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Your personal Superannuation Comparison Tool for 2022/23

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    Are you ready to take control?

    Follow these easy steps and compare your superannuation fund’s performance against other funds to make the right choice.

    This will be possible if you have a MySuper fund as the ATO’s Your Super comparison tool as it can help you compare different MySuper products and choose a superannuation fund that meets your needs.

    What is a MySuper fund?

    A MySuper fund is a low-cost superannuation product and is usually the default account for people who don’t choose their own superannuation fund when they start a new job.

    Many large Australian Prudential Regulation Authority (APRA) regulated superannuation funds (ie, retail, industry and corporate funds) can all offer MySuper accounts to members in accumulation (ie, non-retirement) phase. MySuper funds are simple accounts that generally have the following basic features:

    ■Simple investment strategy options – depending on the fund, you will be put into either a single diversified investment option or a lifecycle investment option based on your age.

    ■Lower fees – you don’t pay for unnecessary features that you don’t need.

    ■Default insurance options – you can easily opt out of the insurance arrangements if you wish.

    ■Easy to compare – you can easily compare MySuper funds based on investment performance, cost and insurance.

    YourSuper comparison tool

    You can find out about and compare MySuper products by using:

    ■Your superannuation fund’s product disclosure statement (PDS) for the MySuper product, or

    ■The ATO’s YourSuper comparison tool. If you can’t find your current account type within the MySuper products list, your account may not be a MySuper product. The best way to confirm whether your account is a MySuper product is by contacting your superannuation fund directly.

    What does the YourSuper comparison tool do?

    The YourSuper comparison tool can compare MySuper products based on only a few key differences.In particular, the YourSuper comparison tool:

    ■Displays a table of MySuper products ranked by fees and net returns (updated quarterly).

    ■Allows you to select and compare in more detail up to four MySuper products at a time.

    ■Links you to a superannuation fund’s website when you select a MySuper product from the table.

    ■Can show your current superannuation accounts alongside other MySuper products (if you access the personalised version through myGov)

    ■Provides links to help you consolidate your superannuation accounts.

    APRA assesses the annual performance of each MySuper product. As such, the investment performance column will provide one of the following results for each fund:

    ■Performing – the product has met or exceeded the performance test benchmark

    ■Underperforming – the product has not met the performance test benchmark

    ■Not assessed – the product had less than 5 years of performance history and has not been rated by APRA.

    Using the YourSuper comparison tool

    To access a personalised version of the tool which allows you to view and compare your existing MySuper products:

    ■Log in to ATO online services through myGov, and

    ■Go to the Super drop-down menu and select Information, then select Your Super comparison.

    You can also access a non-personalised version of theYourSuper comparison tool without logging into myGov by:

    ■Visiting ato.gov.au and search for “Your Super comparison tool”

    ■Start searching for your own MySuper product name.

    If you have any questions regarding your Super obligations – de Kretser is here for you.

    Need more information?
    If you need help comparing your superannuation fund or need assistance understanding how the comparison information relates to your circumstances, we are here to help, so please contact us for further information.

    We look forward to working with you.

    T: +61 3 9550 6900

    E:admin@dekretser.com.au

    This is a de Kretser Client Information Newsletter keeping you on top of the issues, news and changes you need to
    know.

    To stay informed and connected, follow us on LinkedIn and Facebook


    Superannuation simplified for your business – in 2022/23

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    Here at de Kretser – our team have compiled a simple guide to help your business with it’s Super responsibilities in the new Financial year.

    You will have heard by now that business Superannuation contribution in Australia has increased to 10.5%  

    The Superannuation Guarantee (SG) rate will rise from 10% to 10.5% on 1 July 2022 and will then steadily increase by 0.5% each year until it reaches 12% on 1 July 2025 – the following numbers tell the story –

    PeriodSG rate (%)
    1 July 2015 – 30 June 20169.5%
    1 July 2016 – 30 June 20179.5%
    1 July 2017 – 30 June 20189.5%
    1 July 2018 – 30 June 20199.5%
    1 July 2019 – 30 June 20209.5%
    1 July 2020 – 30 June 20219.5%
    1 July 2021 – 30 June 202210%
    1 July 2022 – 30 June 202310.5%
    1 July 2023 – 30 June 202411%
    1 July 2024 – 30 June 202511.5%
    1 July 2025 onwards12%

    The increase to the superannuation guarantee (SG) rate begins from 1 July 2022 and will see more employees (and certain contractors) entitled to additional SG contributions on their pay.

    If you have employees, what this will mean depends on your employment agreements.

