this scheme and I now have to pay $180,000 to the ATO. I have 2 properties but there isn’t enough equity to refinance and pay the ATO.
I don’t want to declare myself bankrupt and would like to know what other options are available?
A: First thing to remember is the TALK TO THE ATO. A lot!!!!!!!

the ATO is NOT there to send you broke, or force you into bankruptcy. They are always willing to cut a deal which allows you to address the tax debt over time, rather than take you to court. its bad publicity for them, even when the debt is genuine they are seen as the bad guys.

the other thing to bear in mind is that it is almost certainly true that the reason you have two houses is at least partially due to the $180k that the ATO refunded you in the past, and they are 100% aware of this, so crying poor isnt gonna help.

sooooo, you need a payment plan. The ATO will be very happy to talk to you about this. And I will predict how the conversation is going to go......

ATO: Hi Marcus, you owe us $180k
MARCUS: yes, I do
ATO: can you pay the whole amount today?
MARCUS: no
ATO: can you pay 50%???
MARCUS: no, I dont have a pillowcase stuffed full of $50 notes
ATO: hmmmm, you need to pay this debt as soon as possible
MARCUS: yeah, no shit Sherlock. I have done a budget, and based on my income and expenses, I can afford to pay you XXXXX (this is where you have to figure out what the amount is you can actually afford. lets say $1500/week = $6000per month).
ATO: thats no good Marcus, it will take you almost 3 years to retire the debt at this rate
MARCUS: I know this, but its the most I can afford. I have a family and school fees and a mortgage and I have cut to the bone on this: my family is going to live on cat food and weet-bix for the next three years due to the actions of a shonk artist who gave me advice that I could employ a certain strategy, and I paid him a LOT of money for this advice. Turns out he was a) wrong and b) a fraud. And I am paying a heavy price for this shit advice offered by someone who is registered with the Tax Practitioners BOard....ie the ATO to give me this advice.......what are you doing about this individual? Has he been charged with any criminal offences? Have you removed his practicing certificate? Have you investigated his dealings with other poor suckers like me??????
ATO: thanks Marcus, $6000 per month will be fine. We cannot discuss the other issues. Privacy laws you know.
MARCUS: thanks ever so much

I have taken a bit of poetic licence here MArcus, but this is a common enough story. Bear in mind that you have been bent over and drilled hard by the piece of shit who gave you the crap advice. And as a result you WILL suffer a financial loss. You also have received a benefit from the scam, which is why the ATO is all over you now.

so here is what I would do if I were in your shoes:
1: get a decent accoutnant to go in to bat for you to help you negotiate a payment plan
2: find a solicitor and sue the pants off the advisor who put you in this position
3: make as many complaints as possible to as many bodies as possible about the advisor: eg accounting bodies that he might be a member of; bullshit dealer groups that he works under; Tax Practitioners Board; ASIC; etc etcetc

If this sounds like I have got up in my stirrups a bit here MArcus, it is because people like this who offer shit advice to people like you are the f%cking scum of the earth and are a scourge on my industry. They act with impunity, have no regard for professional and ethical conduct, and are largely immune from penalty, because the people like you who are being stitched up are too busy sorting out the mess to deal with them. GRRRRR!!!!

good luck with it mate. If you need a hand please contact me.

Brendan
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Q: Any feedback would be greatly appreciated. There was a mobile speeding camera that was attached to the car and it was at night time that I went past it at the opposite direction. Now, my question is, because I was going opposite direction, and their was a very island in the middle of the road with big trees that was separating the road, do you think the speeding camera would of caught me if I was speeding (considering there was a long island in the middle of the road with trees in the way)?
A: if you are talking about the RMS mobile cameras that are set up in the back of a twin cab ute, you may be lucky: they are designed to pick up people travelling in the same direction the ute is facing.

If you are talking about a speed camera on a police car facing towards you as you drive towards it, then you might get a nasty surprise, but only if the police car could identify your car....and it was night....so maybe you managed to dodge a bullet......

and yeah, slow down:)

bc
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Q: Is it possible to minimise tax when you receive a TPD payment? I’m 53 and expecting about $300,000 – do I put into super and will that stop me from being able to access fund when I need it?
A: VERY complicated and VERY easy to get it wrong.
Get yourself a planner to help you sort this out. TPD means this is probably the only chance you are going to get to do this, so make sure you do it right.

Dont try to sort this out yourself!!!! You cant go back and have another crack at it if you find its been botched.

good luck
bc
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Q: We're looking for a good financial advisor to help sort our finances so it works best for us as we move into retirement. My husband is 60yrs (semi retired) and I'm 55yrs (working). We own our own home, have 4 investment properties (2 in NSW and 2 in SA) plus another property overseas. We have $650,000 in a savings acc earning minimum return and we need this to be properly invested. I have $160k super in a industry fund plus we have our own SMSF with $35k. Any recommendations?
A: Hi tracey,

give me a call 02 4399 1833. happy to chat:)
(if you have already done this, please have another crack!! I will keep my eyes open for an email from this site.)
cheers
BC
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Q: We are looking at retirement village options for our parents and wanted to know if stamp duty is payable at any time, thank you?
A: It depends.
some provide a "residence right" which is not a legal title of ownership
some are a strata title, hence legal ownership
so the moral of the story is take the paperwork to a solicitor with experience in this area and pay for a legal opinion. It has the potential to save your parents many thousands of dollars.
and be VERY wary of sharks......there is no shortage of slippery characters who are happy to prey on the elderly.

cheers
BC
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Q: A member of our sports club was cooking a BBQ as a volunteer. The BBQ began to catch fire as someone had removed the original fat catcher and replaced it with a smaller object. Fearing there would be injuries to children in close proximity 2 members decided to try and remove the source of the fire (the fat catcher). In doing so one member was seriously burnt. Now the club and insurance company are refusing to compensate saying they are not liable as they made the wrong decision. Is this correct?
A: Hello Linda,
its interesting that the Barrister representing the club hasn't joined the dots regarding the duty of care and where it will end up residing.......ie someone PERSONALLY will become liable for this. Most likely one of the executive committee members.

I hope your friend recovers...those fat burns can be very nasty!!!!

regards
BC
answered
Q: A member of our sports club was cooking a BBQ as a volunteer. The BBQ began to catch fire as someone had removed the original fat catcher and replaced it with a smaller object. Fearing there would be injuries to children in close proximity 2 members decided to try and remove the source of the fire (the fat catcher). In doing so one member was seriously burnt. Now the club and insurance company are refusing to compensate saying they are not liable as they made the wrong decision. Is this correct?
A: Wow.
What sort of message is the club executive sending to its members???? "we would love you to help out, but if something bad happens you are on your own, sport!!"
I know that as a member of a number of volunteer organisations, every member is covered, its simply not worth it for the club NOT to make sure that the members are covered.
If the member is NOT covered, then SOMEONE other than the club has breached a duty of care.....
is it the duty officer on the day, who failed to check the fat tin?
Is it the social secretary, who orders the sausages and gas bottles???
Is it the club president, who failed to run an induction program for all members on the proper procedure in the event of a fat fire???
I would be extremely disappointed if I was a member of a club that decided to hang me out to dry like this. And you know who I would be talking to??? My solicitor. And the conversation would be along the lines of "if the club is not at fault, then SOMEONE is, so lets line that SOMEONE up and get some proper compensation"
perhaps some inquiry from a solicitor as to who the member should be looking to for compensation might change the attitude of an executive if thye get the idea that they are personally on the hook for issues which have been dismissed by the club, and the clubs insurer.
Because some is at fault. It is an unfortunate fact that we live in a highly litigious society, and the days of clubs being exempt from legal obligations to its members are well and truly over.....not to mention the moral obligation of the club in general and the executive in particular to ensure that its members are not placed in danger......
this looks like a disaster could grow from an unfortunate accident.

Linda, if you an executive member of this club, get some legal advice.
If you are the injured party, get some legal advice

moral of the story here is......get some legal advice.

bc
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Q: Hi, I’m a small business owner about to buy a new car. What is the luxury tax threshold and what are the implications from a tax perspective if I’m $5-10k over the threshold?
A: Unless your business sells or imports luxury cars then the only impact for you is the fact that your car's cost has been jacked up to cover this cost.

Where you WILL get affected is in the areas of:

depreciation: you are only allowed to claim depreciation on the value UP TO the luxury car limit. The rest is on you, no tax deduction:(

also no GST on the excess over the luxury car tax limit......poo

and if you are trading through an entity and the car is provided to you as an employee.....you have FBT considerations, but that also applies for non-luxury cars.

I reckon a better value for money purchase is a second hand luxury car. you can buy a forest of walnut and acres of leather for less than $55k..........or buy a horse: there is no such thing as luxury horse tax:)

cheers
BC
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Q: Hi

I look after the paperwork for my husband’s business…. He is a sole trader but the business is getting bigger and people have suggested we should structure the business as a company. I would like to ask about the benefits of changing and what accounting and tax issues do we have to consider, thank you?
A: How much time have you got???? hahahaha

here is a snapshot for you:

company:
advantages:
1: asset protection: if the company has debts the company gets sued, not you. This protects your personal assets from business risk
2: company tax rate: 27.5% tax rate for small business entities, which is lower than most peoples' marginal tax rate
disadvantages:
1: cost: higher accouting fees
2: complexity: issues with director loans can cost you heaps to sort out
3: super: any wages paid to you MUST include super as an employee (this is not ALL bad, everyone can use more super)
4: workers comp: the company MUST have a workers comp policy on wages paid to everyone, including the owner

for the vast majority of people tax savings alone are not enough to justify setting up a company. HOWEVER for the vast majority of people the asset protection you get out of using a company is more than enough to justify using a company.

there are lots of other issues that need to be considered too, so you will definitely need help.

get a good accountant to advise you and help you to set the company up if you decide to go that way

good luck
bc
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Q: I’d like to ask a question about property investment in NSW. I live in Sydney but would like to explore areas where there might be some significant growth opportunities in the next 5-10 years?
A: draw a great big circle around Sydney. make sure it goes all the way up to Yamba and all the way down to Merimbula.
then chuck a dart at the circle....if its not in the blue bit rip in.
chances are that there will be significant growth opportunities everywhere:)

Of you can maybe look at areas that all the smart people are saying are future growth centres......
I presume you are talking about residential property?
Also you haven't really nominated a budget, so we can cross a line through Double Bay?

I vote you write down your objectives and narrow down your search criteria before you start exploring the north coast:)

Also bear in mind you might want to consider other things that can and will influence your decision, like family and kids and work and stuff.....and factor this into your master plan.

And remember, property is great, but its not the only way to a comfortable lifestyle. Keep an open mind about how you acheive your investment goals.....

Maybe a chat with a good planner will go a long way to helping you to identify what you want.

good luck
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Q: My wife and I have our own separate superannuation. If we set up an SMSF can our individual super be rolled into the one SMSF so we can buy 2 or 3 investment properties?
A: yup. sure can, but SMSF is fraught with traps, so make sure you get yourself a good qualified and experienced accountant to help you out.
The penalties for doing the wrong thing can be EXTREMELY HIGH!!! so do your homework first and find out what your obligations are and what things you MUST do when you are the trustee of a SMSF.
And get a few quotes: some firms want an arm and leg just to set the thing up, and some want to sign you up to an ongoing commitment and entice you with a years accounting and audit free.
Prices vary widely: you can pay $500 to set one up. or you can pay $15000 for the same thing.
Also annual fees will depend on what you are doing, what investments are, the number of transactions etc etc etc. Some SMSF annual fees are as low as $400, some pay $25,000 a year. Everything depends on what you need and what is going on.
At the end of the day you are probably assuming responsibility for the biggest asset you will ever manage. Dont treat it like a hobby. Be VERY careful with what you do with it: your whole retirement depends on you not making mistakes.

good luck
bc
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Q: Hi,
I’ve been contracting for the same 3 business for 3 years and averaging around $130,000 a year. Will I need tax returns to obtain a home loan or will letters from the business owner be enough?
A: Hi Jamie, if you have not done your tax returns then you have a problem waiting to happen.

based on $130k profit as a sole trader x 3 years you have a $35 -40k tax bill x 3 coming your way.

The reason this is relevant is that many banks now require you to lodge a declaration that your tax affairs are up to date, and to make things even more complicated, any outstanding debts with the ATO will show up on your credit checks, unless you have them under a payment arrangement.

soooo, the best thing you can do is have a chat with your accountant about getting yourself up to date with the ATO.

good luck
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Q: Really important to make sure your home loan aligns with your investment goals. Recent client of ours wanted to focus on paying down debt but was on interest only with an extremely high rate. Simply switching to P&I has saved him $4,394 p.a. Surely lunch is on him next time?
A: that would just about cover lunch I would expect. but if you expect him to drop $4k on lunch every week he might get a bit hard to find.......
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Q: A friend suggested I invest my cash savings into my own SMSF to help with the purchase of an investment property? Is this wise and how can I get my cash back?
A: Unless your friend is an expert who is currently actively advising people in super and tax then I would treat his advice the same as anything you hear at the pub/bbq/cribroom/water-cooler.....with a massive dose of skepticism.

The idea is technically feasible, but there are a lots of ifs buts and maybes before you can say its a good idea.

go see a professional. pay for some good advice and be wary of shysters.

good luck
bc
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Q: If I purchased an investment property as my first home can I still get the first home buyers grant?
A: Hi Jade, the question of whether or not investing in property is a "good" idea or not is very difficult to get a straight answer on.

Maybe your question should be along the lines of "what can I do to plan for a reasonable quality of life throughout my working life AND also ensure that I am able to maintain a decent quality of life in my retirement"

which takes into account SOOOOOO much more than whether or not to rip into an investment property in the hottest real estate market in the country.

What you need is a "master plan" so that you can align all the things you do with this master plan. For example, it is not tax effective for a retiree with no assessable income to look at a negatively geared investment to get a tax advantage. OR its often impractical for a young person to make large salary sacrifice contributions into super when they really want to purchase or pay off their home.

You also need to consider risk: what happens if you cant work? what happens if your house burns down? What happens to your family if you get skittled by a bus? Lots of things.....

Moral of the story is get yourself in front of a good adviser who can help you to formulate this master plan. it probably wont be cheap, so ask these people FIRST what the costs are, and if they say they wont charge you a cracker, then run a mile!! If you are not paying up front, you WILL be paying behind the line because your advisor will be looking for something that provides him/her with the best commission

good luck
bc
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Q: My husband and I are looking to purchase a property with my parents in a discretionary trust we had set up 12 months ago. Are we able to add my parents to an established trust and is it easy to be able to obtain finance under this structure?
A: GDay Martina,

one of the first things you need to look at is what is the history of the already existing trust: ie does it have any skeletons in the closet that would cause you to lose sleep at night?? The last thing you need is a headache that might place the trust assets (ie the house) at risk!!