    If the employment agreement states the employee is paid on a ‘total remuneration’ basis (base plus SG and any other allowances), their take home pay might be reduced by 0.5%. That is, a greater percentage of their total remuneration will be directed to their superannuation fund.

    For employees paid a rate plus superannuation, then their take home pay will remain the same and the 0.5% increase will be added to their SG payments.

    But what happens when income earned before 30 June is paid after 30 June 2022 – will employees be entitled to the higher SG rate of 10.5%?

    SG based on when an employee is paid

    On 1 July 2022, the SG rate increased from 10% to 10.5%. In some cases, an employee’s pay period will cross over between June and July when the rate changes.

    However, the percentage employers are required to apply is determined based on when the employee is paid, not when the income is earned.

    The rate of 10.5% will need to be applied for all salary and wages that are paid on and after 1 July 2022, even if some or all of the pay period it relates to is before 1 July 2022.

    This means if the pay period ends on or before 30 June, but the pay date falls on or after 1 July, the 10.5% SG rate applies on those salary and wages. The date of the salary and wage payment determines the rate of SG payable, regardless of when the work was performed.

    EXAMPLE

    Nicholas is an employee of ABC Pty Ltd.

    If Nicholas performed work:

    • In June (or partly in June and partly in July) but he was paid in July, the SG rate is 10.5% on his entire payment and contributions totalling 10.5% of his ordinary time earnings for the September 2022 quarter must be made to his superannuation fund by 28 October.
    • In July but was paid in advance (before 1 July), the SG rate is 10% and contributions totalling 10% of
      his ordinary time earnings for the June 2022 quarter must be made to his superannuation fund by 28 July.

    Please also note the following changes to the SG Threshold

    $450 super guarantee threshold removed
    From 1 July 2022, the $450 threshold test will be removed and all employees aged 18 or over will need to be paid superannuation guarantee regardless of how much they earn.
    It is important to ensure that your payroll system accommodates this change so you do not inadvertently underpay superannuation.
    For employees under the age of 18, super guarantee is only paid if the employee works more than 30 hours per week.

    If you have any questions regarding your Super obligations – de Kretser is here for you.

    Need more information?
    There are many factors to consider regarding the information shown above. Please contact us if you would like more information, we are happy to explain and action your requirements.

    We look forward to working with you.

    T: +61 3 9550 6900

    E:admin@dekretser.com.au

    This is a de Kretser Client Information Newsletter keeping you on top of the issues, news and changes you need to
    know.

    To stay informed and connected, follow us on LinkedIn and Facebook


    Prepare Now with de Kretser – EOFY 2021/22

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    As we collectively near the end of one of the most challenging financial years to date, the de Kretser team are here to assist in every aspect of your business.

    We are gearing up and readying strategies we can implement together to reduce your taxable business, and personal, income for the 2021/22 period. 

    Guiding you to your Greatest Return.

    We have created a list pertinent to your individual and business situations – please consider each of them for maximum gain at the end of your financial year:

    PRE-PAYING EXPENSESFor businesses with less than $50m turnover prepaid expenses (not exceeding 12 months) are deductible under  the prepayment rules, Please start thinking about prepaying rent, subscriptions, insurance, interest etc should cashflow permit
    STOCK ON HANDIf you have a business that holds stock, ensure you complete a stock take at 30 June and keep a record of the market, cost and replacement values or assets which are obsolete.
    ASSET ACQUISITIONS AND DEPRECIATIONA business with less than $50m turnover is entitled to claim an outright deduction for any plant and equipment you purchase (regardless of cost) from 6 October 2020 to 30 June 2023. If you plan on purchasing any assets please ensure they are purchased and installed prior to June 30, 2022, to obtain the tax deduction for the 2022 financial year. *Subject to the Motor vehicle depreciation limit of $60,733
    COMPANY TAX RATE DIVIDENDS Provided the company is a trading entity, any dividends paid throughout the 2022 financial year will be paid out with a 25% franking credit. Any dividends paid out during the 2023 financial year will also be paid out with a 25% franking credit.

    It is time now to also consider the following –

    • SUPER – It is time to ensure you pay all your employee’s JUN-22 quarter superannuation before June 30, 2022 to ensure a tax deduction for the  2021/22 tax year
    • REVIEWING THOSE THAT OWE –  It is time to review your list of customers and determine whether any bad debt can be written off prior to June 30, 2022 in order to claim a bad debt deduction
    • CRYPTOCURRENCY – The ATO is data matching all cryptocurrency transactions. Please ensure you keep accurate complete records and can provide details of cost, quantities and dates of acquisitions and sales
    • WORKING FROM HOME – If you work from home you are able to claim an expense for your hours worked, please keep record of this for the shortcut method. If you want to utilise the actual method – please keep receipts for Telephone, Internet, Gas, Electricity, Stationery etc.