To be honest, the rule of thumb is that the cost of a trust deed is so low that it is often easier to go and get a new "cleanskin"to guarantee no issues. Even taking into account the stamping costs you are often miles better off

And yes you definately need to talk to someone with expertise in the area. The opportunities for you to shoot yourself in the foot by utilising or setting up a trust unneccessarily or incorrectly abound.....and the costs associated with fixing problems can be extremely high

and lastly, the ATO has been working very hard for a number of years to take a lot of the joy out of dealing with trusts: there is no end of problems associated with ensuring that the trust makes an "effective distribution" of the income of the trust. In a nutshell, the ATO doesnt like the idea that you can stream income to beneficiaries on a low marginal rate of tax, and hence is always on the lookout to ensure that the trust sticks to the letter of the law:.......the upshot here is that the compliance costs associated with a trust are sometimes quite high......

good luck with your venture:)
bc
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Q: I am employed full time and paid a salary.

On the weekend, I have been paid for photography services that I have provided. I have received $4000 so far.

How do I need to report this to the ATO? At the end of the financial year add this money to my annual income?

If so, is the tax rate 35%? Can I claim all expenses as tax deductible such as, travel, equipment etc.

Thanks
A: mate you need to get yourself an ABN. Suresh is on the money as far as your tax obligations, but remember that you probably have a LOT of deductible items to take into account. The first thing you need to take into account is your photography equipment. Most photographers I know are like junkies with lenses, filters, tripods and bits& pieces......cant say no!! Remember that for Small businesses there are special depreciation rules that allow you to write off assets that cost less than $20k........so your whiz-bang $12,000 Zeiss will come in handy come tax time hehehehe.
get some advice from an accountant about keeping records and KEEP YOUR RECEIPTS!!!!
cheers
Brendan
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Q: If someone worked as part of a real estate agency between 2000-10 selling property on a commission only basis with no OTE's and were required to give the agency manager a personal invoice for the sale, would the manager or agency then be required to pay those individuals super? Given the time lapse could the employee obtain unpaid super? Consider there was no formal employment contact between the parties and agency, yet all worked from one office under single unified company label/brand.
A: Hi again Katie,

this informal subcontractor arrangement was very common 10 years ago, however the ATO has been working its way through these employers and auditing their super guarantee obligations. There are a few tests that allow you to pretty easily determine whether someone is a "deemed worker" or a "subcontractor". They revolve around how the work is invoiced, what the work involves, who is responsible to fix it up, who tells who what to do and how and when, etc etc.

I call it the duck test: if it walks like a duck and quacks like a duck; well the chances are its a duck.
if you look like an employee and act like and employee; well then you are probably an employee.

If you are the person getting paid here, then I would have a chat with your accountant and then talk to the ATO: they love to hear from employees who got stitched up by employers seeking to avoid their obligations

If you are the real estate agent, then you DEFINITELY need to see someone ASAP!! It is likely that you have a big problem that will cost you many thousands of dollars in unpaid SG obligations. It makes no difference whether the issue was intentional or not, if the ATO gets wind of an employer not paying super, they go for the jugular!! and just to rub salt into the wound, if an employer gets picked up for this, none of the super, or the fines are tax deductible!!!

oh, and the next thing the employer can look forward to is a Workers Comp insurance audit: the same duck test applies here, and in my experience the ATO is all too happy to share info with the likes of GIO.

you may get the impression that I tend to side with the employee in this matter: I do. I believe it is reprehensible that an employer can attempt to avoid obligations in respect of the very people that the employer is reliant upon for their income. If you have such little regard for your employees you probably deserve everything that the ATO is going to deliver.

moral of the story is GET GOOD ADVICE!!

good luck
BC
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Q: My partner and I have been discussing buying a new home. We currently live in my home which is worth about $750,000 and the home loan is $310,000. If I didn’t sell my place can we use the equity as a deposit in a new home and does that mean my loan would become an investment loan if we rented it out? The home we are looking is around $1.1M, would there be enough equity in my place to pay a deposit?
A: Hi Mason,

I have clients from Tasmania to Saudi Arabia, so yup. the electronic age makes some aspects of what I do super duper easy:)
regards
BC
answered
Q: If someone worked as part of a real estate agency between 2000-10 selling property on a commission only basis with no OTE's and were required to give the agency manager a personal invoice for the sale, would the manager or agency then be required to pay those individuals super? Given the time lapse could the employee obtain unpaid super? Consider there was no formal employment contact between the parties and agency, yet all worked from one office under single unified company label/brand.
A: Almost certainly.
The ato is all over people who dodge their obligations as an employer.
Talk to an expert in tbis area to find out what needs to happen
Penalties can be severe for the employer!!!!
answered
Q: My partner and I have been discussing buying a new home. We currently live in my home which is worth about $750,000 and the home loan is $310,000. If I didn’t sell my place can we use the equity as a deposit in a new home and does that mean my loan would become an investment loan if we rented it out? The home we are looking is around $1.1M, would there be enough equity in my place to pay a deposit?
A: the test for deductibility is the PURPOSE of the borrowings.
the purpose of your loan is clearly to acquire the house you occupy, hence once the property becomes an income-producing asset, the interest on the mortgage will be deductible

HOWEVER!!!! the purpose of the borrowing can be "diluted" by subsequent borrowings for a different purpose.....

eg if you redrew on your homeloan last year to buy a dirty great big yacht, then that portion of the mortgage is not for a creditable purpose, and hence a portion of the mortgage will then be personal and not deductible.

talk to your accountant about creditable purpose and investment property. Also talk to your accountant about capital gains tax. because once you move out of your now home, your property becomes subject to capital gains tax.....and there are lots of things you need to know!!! The potential tax cost (or tax saving if you do things right) is HUUUUGE!!!!

cheers
bc
answered
Q: I have an apartment where am living since 4 years , planning to convert that as an investment property and recently I purchased another property whose settlement is likely to be end of this year. If I move to a rental property close to my work place , will I be eligible to get tax benefits on two investment properties
Please advice ??
A: hmmm, so you will OWN two properties, both of which you will be renting out?
And in addition to this you will live in a THIRD rental property close to where you work??

your rental income will be assessable, and your rental expenses will be deductible.

so the NET income will give rise to a tax liability
OR
the NET loss will be applied to your other assessable income (eg wages) as a tax deduction.

so there are no direct "tax benefits" as such. Its just the net effect of the rental loss can provide you with a greater refund in your tax return.

Best thing you can do is talk to a qualified accountant who can help you to set things up so as to provide you the best tax benefit in both the short and long term.

You also have some capital gains tax issues that have not even been touched on here......given this apartment has been yours for a long time and once it becomes a rental property you may incur a capital gains tax liability if you sell it later on.....all the more reason to talk to an expert.

regards
Brendan
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Q: Hello,

My father recently passed and left in his will that his assets go into a Testamentary Trust.

I'd like any advice on how do I establish such a trust and transfer assets (car, home) into it? All I have so far is a tax file number for it.
A: If you have a tax file number I would say that the trust has been established. I believe that your fathers will is the instrument by which the trust was established.......and someone somewhere has applied for and been issued a TFN.

Best to talk to the solicitor who looked after your father's affairs and get guidance from them. A testamentary trust is a relatively simple thing in theory, but in practice it needs a fair bit of attention, so get legal advice before you go organising transfers of assets.

cheers
Brendan
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Q: Hi. I have already bought an investment property from the available funds of offset bank account for a mortgage home where I live now.
To keep new house on investment officially I contacted NAB bank. NAB bank is ready to swap over the property title-papers but advices that I will not be able to take advantage of tax benefits by doing so because govt tax officers check what was the purpose of the home loan originally? Please advice me now how do I take advantage of tax benefits?
A: GDay Sanjiv,

your biggest mistake here is getting tax advice from the bank. Have a chat with someone who understands the tax implications of what you are up to.
Colin is partially on the right track with his comments on "mixed purpose" loans.

the thing to get straight at the outset is the deductibility of interest on a loan is determined by the PURPOSE of the drawings.

If you have a mortgage and you are ahead on your payments (ie made payments in an offset account) then subsequently draw down on this loan for a CREDITABLE PURPOSE, such as purchasing an investment property, then the proportion of interest on the loan that pertains to the CREDITABLE PURPOSE is going to be deductible.

So its a relatively simple calculation: figure out the % of the mortgage that belongs to the investment property and apply this to the total interest and claim this in your tax return.

where it gets complicated is when you make a subsequent drawdown for a different pupose, because this changes the % of the mortgage that belongs to the investment property. Another issue is that you cannot reduce the "non-deductible" portion in preference to the "deductible portion". that is why it is generally a better idea to have TWO facilities: one for the personal portion and another for the investment portion.

Get yourself a bean counter who understands this, and a mortgage broker who also understands this and talk to them about what you can do to maximise your tax benefits. You have already gone out and done all this, but at some point you may wish to refinance, and maybe that is good time to reset things up to maximise your tax benefits for the longer term.

cheers
BC
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Q: Hello,

I am a software developer contractor for $700/day and my partner is not working at the moment. Can I hire her for $200 / day , is that legit ? What are the options (have her own ABN , need to pay super ) ?

Thanks
A: Your income is Personal SErvices Income (PSI).
your tax deductions in respect of PSI are limited to the same sorts of deductions that you would have if you earned a salary.

The ATO is almost certainly going to see straight through a "wage"paid to a spouse. Morevover, it creates a superannuation liability and also a workers comp issue that you need to address.

Also bear in mind that the ATO has a long and illustrious list of IT professionals who have sought to dodge a bit of tax by means fair and foul......so if you put software developer on your tax return you can be confident that your return is getting more than just a little glance at the ATO....so if you are stretching the freindship then the ATO will find out eventually and spank you soundly for it. They know all the tricks so be careful about what you try to get across the line.

So, whilst on the face of things you can easily squirrell some income across to your spouse, its not that simple. Go find yourself a bean counter who understands the PSI regime and how you can best manage tax without dropping yourself in the poo with the ATO...

regards
BC
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Q: Hi, we were looking at renting a boarding room for our son with the licensing agreement being in my husband and my son's name. My husband has signed it but my son hasn't as we aren't sure if we want the room now. We have paid a holding fee, bond, next weeks rent and a licence preparation fee. The real estate agent says that we will have to pay a break licence fee and continue to pay rent until someone else takes the room even though we haven't moved in. Is this correct? Thanks Rhonda
A: https://www.tenants.org.au/factsheet-01-residential-tenancies-act

Hi Rhonda,
I suspect the landlord is on the money, but maybe you have options available to you. Remember the real estate agent is acting for the landlord so wont be looking to help you out here.....have a chat with the tennants advisory service (see attached) maybe they can give you some guidance
good luck
bc
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Q: I use a bookkeeper for my business BAS, and an accountant for my tax. The bookkeeper enters all the business data on an Excel spreadsheet which I give to the accountant with the rest of my information. I've discovered that the bookkeeper has made a major error every year (for 6 years) by entering my receipts incorrectly, so I have paid a lot more tax than I should have. The accountant has had the original documents as well as the spreadsheets. Should he have checked the spreadsheet data??Thanks!
A: Hi Meroula,

I dont want to go on a bookkeeper bashing expedition, but it sounds to me like your bookkeeper has not moved with the times. You almost certainly need to find a better solution.
In terms of what to use, I recommend MYOB over Xero, mainly due to the support that MYOB offers is better......that being said either product works great, and there is LOTS of how-to videos to explain how to do stuff.

I would strongly recommend that you go with whatever product your bean-counter tells you to use, because they can:
a: help you set it up
b: help you stay in control
c: get reports and data out a lot easier (ie CHEAPER) to use at their end

If your accountant is not super keen on the cloud based options, punt him too. Seriously. The time and efficiency gains you and your accountant get out of a cloud based system is mind-blowing.

You will find that you will be doing 95% of what you used to pay your bookkeeper and accountant to do, and then the services you ACTUALLY need become tax management and wealth creation advice, not bookkeeping and talking about last years tax return after the event when its too late to do anything about it!!!
answered
Q: I use a bookkeeper for my business BAS, and an accountant for my tax. The bookkeeper enters all the business data on an Excel spreadsheet which I give to the accountant with the rest of my information. I've discovered that the bookkeeper has made a major error every year (for 6 years) by entering my receipts incorrectly, so I have paid a lot more tax than I should have. The accountant has had the original documents as well as the spreadsheets. Should he have checked the spreadsheet data??Thanks!
A: that all depends if you discussed the possibility of the bookkeeper making a mess of it. I know I am talking from your bean-counters side of the fence, but if you want your accountant to check every transaction in an excel spreadsheet the accounting costs would be astronomical.
It also depends on whether you gave your accountant ALL the supporting documents ans receipts and asked him/her to review the spreadsheet.....again very expensive at bean counter hourly rates.

In the vast majority of cases the accountant has to apply a liberal dose of practicality to his role and has to assume that between the bookkeeper and the business owner someone is checking stuff BEFORE it gets to the accountant.
There is a LOT of stuff that your accountant should check, for example whether your accounting data matches up to the BAS' lodged. In this case it would have because the accounting data (excel) clearly did match up to the BAS......hence no alarm bells and no phone calls from your bean-counter.

I have to say that the biggest problem you have is your spreadsheet. it is nothing more than a BIIIG electronic list of numbers, and as a tool to manage and advise, I put Excel in the same catagory as a corn flakes packet of receipts.... pretty much useless but marginally better than nothing at all.
Do yourself a massive favour and get onto MYOB Essentials, or Xero. Talk to you accountant about what you can rectify with amended tax returns and BAS'....and be prepared to be disappointed here, because the period of time that you CAN amend is 4 years, so you wont be able to fix it all.

And find a better bookkeeper. better still: use MYOB Essentials and do it yourself....then you will know it is right:)

cheers

BC
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Q: I am about to enrol in a TAFE course. On my enrolment form I have been charged one amount but on the list of charges it adds up to another amount. I am being charged a discretionary fee but this fee doesn't appear on the fee breakdown at the end of the form. I am still being charged for this. Is this legal.?
A: Hi anna-marie

best thing you can do is ask them for clarification and a clear breakdown of your fees:)

cheers
BC
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Q: Hi,
My Wife and I have a 75k mortgage. we have an equity loan facility that is split from this mortgage of 400k.
we would like to invest in some shares using funds from equity loan.
We would like to set it up so my wife is buying the shares as she has recently delivered our baby and won’t be returning to work for around 5 years.
Can she negative gear the interest against dividend income from the equity loan keeping in mind it’s in both our names?
A: Hi mate, I have an office on the Central coast too!!! google us up: BPC Accounting Chartered Accountants. 02 4399 1833 or hit the "contact expert" thing below and I will get back to you:)

happy to chat

regards

Brendan
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Q: I’m 28 and would really like to understand more about superannuation and building for the future. Am I better off just going along with my employers super or finding a financial planner to help. What questions should I be asking a planner, thanks?
A: QUESTION 1: what qualifications do you have?
QUESTION 2: what experience do you have?
QUESTION 3: what commissions/remuneration to you receive?
QUESTION 4: what will you charge me????

At the age of 28, I am guessing you may not have enough in super for a lot of advisors to get excited about you....many are paid a trailing commission based on the size of your member balance.

That being said, it is NEVER too early to start planning for your own retirement!!!! the more you can poke into super at a younger age, the more it can grow in a tax-advantaged environment, and ultimately the more you will have in your retirement!!

There is a mountain of territory for you to cover: super, insurance, how to pay off your own home, investing in super v investing outside super, managing tax, estate planning, the list goes on.

Get yourself in front of someone who knows what they are on about that will charge you a fee for service (and hence will not be influenced by big commissions) and understands not only investing, super, but income tax and can help you put together a master plan to work on over the next 20-30 years.

congratulations on asking the question so young!!!! That tells me you are already thinking about retirement, which means you WILL probably have enough to retire on. Many leave the question too late, and as a result they dont.

regards

Brendan
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Q: Hi, my name is Roger Francis and I am currently a self employed Handy man with a good income per week of around $2400 including being maintenance person for many organisations and with regular employment.
I ran a cafe which went bust and still hold the lease which is amassing rent at $7000 per month for which I am 3 months in arrears.
I need advice on how to go about applying for a home loan to cover this and future rent and to buy a house at the same time?
A: Hi Roger, here are some comments that I have thought of:
1: Get yourself set up on a proper accounting package, it will reduce your bookkeeping time by an enormous amount. I recommend MYOB Essentials to most clients, but Xero and Quickbooks all do the same thing. they are dirt cheap compared to the cost of an accountant to do your financials and tax.
2: if your landlord has been notified that you wish to terminate the lease I think you will find that they are obligated to make a proper effort to replace you. ie if you know that they will get someone else to take over the lease then you are not necessarily locked in for the entire term of the lease.

It seems reasonable to conclude that no bank will touch you with a bargepole whilst you have a $7000/month obligation to service. Also self-employed people with a short trading history is going to make finance even harder.

It is clear you need to get advice on the cafe lease. Talk to a commerial lawyer about your options.

good luck
Brendan
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Q: Hi,
My Wife and I have a 75k mortgage. we have an equity loan facility that is split from this mortgage of 400k.
we would like to invest in some shares using funds from equity loan.
We would like to set it up so my wife is buying the shares as she has recently delivered our baby and won’t be returning to work for around 5 years.
Can she negative gear the interest against dividend income from the equity loan keeping in mind it’s in both our names?
A: Hello Peter,

have you considered that your wife will have no tax benefit from the negative gearing whilst she is not working?

The flip side to that is that should she make any gains or profit on sale of shares you wont have to share the tax burden at your (presumably) higher marginal tax rate.

Are you planning on a passive investment portfolio, or an active share trading business?? This will have tax consequences on what you do....

What happens in 5 years?? the shares will STILL be in her name so the income will STILL stream to her.....

Is there an opportunity to hold these investments in some sort of structure that allows for the income and gains to be streamed to whoever will have the lowest tax rate??? (yes you can)

I would say you need to get a whole heap of advice on the pros and cons of doing what you are doing how you plan to do it, THEN rip into the share market like a crazy thing:)

get yourself in front of a PROPERLY QUALIFIED AND EXPERIENCED accountant who can advise you on tax and help you to plan this venture out over 20-30 years to ensure you dont shoot yourself in the foot by accident in a decade or so. DONT go to someone who purports to be an expert in something without some REAL qualifications and experience.

regards
Brendan
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Q: I am running the business my father founded and wanted to ask about protecting the family should his health deteriorates. Dad is 74 and reluctant to formally hand over control but we want to put things in place to ensure everyone is happy. What is the best way we can achieve this?
A: Get a good accountant who can help you with succession planning, and do it sooner than later!!!
everyone involved in this business will be better off with a plan in place that ensure you all know what is going to happen and what time-bombs you have ticking away that will need to be dealt with.
The advice will depend on what you and your father have in place now, what you WANT to take place and what you need to do to ensure the maximum benefit for all involved.
good luck
BC
answered
Q: Hi.

My partner and I bought our first property 5 months ago. Now I need to relocate interstate for a 2 year assignment. I am looking at renting it or selling it. What is the best way to go about it?

Thanks
Jason
A: Hi Jason,

renting is not going to be a problem from a TAX perspective....you just need to report the income and claim the deductions. Also you have a 6 year window after you move out of your property when you can move back in again without creating a capital gains tax issue later on.
BUT
your bank might have an issue with a loan issued on the basis of an owner-occupier which all of a sudden turns into an investment property. Probs needs looking at.

cheers
bc
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Q: We are thinking of purchasing a property with cabins to rent out nightly. We will live in the main property. Will the mortgage interest be tax deductible as we are running a rental business?
A: Hi Wesley,

In answer to your question of the actual deductibility of the loan, the answer is that if the loan has DUAL purposes, then the loan will be PARTIALLY deductible.
The portion of the property that is your primary residence will not be used to generate income and hence this proportion of a loan will not be for an income-producing purpose and hence any interest on this portion of the loan will not be deductible
The portion of the loan which is for the income-producing part of the asset will clearly be for a creditable purpose, and hence the interest on this portion of the loan will be deductible.
Find a mortgage broker who can explain Hart's Case to you so that they clearly know what the income tax implications are, then talk to them about getting two loans: one on the primary residence portion and one on the income producing portion. That way you will very easily be able to identify and claim the correct amounts for tax purposes.

good luck
bc
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Q: : I am in a Strata of 6 villas. We have a council of owner of 5 members. The law requests a minimum of 3 members. To fill the 3 positions? Do we have to elect a chairman, a secretary and a treasurer? The existing chairman believes she is the only one elected and can delicate tasks of secretary and treasurer to different members at any time as she field fit. Is that according to law?
A: http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owners/Strata_schemes/The_owners_corporation/Strata_committee.page?

Dept of Fair Trading NSW has this info on its website. In NSW the committee decides who holds the vairous office positions, so I presume that the WA Dept of Fair trading has a similar set of rules

I would contact the dept of fair trading if I were you.

good luck

Brendan
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Q: We are a Strata of 6 villas. We have a council of owner and a Strata manager. We are applying for a tax file number. Do we have to have a ABN number?
We collect Strata fees and have a sinking fund of $5000. We will be below taxable income
A: There is a concept in tax law called "mutuality" which means that you cannot earn assessable income from yourself. Any funds earnt or paid to the Strata from members of the strata is subject to this concept. So in short the Strata wont have any assessable income unless its from an unrelated party...eg hire of assets or interest on bank account or something like that.
do a search on a tax ruling called TR 2015/3. this will help you a bit but because its written in ATO-ese its not necessarily the easiest document to read.
good luck
BC
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Q: Hi, We are struggling financially with credit cards & other debts. We can manage comfortably with Mortgage repayments it's all the other debts which are crippling us. I have seen when searching online that you can keep your home & car if you declare bankruptcy? Is this possible?
A: Hi guys. reading between the lines I can only presume you are in between a rock and a hard place right now JJJ. I hope it works out for you and your family, please make sure you get some advice from people who know what they are doing. If I had to limit myself to one piece of advice it would be stay away from those predators who advertise solutions and stitch you up to Part IX or Part X arrangements which end up costing you more than bankruptcy would.

good luck
BC
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Q: Hi, We are struggling financially with credit cards & other debts. We can manage comfortably with Mortgage repayments it's all the other debts which are crippling us. I have seen when searching online that you can keep your home & car if you declare bankruptcy? Is this possible?
A: NO!

in bankruptcy you lose everything except for personal effects, your tools of trade and a car up to the value of about $7600. Everything else gets handed to the trustee to handle. You also have to make income contributions of 50% of your income (after tax) of approximately $55,000.
It last for 3 years. It is also on your record for a long time, and makes potential lenders very nervous.
I have seen people use it as a get out of jail option as they perceive it as having no consequences, but it does have some lasting consequences.
And whatever you do DONT sign up to one of of those late night debt consolidation businesses!!!! What they sign you up to (Part IX or Part X debt agreements) are even worse than bankruptcy. Those firms are the lowest form of legalised predator who prey on the weak and desperate people who can least afford to get expert advice.
most good insolvency firms offer some level of support and consultation to individuals who are in debt and cant seem to break out. Go to AT LEAST TWO!!! get some advice about your options and SIGN NOTHING UNTIL YOU KNOW WHAT YOU ARE SIGNING.
Insolvency and bankruptcy practitioners are for the most part there to help. They get no joy from sending people down the drain, and wherever possible they will try to help you get out the situation you are in.

moral of the story is get advice, make it as good as you can make it and act on it. But dont sign up to something you dont understand.

good luck

Brendan
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Q: Im 62 and have $3k left on my mortgage on which i pay the minimum and have $20k in advanced payments.
Would it be beneficial to access some of the $20K to put into my super fund?
A: Hi Barbara,

a tax saving is not the only reason to make a super contribution. I would find myself a good financial planner who is ALSO an accountant or at least part of an accounting firm that can give you advice on the whole picture....tax, super, retirement planning, estate planning, ect etc etc. You really cannot look at making some extra super contributions without looking into the effect this might have on other things.....it is likely to cost you a bit, but you will then have a much better game plan for your retirement to work with.
good luck with it
Brendan
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Q: Identify and describe the Accounting Standard that governs the presentation of financial statements?
A: Is this your Financial Accounting 101 assignment hahaha?????

this should help: http://www.aasb.gov.au/Pronouncements/Current-standards.aspx

have fun with it. You will find that the answer is probably a lot more complicated than you anticipated.

regards

Brendan
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Q: If a company goes bankrupt does it impact the director/owner credit history as well or just the company as it is an entity itself ?
A: Hi Louise,

firstly a company doesnt declare bankruptcy as such. The directors or creditorscan apply for a Liquidator to be appointed.

The Liquidator does an investigation into the affairs of the company and reports to the creditors (and owners) of the company whether or not he thinks the company is a dead duck or not. Then if he decides its not viable the creditors get paid out a % of their debts, and the company gets deregistered eventually

Whilst this does not impact DIRECTLY on the directors credit history, it is on record. And banks dont like it. SO if you are a director of a company in liquidation, be prepared to be knocked back on finance applications unless you have a REALLY REALLY good story to tell the bank as to why this wont affect your capacity to service debts in the future.

cheers
Brendan
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Q: Hi, my kids mother left them a house in her will and made her brother the executor. The will was to have house sold and divided between the 2 kids at age 21. Her bother transferred house into his name (8 years ago) and my son lived in the house since. They have now sold the house but we need to find if cgt is payable?
A: Hello Paul

Get a solicitor who understands CGT and get some advice. there are potentially all sorts of headaches arising from this: I think that CGT is only one problem....

regards
Brendan
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Q: I have a mobile home that i am looking to sell, it is situated in a nice caravan park with lake side. I am confused by taxes . Some say I wont have to pay tax and others say I will have to pay as it is likely I will sell for over $300000.
Does anyone have knowledge in this area?
A: You might have a capital gains tax problem, or maybe you dont. It depends on what it is that you are selling, what you have done with in the past, when you acquired it, how much you paid for it, and million other factors

Best thing you can do is find a decent CA and talk to them about it BEFORE you sell, because if you have a CGT problem you need to figure out how to minimise this BEFORE you sell.

good luck
Brendan
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Q: Hello. I am working on a 2018/19 draft budget for my Marketing team at a new company. I’ve been give a report, which shows these columns
1) 2016/17 Total Actuals...
2) YTD Actuals...
3) Current Budget...
4) 2018/19 Draft Budget... and
5) 2018/19 Variation.

I’m a bit confused as to what each colum means especially 1), 2) and 3).

Can someone help explain. Thx?
A: I presume you are talking about a Draft Budget Profit & Loss, or maybe a Draft Budget Cash Flow, or something like this.. but its got to be a draft budget "something"

only the treasurer deals in a Draft Budget.....if you know what I mean:)

so, assuming you have a P&L budget then the columns will mean:
1) the actual amounts received and spent in the 2016-17 financial year
2) the actual amounts received and spent SO FAR during 2017-18 financial year
3) the BUDGETED amounts of income and expenditure for the whole 2017-18 financial year
4) the BUDGETED amounts of income and expenditure for the 2018-19 financial year
5) variation is the difference between two of the columns: most likely the difference between 2 and 3. but you can measure the variance between any two columns depending on what you want to measure......
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Q: Hi,
I am looking to start up a Babysitting business where I hire employees also. I have already registered my business name and have an ABN, is there any thing else I need to do or register??
Thank you
A: Lets not forget Super!! you need to register for Super Stream, and make sure you pay the right amounts of super for your employees on time.
regards
Brendan
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Q: I am 65 and retired. I’m looking at renting out my property and buying into a retirement accommodation. Would I have to pay any tax from the rental income.
Cheers. RM?
A: Hi Ros,

yes you will: however you also will able to claim your expenses in relation to deriving this income: eg rates, insurance, repairs, depreciation etc etc.

You will also potentially be up for some capital gains tax when (or if) you sell your home. Its a complex area so you need to make sure you keep very good records on when the house became a rental property.

Track yourself down a good accountant, CA or CPA and get them to go through it all with you. Its a minefeild especially if you have Age Pension or DVA payments to take into account

good luck

BC
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Q: Hi, I am employed by a trading platform in USA, money will be getting transferred to my account to purchase iTunes cards and traded for bitcoin. I will be getting a monthly wage. My question is, will I only need to pay tax on my wage of $3500 per month ? OR will I get slammed paying tax on the massive amount of money this company are putting into my account to purchase the iTunes cards for them?
A: you will get slammed.
your assessable income will include payment "in kind" as well as the traditional wages.
regards

Brendan
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Q: We invested a small sum of our Super ($30,000) in units in a property investment company, which did well until a change in management. Last year apparently our units were sold on to a new company, which forwarded a statement showing our holdings now to be zero. Our emails show no notification of any transfer plan, and no option to opt-out and withdraw remaining funds. Also there is no final payment made to our bank account, as claimed. Can we do anything about this, and if so who do we approach?
A: Hi Patricia,

I think perhaps that James is right and your investment is probably gone. If a liquidator has been appointed then you should have received lots of correspondence from the liquidator advising you what is going on. If this hasnt taken place then you really do need to start asking questions, starting with whoever has written to you to say your investment isnt worth anything.
good luck
bc
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Q: We are considering whether to buy an established house, or a new home and land package. What are the risks involved when buying a home and land package? Any tips for doing this?
A: watch out of an advisor who is all bells and whistles that wants to fly you up to Queensland to sign up immediately: quite often this person can be getting a kickback from the land sale, the mortgage broker, the builder and everyone in between. There are a LOT of shonky operators out there, so some healthy skepticism wont do you any harm. Ask a LOT of questions, there is no such thing as a dumb question when you are fixing to spend over $500k
good luck
Brendan
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Q: I am approaching retirement (60 yrs old ) and would like to relocate on retirement. Is it an option to sell my home now (240,000 mortgage, house worth 350,000 ) invest the profit in my super and draw on retirement to purchase a home in the relocation choice ?
A: Yes you can do this, but it probably doesnt achieve much. You could just as easily park the $100k in a bank account if you are looking short term to access the funds.

and yes you need to get advice that covers everything you need to look at: super, tax etc etc

good luck

BC
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Q: I am aware that super funds can be accessed early, however if the lump sum is moved to your self-managed super fun, does it get taxed? or if you are to withdraw your super due to 'x,y or z" reason would it be taxed?
Thank you.
A: the answer is "it depends"
for most people who access super before 55 they get taxed on it
for SOME people over 55 they can sometimes access lump sums without paying tax
for MOST people over 60 they can access super tax free after they retire.