    Begin the process now with de Kretser –

    We have many tools for you to ready your EOFY, to explore please click here.

    Once you have gathered all required documentation, please contact our team to book an appointment to discuss your requirements, online or Face to face. Please contact us regarding any questions you may have.

    T: +61 3 9550 6900 E:admin@dekretser.com.au

    This is a de Kretser Client Information Newsletter keeping you on top of the issues, news and changes you need to
    know.

    To stay informed and connected, follow us on LinkedIn and Facebook


    SMSF trustees or directors: What is Required from the ATO?

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    All members of a self-managed super fund (SMSF) must be individual trustees or directors of the fund’s corporate trustee. Anyone 18 years old or over can be a trustee or director of a super fund as long as they’re not under a legal disability (such as mental incapacity) or a disqualified person.

    The Responsibilities

    Whether you’re a trustee or director of a corporate trustee, you are responsible for running the fund and making decisions that affect the retirement interests of each fund member, including yourself. As a trustee or director, you must:

    • Act honestly in all matters concerning the fund
    • Act in the best interests of all fund members when you make decisions
    • Manage the fund separately from your own superannuation affairs
    • Know, understand and meet your responsibilities and obligations
    • Ensure that the SMSF complies with the laws that apply to it

    All trustees and directors are equally responsible for managing the fund and making decisions. You are responsible for decisions made by other trustees, even if you’re not actively involved in making the decision. You can appoint other people to help you or provide services to your fund (for example, an accountant, administrator, tax agent or financial planner). However, the ultimate responsibility and accountability for the SMSF’s actions lie with you, as trustee or director. As an individual trustee or director of a corporate trustee, you may be personally liable to pay an administrative penalty if certain laws relating to SMSFs are not followed.

    Other members of the fund can take action against you if you don’t follow the terms of the trust deed. Any fund member who suffers loss or damage because of a breach of any trustee duties may sue any person involved in the breach.

    Other eligibility factors should not be overlooked. To knowingly act as a trustee, a trustee director or an office holder of a corporate trustee (such as secretary), while being a disqualified person, is an offence. To be sure you are not a disqualified person you need to be able to answer “no” to all of the following questions.

     
    1. Have you ever been convicted of a dishonest offence, in any state, territory or a foreign country?

    Offences of a dishonest conduct are things such as fraud, theft, illegal activity or dealings. These convictions are for offences that occurred at any time, including convictions that have been “spent” and those that the court has not recorded, due to age or being a first offender.

    2. Have you ever been issued with a civil penalty order?

    Civil penalty orders are imposed when an individual contravenes a civil penalty provision (this can be an order to pay a fine or serve jail time).

    3. Are you currently bankrupt or insolvent under administration?

    You cannot be a trustee of an SMSF while you are an undischarged bankrupt, and you cannot remain a trustee if you become bankrupt or insolvent after you are appointed.

    4. Have you been previously disqualified by the ATO or APRA?

    The Commissioner of Taxation, as the SMSF regulator, can disqualify a trustee, which is permanent and is not just specific to the SMSF you were a trustee of at the time. The Federal Court can make an order to disqualify a trustee of an APRA fund. This is permanent and this disqualification does not allow you to operate an SMSF

    To stay informed and connected, please follow us on LinkedIn

    This is a de Kretser Client Information Newsletter keeping you on top of the issues, news and changes you need to
    know. Should you require further information on any of the topics covered, please contact us via the details below.
    T: +61 3 9550 6900 E:admin@dekretser.com.au

    Federal Budget 2021-2022: Relief for many taxpayers and businesses

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    Rather, the Government has decided to put its foot on the accelerator with the hope that the growth in the economy over a long period of time will help to pay down the debt that has been central to theGovernment’s response to COVID-19. On personal taxation, in an expected announcement, the Government confirmed that it will extend the low and middle income tax offset (LMITO) beyond 2020-21 so that taxpayers will continue to receive the tax offset (between $255 and $1,080) in the 2021-22 income year.




    In summary, the major tax-related measures announced in the Budget included:

    ■ LMITO retained for 2021-22 – the Government will retain the low and middle income tax offset for the 2021-22 income year. The LMITO provides a reduction in tax of up to $1,080.