Find a GOOD adviser and a GOOD accountant: they will hopefulyy work together with you to provide the best advice for you.

it is complex, and for that reason you need to get expert advice

good luck
bc
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Q: I am about to sell a property which will be able to pay off its loan, my current residence loan and one investment property, is it best to keep a mortgage on an investment property to be able to claim the tax or would it be better to have the investment fully paid off and keep the rent as PAYG income?
A: Hi Kaz,

I ALWAYS advise clients that actively looking to create a tax deduction is a really bad idea. Let me give you an example:

If you pay tax at (say) 30%, then for every $1000 of tax deductible expense you have you get $300 back: wonderful!!!!!
$300 back in your pocket: yippee!!!!!
but the other $700 is gone, never to return!!!

lets compare that with not having a $1000 tax deduction: no claim means no tax benefit, and you pay an EXTRA $300 to the ATO: BOOOOOO!!!!!
but you get to keep the other $700!!!!!

you can see that the person with the tax deduction has $300 after spending his $1000, but the person with no tax deduction has $700 left.

who is better off do you reckon??????


To put this theory into your situation, ask yourself do I want to have a tax deduction or not??? If all other issues are ignored then you will probably say no bugger the tax deduction, I would rather keep my $700.

We dont live in utopia, and no decision can be taken in isolation of all others, because there are consequences of paying the loan down: firstly that money to do this could be used somewhere else.....which is where a good advisor comes in really handy: find yourself someone who can advise on investing and the opportunity costs (and risks) of various scenarios.........but make sure that they understand the TAX IMPLICATIONS too......and dont go looking for a tax deduction for the pure joy of having a tax deduction.

Good luck

BC
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Q: Im interested in bitcoin starting it up soon but i want to know the tax's involved. As far as i e heard there is no tax on the coin itself in australia but something about capital gains? please explain
A: tulips.

bitcoin is the new tulip bulb crash of 1637. Look it up.

Bitcoin is supposed to be an "alternative" currency, right???? The ONLY value any currency has is the confidence held in the economy using that currency, its central bank and the regulations to support it......

So if you have some "alternative" currency that has no backing of any economy, or central bank, or government or any intrinsic value of any description, you are having a punt.

go with No 4 at Randwick, race 6. At least you can eat a horse if it doesnt win any races. bitcoin is not even a thing!!!

cheers

Brendan
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Q: I started an electrical business a few months ago that is going well. In need of a new car but unsure of which way to go about getting it. As a new business is leasing a car the way to go? Or fronting up the cash and buying outright? Also brand new or used?
Thanks in advance
A: New v Used: depends on what you prefer. my personal opinion is that when you buy a new car it loses $10k in value on day one. For that reason I have always bought used.....but its up to your preference really

Lease v buy:
a: If you LEASE a car, 100% of each payment is tax deductible and you claim GST on each payment. you dont own the car until its paid off so you dont claim depreciation

b: If you CHATTEL MORTGAGE a car, you claim 100% of the GST on the car immediately, and the payments include an interest component (deductible) and a capital component (non deductible). You also will claim depreciation on the car because you own it immediately

c: if you pay cash for the car, you get to claim the depreciation, but you have no interest to claim. You also claim the GST immediately.

I generally advise to go with a chattel mortgage because you get the GST back quicker than a lease, but if you have the cash then you might be better off to save yourself the interest cost and buy it outright......

cheers
BC
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Q: Six years ago, I took out a residential property investment loan over two like properties, one of which is my residence, the other rented. Three years ago, I ended the tenancy of the rental property, and swapped properties ie rented my original residence. Up to that point , my loan interest was deductible. When I swapped homes I have been advised I cannot claim any of the home loan interest, only maintenance costs. I think this is incorrect advice as the loan is non-specific? Thank you!
A: Hi Peter.

the thing that will determine whether or not the interest is deductible is the PURPOSE of the loan in the first place.

from what I am reading, you have a SINGLE facility, over TWO properties. One is rented and the other is not.

clearly the PURPOSE of the borrowing is twofold: 50% for property A and 50% for property B. (or 60/40, or something depending on cost)

when property A becomes your rental property, then the income is assessable, and the expenses including interest is deductible.

so if you move from A to B, or from B to A, then the interest that pertains to the property which has become your rental property will be deductible.

The whole thing would have been a LOT neater and cleaner had you been advised to get a split facility that clearly shows what portion of what loan belongs to what property.

You have got some complicated CGT issues now arising from moving from one house to the other, and I STRONGLY advise you find yourself a CA or CPA who knows what they are talking about. Dont go to one of those shonk artists who profess to be experts after a 3 day course.

the answer is definitely NOT to sell up and buy another one!!!! why load yourself up with CGT, agents fees, legals and stamp duty on the new property???? The only reason to sell should be so that you can realise the gain for another purpose, such as retirement or a new investment. If you sell one house to immediately buy a similar house in the same area, then you have just loaded up on costs and tax for no net gain!!!!

And lastly, never ever ever EVER ask the ATO for advice about tax. the ATO is not there to provide you with advice, and they dont WRITE the legislation, so you will only get their interpretation of what they think it is. And they are wrong more often than you think.

Get yourself a QUALIFIED and EXPERIENCED accountant who can guide you through the investment property maze you are in.
cheers
Brendan
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Q: Can I use superannuation to purchase farm property?
A: the short answer is yes.

the longer answer is yes, but.......

and the but bit is where your accountant starts banging on about "sole purpose" and "arms length" and things get confusing.

your best bet is to get in front of someone who understands both super and farming and has the experience and qualifications to handle the job. It can be done but you need to get your ducks in a row, and the potential consequences of cutting corners and saving a few dollars on advice can be huuuuge.

I am sure that you will have no trouble locating someone closer than me who will fit the bill with the super and farming issues.

regards

Brendan
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Q: We're looking for a good financial advisor to help sort our finances so it works best for us as we move into retirement. My husband is 60yrs (semi retired) and I'm 55yrs (working). We own our own home, have 4 investment properties (2 in NSW and 2 in SA) plus another property overseas. We have $650,000 in a savings acc earning minimum return and we need this to be properly invested. I have $160k super in a industry fund plus we have our own SMSF with $35k. Any recommendations?
A: Hello tracey,
you are financial planners dream come true!!!! Make sure you are super happy with the advice and the ADVISOR before you sign up to anything. I am sure the bank where your cash is tied up has been on your case trying to get you signed up with a statement of advice and all sorts of other stuff, sometimes planning advice offered by banks has not taken into account much more than an immediate investment strategy

You will be well advised to consider your whole situation, taking into account investment, retirement, income tax and other issues.

You also have a heap of other issues in addition to your immediate investment question: retirement planning, estate planning, even wills probably need looking at. The fact that you have a fleet of investment properties tells me that you have a massive capital gains tax headache waiting to hit you, so you need to plan on how to manage this and minimise the taxation headaches whilst allowing for the best and most flexible retirement strategy that allows you to enjoy your retirement.
happy to talk tax any time, bpc@bpcaccounting.com.au or 02 4399 1833.

regards

Brendan
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Q: My husband is self employed and looking at buying a new vehicle for work. Our accountant was saying that if he pays less than $20k for the van it will lower his taxable income. Didn't quite understand what he meant. Can you please explain or clarify a bit more so we can make an informed decision moving forward? Thanks for your time. Sarah
A: G'Day Sarah.

1: the new van will be tax deductible if it costs less than $20k. This will reduce the taxable income by $20k. the tax saving will depend on your husbands actual income, but lets assume he makes profit of $100k AFTER claiming $20k for the new van. His marginal tax rate is going to be 39%, so the tax saving on the purchase of the van is going to be $7800 (ie 39% of $20k)

2. IF you ESTIMATE that his income is going to be lower than the previous year, AND the PAYG Instalments he has already made will result in a refund at tax time, then go ahead and vary the PAYG Instalment. It is after all your money:)

BUT............................

If you get the varied instalment amount wrong, and your husband ends up with a tax bill at tax time, then he will get slugged with interest on the outstanding amount.

Your accountant should be able to explain this to you without resorting to "accountantese" that makes it sound like gibberish. If he cannot explain it to you then I suspect he doesnt understand it himself, and you need to find a new accountant:)

hope this helps

BC
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Q: Hi - I am a permanent resident in Australia and I live and work in Melbourne. I pay around $2,000 every months towards a land purchase mortgage. Please advise if that is a tax deductible expense?
A: Hi Sahar,

holding costs for investments are generally deductible:
eg rates, insurance, body corporate, pest control, INTEREST on mortgages.

so in your case it would appear that you have a mortgage on a piece of land, no building on it and no rental income. Many people would presume that since you dont have any income you cannot claim any expenses. This is not true. The asset is clearly going to be subject to CGT when you sell it, and holding costs for any investment asset are deductible.

sooooo, the INTEREST portion of your mortgage payments will be deductible. If the mortgage is interest-only then bobs your uncle!!! If it is P&I then only the interest portion will be deductible. You should be able to see what the interest portion is on your statements, otherwise your bank will be able to inform you.

Just remember that any disposal of the land will trigger Capital Gains Tax, and you will need to know what the cost base is: which includes, the purchase price, legals, stamp duty, and lots of other things, so KEEP YOUR RECORDS!!!!

good luck
bc
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Q: I’m interested to get people views on structuring an investment plan for 2018. What’s the view on the mix between shares, property, managed funds and perhaps derivates – should one or two be a higher priority than the others?
A: ask 10 different people: get 10 different answers.

I think the most common answer is "it depends". No two people have the same circumstances, so I am tipping you wont get too many straight answers here.

If you have a financial planner: ask him/her. Then take that advice and compare it to advice from someone else. you will probably have to pay for this advice. In fact if you dont pay for it, that would indicate very little time has been spent on providing it, and its probably not worth anything.

The more informed you are the better chance you have of making informed decisions. But you will probably still end up making some wrong decisions, because no one is perfect, and everyone gets a few things wrong....

good luck:)

bc
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Q: Hi, we are looking at investing in a property. The opportunity is for us to buy a property (valued at mid $600,000). The owner will finance us, with no deposit, to buy, at $550,000 at interest only for 2/3 years. Then we can refinance with the bank to continue. Our situation is that we will not be considered for bank finance until our credit rating has dissolved. So this is why we are considering this. Who is the best person to talk to for advise on this?
A: Find a smart mortgage broker and a decent accountant who will work together to get your issues sorted. Your problem is NOT getting finance from a BANK, but finding the right lender to deal with. This is where a GOOD mortgage broker comes in, becuase if he is worth his salt, he will know that in some cases the finance needs to go through a number of stages before a top4 bank will lend to people with some credit history issues.
give me a ring Narelle, I know just the guy for you.

regards

Brendan
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Q: I want to invest some of my self-managed super funds into two starts ups? Do I have to set up another smsf to do so, anything else I need to be aware of?
A: If you want to invest in two start-ups, I presume that they are unrelated, and so will be separate assets, so on the face of things, should pose no problem.
BUT
dont do it!!! despite the fact that there is no legal reason not to do this in a SMSF, there is a can of whoop-ass waiting for you if you do. There are issues such as control, part 8 associates, in-house assets, sole purpose tests, audit valuation of the assets which could affect transfer balance caps, pension consequences, etc etc etc.

It is seriously a minefield and you seriously need to be all over the SIS rules and regs to contemplate this. (And to be honest, if you were all over the SIS rules and regs, you wouldnt be here).

I have a SMSF, I am a registered SMSF auditor and Chartered Accountant, and I would not do this in a pink fit!
You are begging the ATO to audit your fund each and every year. You are also going to pay for your SMSF auditor's kids school fees every year.....because as a SMSF auditor I would refuse the job. Which means that the only auditors willing to take this sort of work charge like wounded bulls!!

LENDING to a company (unrelated) is a different story though: you CAN do this, and as long as you can dempnstrate you have considered the risks and tick all the boxes with the auditor, then you should not have too many headaches......

good luck
bc
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Q: Hi, we are still catching up with our BAS payments from October and worried about the next payment in February. It is possible to get finance to help in case we need it?
A: I tell me clients that the ATO is your first choice short term lender who cannot say no!! (thats a bit cheeky, but the point is dont borrow money to pay a tax debt unless you have no choice)

they DO charge interest, and its not cheap......but if you have a decent reason they will often remit the interest.
also remember that for an individual, GIC charged by the ATO is deductible. Interest on a loan to pay your tax is not!!

your biggest challenge is to NEVER EVER EVER EVER lodge a BAS late!!!! The ATO will work with you if you have cashflow issues, but late lodgement = fines. and if you have a history of lodging late they probably wont want to talk to you about a payment plan.

https://www.ato.gov.au/General/Paying-the-ATO/Help-with-paying/

its all in here. anything under $100k can be done over the phone in most cases.
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Q: Does the computation for diminishing value depreciation shown in http://www.ird.govt.nz/tool-for-business/examples/example-diminishing-value.html
apply to Australia?
A: Base value × (days held/365) × (200%/asset’s effective life)

this is the method as prescribed by the ATO. the example you have seems to follow the same accounting principal. the gibberish about 200% / effective life is there to give you the depreciation rate:

eg
effective life for a laptop computer per ATO = 3 yrs

200% / 3 years = 66.67% depreciation rate.

you can self-assess the effective life if you want but its easier to use the ATO effective life tables.

have fun with it!!!

bc
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Q: I have just started my education in Australia, I am living with my wife, and should cover most of our cost by ourselves, I have saving in my country, and I want to transfer my saving to an account in one Australian bank. Could you please guide me whether this amount will be included tax or not?
A: Short answer is no
Long answer is still no, with a really boring explanation. I can trim it down to this:

If you earn INCOME, and you are an australian RESIDENT then you pay tax on it
You dont pay tax on SAVINGS, even if it comes from an overseas source.