    ■ Loss carry-back extended – the loss years in respect of which an eligible company (aggregated annual turnover of up to $5 billion) can currently carry back a tax loss (2019-20, 2020-21 and 2021-22) will be extended to include the 2022-23 income year.

    ■ ATO debt recovery – the AAT will be given the power to pause or modify ATO debt recovery action in relation to disputed debts of small businesses.

    ■ Employee share schemes – the Government will remove the cessation of employment as a taxing point for the tax-deferred employee share schemes.

    ■Loss carry-back extended – the loss years in respect of which an eligible company (aggregated annual turnover of up to $5 billion) can currently carry back a tax loss (2019-20, 2020-21 and 2021-22) will be extended to include the 2022-23 income year.

    ■ Personal tax rates – no changes were made to personal tax rates, the Government having already brought forward the Stage 2 tax rates to 1 July 2020. The Stage 3 personal income tax cuts remain unchanged and will commence in 2024-25 as already legislated.

    ■ Temporary full expensing extended – the Government will extend the 2020-21 temporary full expensing measures for 12 months until 30 June 2023. This will allow eligible businesses with aggregated annual turnover or total income of less than $5 billion to deduct the full cost of eligible depreciable assets of any value, acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023.

    ■ Employee share schemes – the Government will remove the cessation of employment as a taxing point for the tax-deferred employee share schemes.

    ■ Individual residency test reformed – the Government will replace the existing tests for the tax residency of individuals with a primary «bright line» test under which a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident.



    SUPERANNUATION AND RELATED MEASURES

    The key superannuation and related measures announced in the Budget include:

    ■ Super Guarantee $450 per month threshold – to be removed from 1 July 2022.

    ■ Downsizer contributions – eligibility age to be lowered from 65 to 60.

    ■ First Home Super Scheme – to be extended for withdrawals up to $50,000, plus some technical changes for tax and administration errors in applications.

    ■ Victims of domestic violence – the Government will not proceed with its previous proposal to extend the early release of super to victims of family and domestic violence.

    ■ Pension Loans Scheme – will be expanded to allow
    access up to two lump sums in any 12-month period
    (up to a total of 50% of the maximum annual Age
    Pension); together with a Government guarantee that
    “no negative equity” will apply

    ■ Superannuation contributions work test – to be repealed from 1 July 2022 for voluntary non con-cessional and salary sacrificed contributions for those under age 75. However, the work test will still apply for personal deductible contributions by those aged 67-74.

    ■ SMSF residency rules – to be relaxed by extending the central management and control test safe harbour from two to five years, and removing the active member test for both SMSFs and small APRA funds.

    ■ Conversions of legacy income streams – individuals will be permitted to exit certain legacy retirement income stream products (excluding flexipensions or lifetime products in APRA-funds or public sector schemes), together with any associate reserves, for a two-year period. Any commuted reserves will not be counted towards an individual’s concessional contribution cap. Instead, they will be taxed as an assessable contribution for the fund.

    Temporary full expensing: extended to 30 June 2023

    The Government will extend the temporary full expensing measure until 30 June 2023. It was otherwise due to finish on 30 June 2022.

    Other than the extended date, all other elements of temporary full expensing will remain unchanged. The measure allows eligible businesses to deduct the full cost of eligible depreciating assets, as well as the full amount of the second element of cost.

    A business qualifies for temporary full expensing if it is a small business (annual aggregated turnover under $10 million) or has an annual aggregated turnover under $5 billion.

    Loss carry-back extended by one year

    Annual aggregated turnover is generally worked out on the same basis as for small businesses, except the threshold is $5 billion instead of $10 million. Assets must be acquired from 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023.

    Under the temporary, COVID driven, restoration of the loss carry back provisions announced in the 2020- 21 Budget, an eligible company (aggregated annual turnover of up to $5 billion) could carry back a tax loss for the 2019-20, 2020-21 or 2021-22 income years to offset tax paid in the 2018-19 or later income years.

    The Government will extend the eligible tax loss years to include the 2022-23 income year. Tax refunds resulting from loss carry back will be available to companies when they lodge their 2020-21, 2021-22 and now 2022-23 tax returns.

    This will help increase cash flow for businesses in future years and support companies that were profitable and paying tax but find themselves in a loss position as a result of the COVID-19 pandemic. Temporary loss carry-back also complements the temporary full expensing measure by allowing more companies to take advantage of expensing, while it is available.