If you transfer amounts over $10,000 the anti money laundering provisions mean that ASIO, and Fed Police might want to look at you, but so long as you arent a nut job you should be right.

hope you have a wow of a time in Tassie!!!
bc
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Q: Just started our own business and wondering which accounting solution other business owners prefer to use Xero or MYOB?
A: Xero and MYOB do virtually the same thing, and prices are very similar too. the days of MYOB being incomprehensible to anyone without a masters degree in accounting and technology are gone.
Support is your X-factor. If you have an accountant that prefers Xero, use Xero. Just bear in mind the amount of support provided by Xero is more along the lines of look up their "knowledge base" online and watch their "how to" videos. Which is fine. MYOB has a larger support team, but they will still try to point you towards their online library so you find out your own answers
But if you need actual people to actually show you how to do things, ask your accountant.
for my money, MYOB is the better value for money:)
cheers
bc
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Q: I’ve been on the aged pension for 2 years. I have my own company I’ve lent $20k to over many years but want to close/wind up the company. If I prepare a Deed of Debt Forgiveness for the $20k between me as the lender and my company as the borrower, what are the tax implications (if any) for me and the company? Also would this affect my aged pension entitlements? (I’m paid under Centrelink’s “assets test” not “income test”)
A: If the company has losses to be applied to the debt forgiveness then no one has to pay any tax, and everything is sweet. However if the company ends up paying $6000 tax on the $20k that is not a great result.
So what can you do if you want to wind up your company but you ALSO dont want to pay any tax on debt forgiveness????
I presume the company has no assets or cash in the bank to pay you the $20k?
SO you have tipped $20k into your own company ages ago and all the money is gone?
What about if you take $20k worth of share capital as consideration for your loan??
Company no longer owes you any money, and has no income to report.
if the company has less than $1000 in assets you can simply deregister it
if there are more than $1000 in assets you need to do a members voluntary winding up......not a cheap exercise, so you need to get the assets out of the company THEN shut it down.

the problem you have is that you need good advice from someone who knows what they are talking about, and many tax agents dont know their arse from their elbow when it comes to comapny law and winding up. Find a qualified and experienced guy to help you out. The last thing you need is Centrelink coming along and assessing you on $20k of deemed income because someone did something to wind your company up without considering all the implications.
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Q: My 19yo daughters lease agreement date ended approx four weeks ago. She has continued to pay rent from that date, but has now signed a new lease on another property with a different real estate. Her old real estate agent says that she must give 21 days notice before she vacates even though there is no current lease agreement. She can not afford to pay two separate lots of rent on two properties. The lease is up. Why can't she just hand the keys in and move out??????
A: rental tennacy act. look it up. the agent is right. it sucks but its the law. depending on how the relationship is and what the likelihood is of finding another tennant perhaps she can negotiate a deal, where the landlord is not out of pocket.

remember the reals estate agent is working for the landlord, not your daughter. Also put yourself in the owners shoes: they want to ensure that they maintain the income stream too.

https://www.tenants.org.au/factsheet-09-you-want-to-leave

regards
brendan
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Q: Hi, I believe the rental property I just sold was an active asset given it was rented temporarily at the time of sale and I managed the property, is this reasonable?
A: or Tinkler........
answered
Q: Hi, I believe the rental property I just sold was an active asset given it was rented temporarily at the time of sale and I managed the property, is this reasonable?
A: Hi robert, yeah...nahh. If you sold it then the CGT issue is happening this financial year. Bear in mind there are a few aces up your sleeve still:
1: you CAN choose to apply the Principal place of residence exemption for up to 6 years after you move out.
2: you can do whatever you need to do in order to reduce your other income THIS year:
eg salary sacrifice into superr
eg dont get paid (dont laugh!) I mean defer wages for a month or two if your employer will play the game
eg make other tax deductible payments

A note for you about tip #1: you can only apply the PPR exemption to ONE house at a time, so if you moved out of house A and bought a new home, then you need to choose which house you are going to apply the PPR exemption on.....most people choose to pay less tax TODAY because they may not ever sell house B. If you need to discuss this further let me know and we can discuss over the phone.
cheers
bc
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Q: Hi, I believe the rental property I just sold was an active asset given it was rented temporarily at the time of sale and I managed the property, is this reasonable?
A: no mate, unless you are running a business of managing a large number of properties you are never going to get that across the line.
I presume what you are looking to do is apply the general discount of 50% then apply an active asset discount of a further 50%, then if you are over 55 you could apply the retirement exemption and walk away with nil capital gains tax.
I like your thinking but its never going to fly. The ATO is all over that game and they dont like it when people try it on.
I note that you state that the property was rented temporarily at the time of sale......does this mean it was not a rental property for the whole time you owned it???
regards
Brendan
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Q: Have worked for the same company for 11 years and I’ve just let my super to be managed through work. The returns have been getting are around 7 to 8% per annum, Is this considered a good return?
A: If you could lock in 7% for the next 30 years would you be happy with it? Or would you be looking over the fence at the guy getting 16% and thinking "7% is shit"
Trouble with high returns is that they ALWAYS come with risk. the 16% guy might have negative returns the next year...

what you have I think is actually two questions:
1: where do I want my super to go?
and then:
2: what is my long term strategy for retirement?

Q1 is pretty easy: find the fund that lets you do the most things at the least cost
Q2 is very difficult to get a simple answer on: there are a gazillion things to consider.

If you haven't had a chat with someone who can help you with this, now is a good time to start. I would not start with the free advisers in your current super fund, they have a clear vested interest in retaining your membership. Find someone independent, who charges you a fee for service, the less commissions are on the table the more likely your advice is going to be unbiased.

cheers
bc
answered
Q: Hi, I’ve been reading a lot Bitcoin trying to get an understanding of how it works but it’s still a mystery. Can I ask how others understand it, why is there so much talk about it, is it a fad or is it real and the future? Thanks
A: Look up the Great Tulip Bulb Crash of 1634.
Bitcoin is Tulip Bulbs waiting to happen.
Anyone who invests in currency that has no backing anywhere from any government might as well be putting it all on N06 in Race 4 at Randwick.
Seriously: If you cannot see the risk in investing in something that has gone up a gazillion percent in 12 months, doesn't DO anything, doesn't EARN anything, and is only going up in value because of public hysteria over the value of Bitcoin; well then rip in. I hope you do well. But know the risks.

read this:

https://www.cnbc.com/2017/07/20/bitcoin-bubble-dwarfs-tulip-mania-from-400-years-ago-elliott-wave.html
bc
answered
Q: Hi I have been trying to change accountants from a Melbourne firm to a Sunshine Coast Firm the new Accountants have sent a ethical Letter to the old accountants to release documents and tax records but an outstanding bill of my ex wifes hasn't been paid and they wont release any information or even respond to my emails and phone calls by business and tax returns are being held up by this. Can you please advise what I can do ?
A: Hi Chris,

the right of lien is a contentious issue. From the old firms perspective I can see their issue: they just want to get paid, and short of taking someone to court they can only withhold documents. It is not a great way to end a professional relationship, as it generally leaves a sour taste in everyones mouth.
there are a few questions that you should consider:
1: was your ex-wife your wife when this outstanding invoice was raised: ie can they legally hold YOU responsible for the liability?
2: how big is the bill? it may be simpler to just cop the cost in the neck, because its probably cheaper to do this than get your new bean-counter to reconstruct things.

Unless the invoice is huge my advice is pay the bill, get the documents and move on.

regards
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Q: I use my car for work and looking to buy a new car, around $40k. I have $10,000 in savings and would like to ask if I should use the money for a deposit or look to get a loan as part of a salary sacrifice. Is this a good idea and are there any tax implication or benefits, thank you?
A: I think that your question is "should I go with a Novated Lease or buy my own car"??
and the answer to this is "it depends"
you WILL save on tax with a novated lease.......BUT your payments under a novated lease include a deemed amount to compensate your employer for the Fringe Benefits Tax that your employer is going to deal with because it is now providing you a car at its expense.

FBT actually is extremely effective at transferring the tax burden from the individual driving the car to the employer....and there is very little you can do to dodge this cost, because the novated lease company will tell you how much TAX you are saving, but remain deadly silent on any Employee Contribution.....which you are paying.

What I would do is compare the costs of doing it all yourself out of your take-home wage, and see how much income you have left to live on, then compare this with how much you have to live on under a Novated Lease.

my bet is that you wont be much worse or better off under either scenario.

UNLESS you want to buy a second hand car, which for the most part are not available under a novated lease........the big saving for you here is the loss in value that a brand new car has in its first month has been absorbed by someone else. Hence you initial cost to purchase a car is a LOT lower.......

but thats my personal preference: I have never bought a new car and doubt I ever will. They are a sinkhole for money and are nothing other than a means of getting from point A to point B. I buy a second hand car and drive it until it is dead.
But if you like the smell of a new car, then you wont be any worse off with a Novated Lease......but you wont be any better off either:)

cheers

Brendan
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Q: I have $175,000 in super and due to retire in 8 years. What’s the best way for me to grow my super?
A: I have seen people who make the decision to chase big returns late in their working life because they have had a look with retirement around the corner and figured out that there isnt enough in super to maintain the desired lifestyle.
Trouble is that the people who dont have enough in super are quite often the ones who can least afford to take a hit on high-risk, high-return investment strategies.
Some of the results of chasing big returns are too depressing to mention....
Its never too late to do something, but risk is a huge factor when you dont have time to recover from another GFC.....

Find an adviser who will take into account your WHOLE position: not just super, and think about putting together a plan that takes into account everything that needs to be considered for your retirement. Super is only ONE facet of this.
good luck

One thing that everyone needs to file away is that it is NEVER too early to consider how you are going to fund your retirement!!! If you start at 25, then you have an extra 30 years to get your house in order than if you start at 55. Thats 30 years of compound interest people. it cant help but make an enormous difference to your lifestyle.

cheers
Brendan
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Q: Needing advice for a starting out business renting a chair. Tax advice etc would be great?
A: hairdresser?
best advice you can get initially is KEEP YOUR RECEIPTS!!!!
then use an online accounting package like MYOB Essentials or Xero. they all do the same thing and will save you heaps of time and $$$$ when you are doing your tax
if you are thinking that you will turn over more than $75k per annum, register for GST.
And look into income protection insurance: if you are self-employed and cant work, things get very unpleasant very quickly
lastly find yourself a good bean counter that doesnt mind giving advice to small businesses.....they do exist, but the fancy-schmancy end of town with their wood-panelling and fancy big offices are likely to cost more. Look for someone with experience and qualifications, but not necessarily the big firm.
good luck
bc
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Q: Hi. Im paul. 38, employed full time as supervisor for 9 months, average weekly income of 1200 aprox, currently bankrupt and require dept consolidation and funds to purchase a car. Ive always been good at earning but never good at financial planning and never seem to be able to pull ahead. Any advice or direction would greatly be appreciated. I have outstanding depts of 15000, no security. Can u please help me to finally use my secure income to fix my bad decisions of the past?
A: As an undischarged bankrupt you are allowed to own a car worth up to $7600. Anything over that will create headaches for you with your trustee.

Another issue is the contribution you may need to make to the estate if your earnings are higher than the threshold (something like $56k AFTER tax).......so its going to be difficult to manage all this.

If you are bankrupt then why do you need debt consolidation? They should all be written off, unless you have managed to rack up some more debt since declaring bankruptcy.

You DO need to get things sorted out, and this is probably going to cause you some pain, as it seems you need to make some big changes to the way you do things.

This is going to sound harsh Paul, but I would say you have two options:
1: find a financial planner who will become your minister for finance to help you manage your affairs
2: make some tough decisions about what you want out of life and set some goals and work towards them

Any advice you DO get needs to be from someone with experience in dealing with bankruptcy issues, because this changes lots of things in managing your finances....

Having no knowledge of your personal circumstances I know that my assumptions could easily be WAY off target, so apologies for treading on toes if I have upset you mate. Hope the advice helps.
bc
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Q: We just purchased a property in Western Australia on 5 acres. The property has a house and a shed on it.

We're intending on fencing the area around the house (around 1000 square meters) and renting the house and this portion of the land to tenants.

The remainder of the property will not be lived on, but we don't want to allow the tenants access.

How does this affect what we can claim as expenses for tax purposes. ie loan interest on the property?
A: The property (all of it) will be subject to capital gains tax. You will need to apportion the interest between the rental portion of the property and the rest of the property.
the interest on the rental portion will go into your rental property schedule and is clearly deductible
the vacant portion is possibly different, there are two options:
1 you can claim "holding costs" as a tax deduction each year, OR
2: you can add the holding costs to the cost base if they are not claimed as a tax dedcution elsewhere....this will reduce the capital gain when you sell it.

moral of the story is KEEP ALL THE DOCUMENTS!!!!

its always a lot harder to reconstruct this stuff than it is to keep the actual information. So keep everything. Rates, interest, fencing, clearing, every thing.

cheers

BC
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Q: I work in a job where I travel a lot of for. I use my own personal car and record all my kilometres travelled for work purposes. My employer pays me for kilometers travelled but it's not all taxable so I dont get taxed on all money earned each fortnight.
For example I may earn $1300 gross for a fortnight, I should be taxed $138 but I'm only taxed $90. Come the end of financial year will I end up with a tax debt, or can I claim all of the kilometres at tax time? Thanks
A: Glenmorangie I find best for reading ATO documents: numbs the pain:)
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Q: I am thinking of changing jobs. I have 300hrs annual/long service. Will i pay more tax if i take a lump sum or am i better asking for time off with pay and then resign? Thank you
A: Lump sum payments of leave balances are taxed differently to normal wages. For example if you earn $1500/week and are paid weekly your PAYG W will be something like $350. if you take 300 hours EXTRA in one week, that would equate to an additional $10,000 in one week, and normal tax table calculations are based on you earning the SAME amount each week.
so you would end up paying around $5000 in PAYG W!!!

So, what happens is that your payroll department has to do a complicated calculation that takes into account your average earnings and applies a different (lower) rate of tax to this payment. Trust me it will still hurt like hell, but you wont be crying at tax time when you dont get a huge tax bill either.

And what Scott says about ETP's is right too. they are taxed differently again, but it needs to be a genuine redundancy.

Also bear in mind that depending on who your employer is and how big they are, you may have to discuss how the unused leave is paid out. There are many small businesses out there that would really struggle to take a $10,000 hit when an employee leaves, it may not be what you want, but sometimes the employer needs to pay the leave out over a period of time....

good luck
Brendan
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Q: I work in a job where I travel a lot of for. I use my own personal car and record all my kilometres travelled for work purposes. My employer pays me for kilometers travelled but it's not all taxable so I dont get taxed on all money earned each fortnight.
For example I may earn $1300 gross for a fortnight, I should be taxed $138 but I'm only taxed $90. Come the end of financial year will I end up with a tax debt, or can I claim all of the kilometres at tax time? Thanks
A: Just a little extra info here for you Sheree: the ATO has a document called PS LA 2005/7, which sets out the circumstances under which you MIGHT be able to get away with claiming things based on bank statements as evidence (eg if you have lost the receipts)......google the document and enjoy some light reading, hahaha

BUT BE WARNED!!!! the ATO giveth, and the ATO taketh away!!!

this document seems to indicate that you can punch out your bank and credit card statements, rip in with a highlighter and claim everything. Not necessarily so. The BEST document you can have is an ACTUAL LEGIBLE RECEIPT. They might allow some claims for some things based on a bank statement, but take it from me: they dont like it, and you will have your hands full getting the ATO to accept large claims based on bank statements alone if you get an audit!

good luck!!
Brendan
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Q: We had a old company with credit card balance of $25000 then we opened a new company on august 2017 with new myob file.

For some reason i made mistake, instead of paying the old card from old bank account and entering in old myob file, i paid it from the new bank account which is for new myob file and new company.

My boss doesnt know this yet because he did not want anything with old company to go in new myob. how do i fix this without raising red flag?
A: Mate, go and tell your boss you made a mistake and then tell him how you are going to fix it:
1: transfer money from old company bank account to new company bank account
2: the deposit from the old company bank account will cancel out the withdrawal from the new company bank account
3: everything is then exactly how it needs to be.

If you attempt to cover this up and your boss finds out you are playing ducks and drakes with the business bank accounts, you will look a LOT sillier than if you stick your hand up and say "oops my bad" as soon as you become aware of the error.

good luck with it, I hope your boss understands that people are human and mistakes do happen
brendan
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Q: I work in a job where I travel a lot of for. I use my own personal car and record all my kilometres travelled for work purposes. My employer pays me for kilometers travelled but it's not all taxable so I dont get taxed on all money earned each fortnight.
For example I may earn $1300 gross for a fortnight, I should be taxed $138 but I'm only taxed $90. Come the end of financial year will I end up with a tax debt, or can I claim all of the kilometres at tax time? Thanks
A: yup

ALL receipts.

if you cannot substantiate ALL the claims then the ATO is able to deny the claim....either the part that you cant find receipts for or the WHOLE claim.

so if you want to claim using the log book method you need to do your homework and keep ALL your receipts.

remember also that you will also be able to claim depreciation and finance costs on your car under the log book method.....or at least you will be able to claim the % of the expenses that are work-related.
regards
Brendan
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Q: I want to put my house in my children's name
What is the best way to do this.?
A: Hello Sylvia.
you may want to get some tax advice in advance for yourself and your children. This home is probably exempt from capital gains tax unless you have run a business from it, or earned rental income at some point. If you transfer the house to your children you may incur capital gains tax.
Also you may find that you could be handing a future capital gains tax headache to your children.......that could be avoided with some careful planning.
I strongly recommend that you get some advice on this before you race out and sign transfer documents.
good luck
Brendan
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Q: I work in a job where I travel a lot of for. I use my own personal car and record all my kilometres travelled for work purposes. My employer pays me for kilometers travelled but it's not all taxable so I dont get taxed on all money earned each fortnight.
For example I may earn $1300 gross for a fortnight, I should be taxed $138 but I'm only taxed $90. Come the end of financial year will I end up with a tax debt, or can I claim all of the kilometres at tax time? Thanks
A: Hi sheree,

if you have been paid an ASSESSABLE car allowance, then you can (and should) claim the deductions that correlate to the income. your options for this are:
c/km method: claim a reasonable estimated amount of work-related travelling up to 5000km at $0.66/cm

log book method: keep a log book, record everything and keep ALL your receipts. there is plenty of advice (even from the ATO) online, but you MUST comply with ALL the rules, so you have to be very sure you have all the info and documents that the ATO will require. The deduction is potentially very high, so the ATO is very much aware that people will want to have a crack at claiming large amounts without all the documents to support it.

so proceed with caution!!!

or get some advice from someone who knows what they are talking about. You will probably find that the accounting fees will be offset by a larger refund in your return.

regards
brendan
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Q: Breaking News

Australian Prime Minister announces there will be a Royal Commission into the Financial Services Industry

Mr Turnbull says Australia's financial system is admirable but there have been instances of poor practice.

Consumers must be protected, Mr Turnbull says, and the financial services sector must remain stable.

Do you agree with the Government's decision?
A: A Royal Commission will cost a mountain of cash, but it will be money well spent if the findings and recommendations are sensible and add to the value of the services provided across the board to clients. And I doubt very much that this will take place.

Let me provide an example of something that is neither sensible nor adds value. On 1 July 2016 some moron decided that Chartered Accountants (who need to study for around 8 years to get their designation) are not sufficiently qualified to provide advice to their clients on matters pertaining to superannuation, such as whether to commence or commute a pension, open a SMSF etc.

This meant that for a whole bunch of stakeholders the person probably best placed to provide advice across a range of inter-connected matters, such as tax, retirement, asset-protection, estate-planning, retirement planning and the like was not able to advise on one key element of this broad issue.

That means that in many cases, the client will go to their CA or CPA for MOST of their advice, because they understand the "whole picture" and are able to view strategies holistically, so as to advise on the effects across many areas.
Then the client will have to go to a potentially unrelated financial planner, who may or may not have any expertise in the wider areas addressed by the CA. This advice may or may not take into account the other factors or flow-on effects of a particular strategy.

If the client is fortunate, the planner and the accountant will work together and collaborate to provide the best outcome for the client. This is by no means guaranteed, because accountants and planners do not always agree, or are nervous about sharing information, or a frightened of losing the relationship.

So the net result in many cases is:
a) not optimal for the client, and
b) more expensive
net result: no increase in the benefit provided to the client, however almost guaranteed to cost more.

So, forgive me if I seem cynical here, but I doubt that any Royal Commission will result in an improvement of the situation, unless the terms of reference take into account the need to provide to the client the most sensible outcome.
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Q: I am wondering how tax works with deceased estates. In particular taxing super annuation balances and insurance. My Dad died this year and my family and I have been given the option of transferring the money to us directly or to transfer it to the estate, as we haven’t yet sold his house and it’s in trust. We’ve been told that if we transfer the balance of super annuation and insurance we will be charged up to 17% and up to 37% respectively for the money. Just wondering which way we’re better?
A: This is why you need to talk to an expert Sarah. On the face of things I cant see any CGT applying to super death benefits paid out of a fund......or any tax other than death benefits tax if your father was retired.
Get yourself in front of a CA or CPA with runs on the board with estates, super and income tax......and I presume it wont be super cheap...but the potential costs (or potential savings) could far outweigh the accounting fees.

good luck
bc
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Q: I am wondering how tax works with deceased estates. In particular taxing super annuation balances and insurance. My Dad died this year and my family and I have been given the option of transferring the money to us directly or to transfer it to the estate, as we haven’t yet sold his house and it’s in trust. We’ve been told that if we transfer the balance of super annuation and insurance we will be charged up to 17% and up to 37% respectively for the money. Just wondering which way we’re better?
A: Hello Sarah,
this is a VERY complicated area of superannuation and tax legislation. The answer to this may well be exactly what Glenn has told you, but you need to get in front of a taxation and super expert as soon as you can to see what options are really available to you.
the most common arrangement with death benefits is that they go to the spouse tax free, but I presume your mother has already passed away. It boils down to what the superfund MUST do with the proceeds, or what discretion it MIGHT have in paying the benefits to family members. There MIGHT be scope for benefits to be paid out of the fund tax-free......but you will need to talk to an expert in BOTH tax and super to get the right answers......even then those answers may not be the ones you are hoping for.
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Q: Met with my financial adviser on Tuesday and he tells me my superannuation increased by 7.2% over the past 12 months. I’m a little concerned as I thought the market had performed better than that .... is 7.2% at the lower end?
A: put it back on your planner Ben. ask him why your fund performance is so shitty when every man and his dog is getting double digit returns.
maybe its after you have pulled out pension payments and lump sums.
maybe all these other funds are not really reporting returns on the same basis as yours (eg 20% return might be GROSS return before all the fees charges tax and whatnot)

the big thing is to be sure that your planner is working as hard as he can for YOU! and make sure you are comparing apples with apples when looking at returns advertised by other funds

Your current planner should be HIGHLY motivated to ensure that you stay his client. If he doesnt seem that excited to provide you answers then shop your business around, but be careful of big statements regarding huge investment returns......
good luck
Brendan
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Q: A friend of mine he been at court three times for disqualify drive license, now he had an accident and was reported for driving without care and attention, now he have a court to go again, what would happen if he don’t attend the court and instead move to different states??
A: this has been ignored by everyone for over a day.....so I will offer my thoughts: not attending court is possibly the silliest thing your friend can do. Moving to a different state wont help you because all the different state police forces collaborate to bring you back to court where he will face the original charge plus a heap of other ones. Maybe the best thing your friend can do is stop driving without a licence.
might not be what your mate wants to hear, but driving without a licence is begging for trouble.
your friend needs a lawyer asap.
good luck
brendan
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Q: we rented a property for 3 1/2 years,
so we vacated on the 23/10 since then we had a final report saying not clean enough and the ventaton blinds broken, it has since been recleaned and they still say blinds broken
in the time we rented not one 3 month rental inspection was anything ever said about the blinds, now they say they are getting quotes for them to be fixed, they weren't happy with the first quote and are getting another and its supposedly yo help us
where do we stand?
A: there is something in the rental tennancy act that refers to reasonable wear and tear. If the blinds are broken because they were old when you moved in and were on the way out anyway then you probably have a leg to stand on.
If however they are broken because you had a wild party then I suspect you are going to lose some of your bond money.
look up reasonable wear and tear online, talk to maybe the department of fair trading and have a chat with a solicitor.

either way it looks like you are going to be spending some money on something....either a solicitor or a new set of blinds.....unless you can sort something out with the agent before everyone gets upset.

good luck
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Q: I have just received a land tax bill for my primary place of residence, I purchased the property a little over 12 months ago. I know I'm not liable for this as it is my primary residence which I can easily prove, but why would the OSR have assumed it is an investment property? Would it be something incorrect with the settlement documentation? From the time of purchase our intention has always been to reside at this property.
A: do you own the property personally or is it held in a trust?

Brendan
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Q: How long does it take to register a company for GST in Australia? Does it get registered with the ATO within 24hrs or does one have to wait weeks for it?

Thanks for your help
A: Setting up ABN and GST and whatnot is pretty straightforward to do yourself online, apart from a few curly questions that the wizard throws at you. I generally tell people that they CAN do it themselves, but the vast majority are happy to pay someone with experience to do it. After all, we do 50-100 GST and ABN applications a year.....so we have seen every curly question going around:)
good luck
Brendan
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Q: Hi, I recently have started my own business, and I run out of an appointment book. Receive cash and eftpos transactions. When it comes to tax time, how do I show my earnings? Do I deposit the cash into a seperate account into my bank? Or is it ok to deposit and transfer into my house deposit savings account and description it as Business earnings?
A: What happens to the cash and EFT deposits is your business .........once you receive the money. The issue is making sure that you correctly record ALL the income and ALL the expenses in a way that your bean counter can rely on when preparing your tax return.
there are a multitude of online accounting package providers who offer cloud-based packages aimed directly at small businesses like yours. Look at the likes of MYOB Essentials, Xero and Reckon....they all pretty much do the same thing and all pretty much cost similar amounts.
And what Andrew has said about keeping the business stuff in a "business account" is spot on!!! it will make your life a LOT easier if you have one bank account to go through.
cheers
Brendan
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Q: Hi, I'm a locum Optometrist who does itinerant work (for different companies in different locations when they need me). I've just recently purchased a new car. Currently, in the process of setting up loan structure as i am financing to maximise the benefits as a travelling optometrist. Someone has mentioned to agree to a 'lease contract' so as to tax ddeduct the whole amount of the vehicle? This is opposed to actually owning the vehicle at the end by paying it off? Thoughts?
A: I would think that you would be filling out the individual application section. you nominate that the car is predominantly for business use.
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Q: My business partner and I bought an investment property in a company trust. My family has subsequently moved into the property and I have agreed to buy my business partners share. Is there a way I can buy them out without having to change property ownership and pay stamp duty, thanks ?
A: Hi Phil. is it a company or a trust?? there is no such animal as a company trust.
I presume it is owned by a trust, most property purchases are held in a trust to manage CGT more efficiently than a company.
The transfer might be a transfer of UNITS in the trust, rather than property.
If this is the case the bad news is that you are still up for stamp duty, however the good news is that the rate of stamp duty on the transfer of units is potentially much lower than stamp duty on real property.

I STRONGLY recommend you get in front of a good CA or CPA to talk about this: there are all sorts of issues that can take the jam right out of your doughnut here so the smart thing to do is PLAN CAREFULLY so you dont accidentally shoot yourself in the foot. The last thing you need is to save yourself $3-400 in accounting fees to land yourself a $25,000 stamp duty headache....and CGT needs to be looked at too,and potentially Fringe Benefits Tax, and Land Tax, and and and...........

regards
Brendan
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Q: Hi, I'm a locum Optometrist who does itinerant work (for different companies in different locations when they need me). I've just recently purchased a new car. Currently, in the process of setting up loan structure as i am financing to maximise the benefits as a travelling optometrist. Someone has mentioned to agree to a 'lease contract' so as to tax ddeduct the whole amount of the vehicle? This is opposed to actually owning the vehicle at the end by paying it off? Thoughts?
A: The word "lease" doesnt necessarily determine what the nature of the contract is. Nor does the work lease make it tax deductible Andrea. If you have a lease you are essentially hiring the car from the finance company. If there is a large payment at the end it is normally referred to as a residual payment. How they work out the payments is not really important: the issue is the amount they want you to pay weekly. This is going to vary according to the size of the residual payment. big residual = smaller lease payments.

I think that perhaps you are correct in that the arrangement you are talking about is a chattell mortgage. the term "balloon" is most commonly used in a mortgage situation, If you enter into the mortgage, then you will need to calculate the interest portion and the depreciation on the vehicle......and thats where a good bean-counter comes in handy. You can do it yourself, but in my experience the additional cost of getting it done by an expert outweighs the time and headache of figuring it out for yourself

hope this helps
Brendan
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Q: Hi, I'm a locum Optometrist who does itinerant work (for different companies in different locations when they need me). I've just recently purchased a new car. Currently, in the process of setting up loan structure as i am financing to maximise the benefits as a travelling optometrist. Someone has mentioned to agree to a 'lease contract' so as to tax ddeduct the whole amount of the vehicle? This is opposed to actually owning the vehicle at the end by paying it off? Thoughts?
A: Have you already bought the car? Is this some sort of "lease/buyback" arrangement on the car???

here is what I tell people who ask me whether to lease or purchase a car: it doesnt matter. mostly.

Under a lease arrangement you dont "own the vehicle, and your lease payments are 100% deductible

Under a chattel mortgage or hire purchase, you own the vehicle and hence the things that you claim are:
1: interest on the finance
2: depreciation on the capital cost of the vehicle

what you need to bear in mind is that over the lifespan of the vehicle, you will ultimately claim 100% of ALL the expenses. Lease expenses tend to be consistent hence the total tax deduction each year will be the same.
HP and depreciation expenses tend to be higher in the first couple of years hence the tax benefit will be greater earlier on in the life of the vehicle

I advise people to look at the TOTAL cost of ownership.

so calculate total amount paid for the lease over the period of the lease

then calculate the total interest plus purchase price of the vehicle

whichever one of those is the smaller number is probably going to be the best one to go with, because the tax benefit is secondary to the actual COST of the thing.

good luck
Brendan
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Q: Hi I want to start my own website/blog. Is the monthly web hosting fees tax deductable and the camera gear i will be buying to take photos of my content be tax desuctable too? If you’re here in australia you need an ABN number to have a website. My business structure most likely is sole proprietorship.
A: Hi Joy,
you have all these questions to answer plus a buckeload more:
- do you need to register for GST?
- will you have employees?
- is your new business going to operate at a profit?
- if it is going to make a tax loss, can you apply the losses to your other (assessable) income?
- what are you going to do about record-keeping?
- the list goes on....
the best thing you can do BEFORE you do anything else is get yourself a good accountant to guide you through the maze of small business. It probably wont be real cheap, but it WILL save you a lot of headaches in the long run.

good luck
Brendan
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Q: Hello, I was wondering what the different types of accounting professions are associated with a commercial business? Can you please name the different specific titles of the professions
A: that is an interesting question John. There is no specific "commercial accounting" designation, so you will find that there are CA's in public practice, industry, small business, government and education. Same applies for CPA. The things that probably set public practice apart from commercial business accounting is the type of work you do lends to different specialisations.......which involves perhaps post-grad diploma or specialist courses that help the accountant in their chosen field.
One thing you can take to the bank is that of all the accounting designations, you will find some that require a significant amount of post-graduate training and further education. And some are for want of a better word a "membership" that requires next to no effort to join, as long as you have the fees.
SO if you are looking to employ someone internally in your business, go with someone with a recognised qualification such as CA or CPA....they had to work pretty hard to get their ticket. Ask them how much time they had to work to get their qualifications, and what areas of accounting they covered in getting there.
If you are looking for guidance in career choice for yourself, go with the hardest qualification to obtain: it will carry the most weight when applying for jobs.
Hope this helps
regards
Brendan
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Q: Hi. As part of a financial settlement I was ordered to take over the mortgage on an investment property my ex-partner had prior to us getting together (and we maintained whilst together). It has always been solely in his name and soon the mortgage will be in mine. My question is, if I sell this property will I have to pay capital gains tax on it? He only lived in it for 6 months prior to it being used as an investment property.
A: Hi Peta,
There are rollovers for family court order transfers of property. There are also lots of ways to shoot yourself in the foot here too. Get some good advice on the CGT implications here, and document everything that happens. You will probably need to get yourself some market appraisals to establish the market value of the property when it becomes yours. The fact that he lived in it for 6 months wont be of any benefit to you, but you do need all the details of the original purchase by him.
feel free to give me a call, Tighes Hill is not far away. Or get yourself a good CPA/CA closer to home.
regards
Brendan
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Q: hi there just needing some sound advice. my mother recently passed away suddenly and has left her house to myself and my siblings will we have to pay capital gains tax on this house if we sell. we both reside in the house at the moment,also will we have to sell with the 2yrs of her death?
A: the house sounds like it was your mothers principal residence, so there is no capital gains tax on it for up to 2 years after her death.
If the house passes to you from her estate and it is then YOUR principal residence, then you wont have any capital gains tax either.
SO, no you dont necessarily have to sell your mothers house to avoid CGT.
BUT!!!
talk to a CPA or CA about it. And bring ALL the info you have on the house: eg
when did your mother acquire the house?
what is the market value of the house as at the day she passed away?
has it been used to make rental income along the way?
who is going to receive the property?
what does the will ACTUALLY say about it?

there are a million ways this can turn nasty, so if you have a good solicitor and a good accountant they should both be aware of the potential traps. Dont go cheap and nasty on the advice here.....it is too important to use someone who has no qualifications and experience here. GEt someone you know has the experience and qualifications to provide you sound advice.
good luck
Brendan
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Q: If I use some of the funds I have in my redraw account to start a share portfolio will the funds be tax deductible?
A: If the purpose of the funds to be redrawn is for income-producing purposes, then that portion of the interest bill IS deductible.
there is a case that everyone quotes called Harts case, and in this case the issue of the purpose of the loan and the proportion to be claimed is examined.
the issue becomes figuring out how much of the interest is for a creditable purpose, expecially when redraws, repayments additional drawdowns etc etc take place.
it can get really complicated to figure out how much of you loan is deductible when you have a house, some shares, a car and a holiday all sitting against one mortgage.
that is why a split facility can make life a LOT easier for everyone.
Talk to your mortgage broker about a split facility. Best also to talk to your accountant about the tax ramifications and what he or she will need to get the best bang for you buck.
cheers
BC
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Q: I'm contemplating selling an investment property. Are the sales agent's commission and advertising costs able to be claimed on tax?
A: they will form part of the costs of selling for calculating your net proceeds on sale...which will go to reduce the capital gain on disposal.

for example:
Sale of house $550k
commision and advertising 20k
NET proceeds $530K

If the cost of the property (including stamp duty and legals) was $330k, then the gain would be as follows:

Net proceeds $530k
Cost Base $330k
Gain $200k

then you would apply whatever concessions and reductions are available at that time, eg 50% General Exemption or PPR exemption etc etc.....and what is left over gets added to all your other taxable income and you get taxed on this at your marginal rate.

hope it sells well and quickly!!! Dont forget that TIMING is very important!!! It is the CONTRACT DATE and not the SETTLEMENT DATE that the ATO is most concerned with. You may have som tax minimisation options available to you provided you plan ahead and know what your options are.....so get yourself in front of someone who understands all this so you can get the best result, and pay the least amount of tax possible.

good luck

BC
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Q: My accountant did not include total charity donation in last years return leaving $4000 for this year, then said oops, can't claim, can claim only in the year it is paid. Is this correct?
Then this year, supplied calculations to take to Centrelink re appeal for pension.
Centrelink reviewed calculations for profit on shares but said they were not interested in any Figures as they are DEEMED on total face value of shares. Have I got a totally useless account. $200 for useless, unusable advice??
A: you should amend the last years return to claim the donations. It sounds to me like there was some sort of conversation about "leaving out" $4000 of donations, so I suspect there is maybe a bit more to the story???

I am not sure what you mean by deemed profit on shares: is this profit on sale of shares, or deemed income from dividends paid?? Again it sounds to me like there is more to this story....

I cant say whether you have got a useless accountant, but if I were you I would go back to this accountant with some questions about the donations and the shares.....Most reputable accountant types are more than happy to go through their work with clients....if there is an error you will probably find that the accountant will rectify this at no charge.

If not, then you can start shopping around for someone.....a good start is a well-established CA or CPA firm. They will at least have all the qualifications you need, and the code of conduct requirements of the two big accounting bodies forces a level of service that you may not see in some accountants with other qualifications.
good luck
Brendan
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Q: Hi - I'm in the process of setting up a small business (retail, predominantly online) and would like to donate a % of each sale to a registered charity. Are there any pitfalls to keep in mind? How would the donation amount be treated in terms of taxable earnings? Many thanks
A: donations need to be made to a deductible gift recipient to be claimed as a tax deduction. In general a registered charity means the same as a DGR.
SPONSORSHIP is a different thing....if you are unable to claim a "donation" then perhaps you might be able to become a "sponsor" to the charity, this is a normal business expense and hence deductible.
regards
Brendan
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Q: Unregistered car for two years finance company still owed from six years ago I am third person to purchase can I register it ??
A: Right now the car has no value to the finance company because it would be too hard to sell. When you spend a heap of money getting it back on the road you can bet your bottom dollar that the finance company will find out where it is and they will be there with a tilt tray quicker than you can say "who wants to go on a Sunday drive?"
The finance company is legally able to take the car.
Your best option is to negotiate directly with them to pay out the finance. If you know how much is owing then you can work out how much you need to pay to them to release any right or lien they have on the vehicle....THEN you can register it.
cheers
BC
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Q: Hi I’m a New Zealand citizen working as a relief teacher in Queensland. I own an Unit in Brisbane. I bought it 2 yrs ago and living in it. My circumstances have changed and I need to move back to NZ. If I rent out my Unit in QLD how much tax do I need to pay on my rental income ? I have been a resident here for four and half years.
Thanks in advance.
A: Hi, your NET rental income will be taxed in Australia. You will pay tax on the net income at non-resident tax rates. Please note that you may actually end up with a tax loss due to things like mortgage interest and potential capital works deductions as well as rates, strata, repairs and all the rest of the normal rental property expenses. If the property generates a loss then there is no tax to pay
Also bear in mind that in NZ you will ALSO be required to pay tax on this rental income. BUT remember that you will get a tax credit in NZ for the tax you paid in AUS on the rental income. there is a special double taxation agreement between the two countries
so, in summary: its complicated!!!
Get a good CA or CPA to handle your tax in AUS and then get another one to sort it out in NZ as well.
good luck with it!!
bc
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Q: I opened a of shore bank account with GHA Commercial bank and my fiancee deposited €600,000.00 in to my account. When I tried to transfer the money to my commonwealth bank account in Australia I was told I need to get a tax clearance verification code the GHANA bank wants me to pay them $17,800.00 for the tax code before they will release the funds. I don't have that money. What can I do?
A: can you clarify this a bit?
I presume that the bank in Ghana is the one telling you to pay $17,800 in order to release funds?? is this a "tax" like a withholding tax or a "fee" for the bank to act as your agent in this matter?? In either case it seems you arent getting your money until someone comes up with $17800.....

It would seem to me that there is a lot of money sitting in the Ghana bank account in question. Would it not be feasible for the bank to take what it needs to fulfill whatever withholding obligations are there and transfer the balance??? Have I missed something here????

good luck
bc
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Q: I work in the city and it takes about 1 hour and 20 minutes to get to work… painful. My property would be around $1.3m and the mortgage is about $900k and I’m thinking of selling my home and buying in the eastern suburbs or inner west. A couple of friends have suggested renting first for 6 months before buying and selling. The travel is not getting any easier and I’m hoping to get some advice on other options in relation to bridging finance or other things to consider?
A: do a budget on the cashflow for the time you are renting: I cant imagine renting close to the city is going to be cheap, and it needs to be funded from somewhere......also talk to your bank about what happens to your owner-occupied mortgage should you decide to move out and rent the house out to subsidise the cost of the rent.
And do a budget on the bridging finance: on a worse case scenario where you cant sell your home for 9 or 12 months.......then decide if bridging finance is cheap:)
good luck!!!
bc
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Q: We are a building company charging a client labour and materials that were putchased on their behalf. My question is when we invoice for material reimbursement, do we use the price we paid to our supplier with Gst, and add snother 10% Gst, or the net price of the material, then gst which is the same amt as we paid?
Im hearing lots of opinions on this but need to know what the law actually is on this?
Thanks,
Rayna
A: Hi Rayna

if you do not wish to mark up the purchase of materials, then you should invoice YOUR NET cost, exclusive of GST:

eg
purchase $110
GST $10
NET COST $100

invoice to client: $100
GST on sale $10
total invoice to client $110

hope this helps
brendan
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Q: I would like to start a small online business I would like to know if this will affect our family benifit , a simple example.
I purchase a product for say $10 I then sell the item for $20 including free delivery which cost me $8 so I have only made $2 profit but I recieved $20 .
when I declare earned income to centerlink is it $20 or $2 ?
Regards
Paul
A: Hi Paul, purchases of stock are deductible, so the PURCHASE is a tax deduction.

Closing stock COULD be assesable income, however I am guessing that you would probably be able to ignore movements in trading stock for tax purposes, and hence you income would be $0. You have another question on this subject to which I have posted a longer answer.......

Best thing you can do is invest some time and money in research on trading stock and income tax.....and get some advice from a good local accounting type
regards
brendan
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Q: I sold 1 product for $4
I have made $2 profit but I want to purchase more products with the $2 profit and original $4 = $6
Because I reinvested the money in the business do I have to declare any income to centerlink because in theory I now have $0 ?
Thank you in advance
Paul
A: If you spend the $2 on more stock to sell then your profit is $0.

ie:
purch $4
purch $2
total purch = $6

sales = $6

sales - puch = $0

of course you then have the issue of closing stock, which is income for accounting purposes. So in ACCOUNTING terms you have made a profit of $2.

But for TAX purposes you can elect to ignore changes in closing stock in many cases....so for TAX purposes you have $0 assessable income.

ta-daaaaa!

cheers
BC
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Q: Hi
I am thinking of buying a large motor home which was owned by a GST registered company I was told if I have a GST registered business I would be able to recoup the GST amount from the purchase price?
Kind Regards GT
A: If you are registered for GST and the asset is used in the enterprise, then you could claim the GST on the purchase.
BUT
the ATO takes a very dim view of people who register for GST to make bogus claims for large capital items to be used for private or domestic purposes. And the likelihood of someone from the ATO writing you a 'please explain" letter after you claim $15,000 back on your new motor home is very high.

There are not many businesses that use a motor home as part of the day to day running of the business:)

so the moral of the story is yes you can but be prepared for the resulting review by the ATO.

cheers
BC
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Q: A client has recently purchased a new business. Should the preliminary expenses incurred such as legal fees, site valuation, stocktaking fees, web/domain and business registration fees be expensed in the P&L or should I capitalise those items in the balance sheet because they relate to setting up a new business?

Thanks,
A: Most Small Business Entities will be entitled to an immediate writeoff for startup costs. So for ACCOUNTING purposes the costs are "capital" in nature and hence not deductible, for TAX purposes, the costs are written off at a special rate of 100%.
the inconsistency between accounting and tax rules can be a minefield. If you need further information try this link:

https://www.ato.gov.au/individuals/tax-return/2017/in-detail/publications/guide-to-depreciating-assets-2017/?page=19#Certain_start_up_expenses_immediately_deductible

cheers
BC
question
Q: I have a couple of teenage children who are being invited to various social gatherings, many of which I suspect involve alcohol. I am not so naive to assume that nothing is going to happen, but what is the legal obligation of the parent host of a teenage birthday party where kids turn up with alcohol? I presume that the parents might be placing themselves in a bad position without knowing what the legal implications are....
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Q: in a trial balance for end of year, do I show the credit card opening balance or the amount spent on the credit card for the year?
A: Hi Richard, the trial balance at a specified date needs to report whatever credit card balance is on that date.

for example, lets say you are reporting for the 2016-17 financial year, and there is $500 owing on the credit card on 1/7/16.

then after all the trading income and expenses for the year are taken up, the credit card has $875 owing on 30 June 2017,

the trial balance will show a credit balance of $875 as at 30 June 2017

the trial balance will show a credit balance of $500 as at 1 July 2016.

but it will never show how much you spent on the credit card: it just reports the amount owing on a particular date.

hope this helps
bc
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Q: Hi, is there any 'pay per hour' accountancy services ie. need a 20 minute call to ask questions and pay a fee for that...without having to buy a years worth of services or the like?
A: Yes mate there are......your initial problem is that if your queries have to do with your earlier R&D claim and consolidation matters, there is a mountain of background to go through in order for someone to give you any advice......and if you are looking for an hourly rate for one-off advice in this specialised area, you are going to pay a premium for it.......unless the advice is from someone who is going to be your adviser over a long-term period....
regards
BC
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Q: Hi, I am completing my R&D form, and it asks if "Is the R&D entity that is registering the head company of a consolidated or multiple entry consolidated (MEC) group?" - During the year we created a wholley owned 'sub' company for trading, and some R&D expenses were spent through that entity. Is it simple just to assign those expenses to the head company or do we need to merge for tax purposes?
A: HiJames,

for the R&D entity to claim the sub R&D expenses, you would have to consolidate for tax. This is a highly technical area, and I strongly advise you track yourself down a good R&D consultant and accountant with experience in tax consolidation and R&D claims.
cheers
BC
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Q: My wife and I bought out place 3.5 years ago for 370K. A recent valuation placed it at 650k today. The increase being a bit of luck and some renovations etc. We are considering moving, and deciding whether we hold onto our current place and rent it out or sell it. Could service it and the bank is willing to lend it. What I'm worried about is capital gains tax. Given that we'd probably be planning to sell in 2-3 years, and the appreciation will probably slow, is it better to sell now?
A: Hi again,
If you choose NOT to apply the main residence exemption, the gain is NOT calculated based on a sworn valuation. This is a common misconception, and is not how the legislation works.
what needs to happen is that the gain is apportioned between the number of " non-exempt days" "exempt days"

In essence the gain is apportioned across the whole ownership period evenly.

here is a link to the legislation if you are really super keen to immerse yourself:
http://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/itaa1997240/s118.185.html

Alternatively get yourself to a good CA/CPA and get them to explain how it all works:)



cheers
BC
answered
Q: I bought a $2,500 laptop for a University Thesis in 2014/15 financial year. I've realised that I've actually been using it to work from home from 2015 to present (2017). My questions are:

a) I didn't initially purchase it for work use. Because I have been, is this claimable?
b) If it claimable, I've never claimed this expense previously, can I claim depreciation for the past years as well?
A: Hey thanks for the feedback Stephen, that is interesting about the apparrant automatic amendments using myGov (I presume)???
If this is actually the case then its a massive time-saver for you!!!
regards
Brendan
answered
Q: My wife and I bought out place 3.5 years ago for 370K. A recent valuation placed it at 650k today. The increase being a bit of luck and some renovations etc. We are considering moving, and deciding whether we hold onto our current place and rent it out or sell it. Could service it and the bank is willing to lend it. What I'm worried about is capital gains tax. Given that we'd probably be planning to sell in 2-3 years, and the appreciation will probably slow, is it better to sell now?
A: the primary residence exemption on selling your home can actually be applied for up to 6 years AFTER you move out. so what you could do is move out, rent the home for a couple of years, sell the house, and claim a FULL CGT exepmtion.
Its a very cool concession.....the reason it is there is because people sometimes move due to work or other reasons, and sometimes it can take ages to sell a house....so the concession is there so that you dont accidentally get stung for CGT on your home due to reasons out of your control.
SO this provides an opportunity to take advantage of these rules.....

BUT!!!! And here is where it can hurt you later on:.....

you can only EVER apply the primary residence exemption to ONE property. so if you move out of house #1, and rent it out, and purchase house #2, then the exemption only applies to one of those properties.....never both at the same time.

I would strongly recommend you talk to a good accountant about this so you know what the potential savings and costs are going to be.

cheers

BC
answered
Q: I would like to do some work through an online work marketplace like freelancer.com or Fiverr. Do I need to get an ABN to do this kind of work? I already have a full-time job, this would be more of a side-hustle. Thanks,

Amy
A: Withholding tax for contractors without an ABN is 45%, so it really can make a big difference to your take home income. You also need to consider that as a contractor you are probably not going to be receiving super contributions, and potentially wont be covered for workers compensation either.

https://abr.gov.au/For-Business,-Super-funds---Charities/ABN-explained/

this is where you need to go if you are going to apply yourself. its not very difficult, or you may wish to talk to your accountant about this and get them to do this for you.

good luck
BC
answered
Q: If I purchase an investment property through my SMSF and then on reaching retirement, I choose to wind up the superfund and transfer the house to myself for Owner Occupation, do I need to pay Stamp Duty on the transfer to myself, or is this exempt.?
A: Hi guys,

You cannot transfer assets into your super fund. The exemptions are publicly traded shares and units and COMMERCIAL real property.

You can transfer a property out of a SMSF to a member(s), which will trigger capital gains tax for the fund unless they fund is 100% in pension mode and stamp duty for the purchaser. There are no concessions for a SMSF, sorry.

In most cases people take into account the CGT savings on the property and are happy to take the hit in stamp duty.

And who knows? perhaps one of these days the states WILL ACTUALLY abolish all those state taxes that were supposed to go when GST came into being, like they were supposed to do 15 years ago!!!!!!!
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Q: How to I pay my own taxes and super?
A: If you are self-employed, you lodge a tax return and the ATO will send you a notice of assessment and this has your payment details and options on it. Paying super is a case of joining a super fund and the fund will be able to advise you how to make super contributions.
If you have a job, your employer will take tax out of your wages and pay it to the ATO for you. Then when you lodge your tax return the ATO will tell you if there is an amount to be refunded or whether you owe them more. And your employer must pay your super for you.

hope this helps
Brendan
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Q: Hi
My daughter is a second year apprentice earning $10 per hour. She has just started doing a second job working in a bar and they are not taking any tax out of her $600 approx a month she earns from this.
Will she get a tax bill ??
A: probably. $10/hr translates to something like $20k. The tax free threshold is $18200, so everything over that will attract some income tax. She will need to consider what things she can claim against her two jobs, so I would recommend a chat with a CA or CPA to give her some tips on what she needs to keep an eye on.
as a rule of thumb her best bet is to keep receipts and document things if she thinks she might be able to claim something. If she has the receipt and the accountant says yes, then great.
If she has no receipts then no one can claim anything
good luck
Brendan
answered
Q: I am thinking of leaving a full time role to set up my own business but concerned about the initial cashflow. Everyone is telling me to go for it so I’d like to ask about finance and can I extend my home loan before starting the business. The unit is probably worth 500k and the home loan is $210k. Is this a good way to get started as I already have a number of clients in the waiting?
A: Hello Jacqui,
As the other guys have already pointed out, there are plenty of things to consider when setting out on your business venture. The first thing to consider is what do I do if this falls flat on its face? It is an undeniable fact that most businesses fail in the first 12 months. And the thing that kills them in almost every case is cashflow.....or more accurately a LACK of cashflow.
You need the help of a qualified and experienced CA or CPA to help you get your business off the ground and operating efficiently. You need to consider all sorts of things, like
should I set up a company, a partnership, sole trader or trust?
what are my cash commitments over the next 12 months?
How am I going to generate the cash?
How am I going to keep track of business income and expenditure?
What capital investments do I need to make? DO I need to lease hire or buy equipment? What about a business premises?
Do I run my business from home? Are there tax considerations if I run my business from home (tip:YES!!!).
Do I need to employ staff?
What risks to I need to consider?
What insurances do I need?
What are my tax and reporting obligations?
DO I need to register for GST/PAYG W/ etc??
How do I report this stuff to the ATO?
Who is my competition?
How do I make myself known to my clients?
the list never ends......

If you have an accountant you trust, spend the time (and money) to find out what you need to know before you take this leap. Remember the 5 "P"s: Prior Planning Prevents P$%^ss Poor Performance. the money and time you invest before committing to a strategy will pay for itself tenfold!!
good luck!!!
Brendan
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Q: I bought a property a few years ago through my self managed super fund, however at the time I was just short of the funds required to purchase so made up the difference and ended up with a small percentage ownership in the property. The superfund now has enough funds to buy my share out but I was told that I would have to sell the property to get my funds back which I don’t want to do. Why can’t I just sell the percentage of the property to the superfund so I can get back the money I put in?
A: because a SMSF cannot acquire residential real property from a member: it is one of the things that the ATO has put in place to prevent people setting up SMSF in order to purchase the family home.
It is a massive inconvenience for someone like you, and I get the frustration. Unfortunately the super fund can acquire residential property from ANYONE except you, and you can sell your property yo ANYONE but the super fund. Puts you in a bit of a pickle Carol.
I presume that your accountant would have explained this to you when you set the thing up in the first place, however you may have not picked up on this little issue with all the other things going on when you buy property.
sorry I cannot be of more assistance Carol. Have a chat with your accountant, maybe he/she will be able to help.

regards
Brendan
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Q: Hi there, I have been doing events for charity for some time now, but I do it through voluntary non paid. I have enjoyed it tremendously and have given me a great deal of experience in the field. I hav been thinking about running my own business but Im not quiet sure which way to go. Wheather keep it my own company business and part proceeds to charity or run it as non profit organisation. I have been juggling it a bit for some time on what desicion to take. What are the advantages and disadvantages of each, also what lisences will I be requiring for each business. Im very new at this. Can u help ? Thanks
A: Hi Maria,

the best thing you can do here is find yourself a CA or CPA nearby with experience in the area, and get some face to face time with them. It will cost you some money, however the potential for you to miss a key element and cost yourself thousands is very high. I would say that a couple of hundred today for advice on how to set your venture up properly has the potential to save you many thousands over time. hopefully someone on this forum will be closer to you then I am:)

good luck
BC
answered
Q: Hi there,
I bought a piece of land last year and want to sell it now. Is there any way to reduce CGT? does it make any difference if i invest the profit in a new property?
regrards
A: If you sell the land less than 12 months after purchase you wont be entitled to the 50% general exemption. Also remember the key date is CONTRACT date, not SETTLEMENT date!!
you could possibly make super contributions to reduce your income and save some tax
You are not able to roll the gain into another investment, this concession is only available for small business.
and everything Andrew has said is also spot on: there are LOTS of possibilities, and hence LOTS of questions that need to be answered.
good luck
BC
answered
Q: We incurred a loss on a property investment within our smsf and would like to ask if it was possible to transfer the loss into a new smsf or our personal tax?
A: Hi Stephanie,
Glenn is spot on: the losses are stuck in the existing fund and you cannot transfer tax losses.

I think you probably have a whole lot of stuff going on in the background that you need to consider: for example, why are you talking about setting up a new fund?? It might be that there are other members of the existing fund and you want to separate your affairs from those people....

in any event it seems that you need to get specific advice that cant be had via an online forum like this: best thing you can do is find a GOOD QUALIFIED and EXPERIENCED local CPA or CA to help you out. Once you have sorted out your structure then you can make decisions about what you should be investing in....

good luck with this.
regards
Brendan
answered
Q: We have a family business and would like to know if there are any restrictions for 3 or 4 of the family to set up a smsf together?
A: Hello angela,

the short version of this is no.

the long version is it depends. There are lots of good reasons to set up a SMSF. Equally there are lots of really good reasons not to. They are complicated. They are expensive. you are taking on all the responsibility of managing things for your retirement. They take up time that you may not have to "self manage".

there are big restrictions on all sorts of things, and the first of them is getting the right advice to start with: whoever you get to assist you with getting this advice is probably going to be the same person to help you set it up and also the same person who helps with your accounting and audit obligations. Potentially adds up to a pretty significant sum, so you want to ensure that the person providing all these services is appropriately qualified and experienced to do so, and is not motivated by making a quick buck out of you but has your long term interest in mind.

Find a CPA or Chartered Accountant locally who has experience in the field. You should not try to do this via email, it will involve plenty of face to face time with your adviser. Talk to friends about who to use. And ask questions about their qualifications and experience before you commit to anything. hopefully someone on this forum will be your go-to person, or can recommend someone local to you.

good luck
Brendan
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Q: My mother’s fortnightly pension was around $360 p.f but with the recent changes to the government asset tests it is now $260 p.f. She owns her home and is worried about the lost pension and have to live off the funds in the bank. She has about $400k in the account and we would like to ask if there are other options for someone who is quite conservative to get a better return?
A: Hi Tami,
your mothers best bet is a financial planner who isnt going to try to shove something down her neck that she neither wants nor understands. And that is the problem for her: finding one that she is going to trust enough to take the advice, and who has the time and ability to explain what her options are in English that she can understand. There is unfortunately no shortage of operators out there who dazzle their clients with jargon but cannot explain what is going on to people who may have little or no experience in finance.

You also need to get comfortable with the idea that at some point your mother is going to be paying for the service, either by way of an up front fee, or via commissions paid to the adviser by the funds receiving the investment cash; or both. And whilst the old saying "you get what you pay for" is true, you need to shop around, ask questions and challenge the planner to ensure you are getting the best possible bang for your buck. Ask them:
1: what are their qualifications.
2: find out what their experience is.


There are a lot of things that she does need to consider in addition to her age pension.....and it would be absolutely worth her while to get a plan together that encompasses her long term goals as well as maximising what she can access via Centrelink today. Good luck with it, I am sure there are plenty of financial planning types on this platform who are more than capable of providing a great service.
regards
Brendan
answered
Q: Hi,
If I sell my own principal place of residence after I have renovated it under one year, Will I have to pay capital gains tax? I know if it's your principal place of residence everyone has told me No, however, I don't trust this because it would be 10 mths later and a capital gain of around $60,000 and I don't trust that the ATO will not add tax to that?

Appreciate your feedback
A: Hi Jule,

if the property was your principal place of residence then it doesnt matter what you did to it, the gain is exempt from capital gains tax.

Your only headache is if you earned business or rental income from the property: eg rented out a room or ran a business from home. then you have an issue where a portion of the property is not exempt, so you would get assessed on a portion of the gain.

hope this helps
brendan
answered
Q: I bought a $2,500 laptop for a University Thesis in 2014/15 financial year. I've realised that I've actually been using it to work from home from 2015 to present (2017). My questions are:

a) I didn't initially purchase it for work use. Because I have been, is this claimable?
b) If it claimable, I've never claimed this expense previously, can I claim depreciation for the past years as well?
A: the use of the laptop determines whether or not its deductible, so the short answer is yes you can.....or at least a portion of the usage based on how much you use it for work v how much for private.

You cant claim last years depreciation in this years return, but you can request an amendment to your prior year return.......you probably have a short period of review....which is ATO-ese for you can only go back 2 years unless you have complex tax issues. this means if you are going to amend returns you need to get moving!

Also the ATO depreciation rate on a laptop is 66%.....so the depreciation would have been something like this:
2014-15 $1650
2015-16 $561
2016-17 $191

you can only claim a PORTION of this, so the question is: is it worth the pain? how much of your usage is work related??

If your income was under $80k then the actual tax benefit to you would be possibly not enough to justify paying a tax agent to do an amendment for you......however you can lodge your own. have a look at this:

https://www.ato.gov.au/Individuals/Tax-return/2015/Supporting-information/Amendment-requests-2015/

https://www.ato.gov.au/General/Correct-a-mistake-or-amend-a-return/Correct-(amend)-an-income-tax-return/Time-limits-on-income-tax-amendments/

have fun with it
Brendan