    Intangible assets depreciation: option to self-assess effective life

    The Budget confirmed that the income tax law will be amended to allow taxpayers to self-assess the effective
    life of certain intangible assets (such as intellectual property and in-house software), rather than being required to use the effective life currently prescribed. This amendment will apply to patents, registered designs, copyrights and in-house software for tax purposes

    Taxpayers will be able to bring deductions forward if they self-assess the assets as having a shorter effective life to the statutory life. The self-assessment of effective lives will apply to eligible assets acquired following the completion of temporary full expensing (introduced in the 2020-21 Budget — ie to assets acquired from 1 July 2023).

    The amendments, as they affect companies incorporated offshore, will have effect from the first income year after the date the enabling legislation receives assent, but taxpayers will have the option of applying the new law from 15 March 2017 (the date on which the ATO withdrew an earlier ruling).It not known whether the same arrangements will apply for the start date for trusts and corporate limited partnerships should they be brought under the new rules.

    Extended consultation on corporate tax residency rules

    In the 2020-21 Budget, the Government announced that it would amend the law to provide that a company that is incorporated offshore will be treated as an Australian tax resident if it has a “significant economic connection to Australia”. This test will be satisfied w here both the company’s core commercial activities are undertaken in Australia and its central management and control is in Australia.

    The Government has now announced that it will consult on broadening this amendment to trusts and corporate limited partnerships. The Government will seek industry’s views as part of the consultation on the original corporate residency amendment.

    Small businesses to be able to pause disputed ATO debt recovery

    The Government will introduce legislation to allow small businesses to pause or modify ATO debt recovery action where the debt is being disputed in the AAT. Specifically, the changes will allow the Small Business Taxation Division of the AAT to pause or modify any ATO debt recovery actions – such as garnishee notices and the recovery of GIC or related penalties – until the underlying dispute is resolved by the AAT.

    This measure is intended to provide an “avenue” for small businesses to ensure they are not required to start paying a disputed debt until the matter has been determined by the AAT.

    Small business entities (including individuals carrying on a business) with an aggregated turnover of less than $10 million per year will be eligible to use the option. The AAT will be required to “have regard to the integrity of the tax system” in deciding whether to pause or modify the ATO’s debt recovery actions.

    To stay informed and connected, please follow us on LinkedIn


    This is a de Kretser Client Information Newsletter keeping you on top of the issues, news and changes you need to
    know. Should you require further information on any of the topics covered, please contact us via the details below.
    T: +61 3 9550 6900 E: admin@dekretser.com.au

    Tax tips for a smooth EOFY

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    The financial year is almost over, but there are still effective strategies you may be able to put in place. The aim is to make sure you pay no more tax than you have to for the 2020-21 year and maximise any refunds you may be entitled to. This is still the case, if not more so, in the on-going COVID-19 environment.

    While the best strategies are adopted as early as possible in a financial year and not at the end, it’s worth remembering proper tax planning is more than just sourcing bigger and better deductions. The best tips involve assessing your current circumstances and planning your associated income and deductions from income year to income year. Not all of the following tips will suit everyone’s specific circumstances, but they should provide a list of possibilities that may get you thinking along the right track for your tax planning.

    Pre-Pay Investment Loan Interest

    If you have some spare cash, then see if you can negotiate with your finance provider to pay interest on borrowings upfront for the investment property or margin loan on shares (or other loan types) and make that deduction available this year. Most taxpayers can claim a deduction for up to 12 months ahead. But make sure your lender has allocated funds secured against your property correctly, as a tax deduction is generally only allowed against the finance costs incurred for the purpose of earning assessable income from investments. Be aware that a deduction may not be available on funds you redraw from a loan of this type that is put o other purposes. Also, a component of the National Rental Affordability Scheme payment is not assessable income and therefore the deduction on these properties may need to be apportioned.

    Investment Property

    Expenses stemming from your rental property can be claimed in full or in part, so, if possible, it can be helpful to bring forward any expenses that can be undertaken before June 30 and claim them in the current financial year. If you know that your investment property needs some repairs, some gutter clean up or some tree lopping, for example, see if you can bring the maintenance and (deductible) payments into the 2020-21 year. It should also be noted that deductible rental property expenses remain deductible even if the property is not rented as long as it is genuinely available for rent (which is relevant in the current COVID-19 environment).

    Temporary Full Expensing

    The temporary full expensing regime is now operable for depreciating assets acquired after 6 October 2020 and before 30 June 2022. The full cost of acquiring depreciating assets is deductible in the year of income in which the asset is first held, provided the item is first used, or installed ready for use, by 30 June 2022.

    The cost of improvements made to a depreciating asset is also deductible in the year of income the improvements are made (no later than 30 June 2022). In contrast to the instant asset write-off rules, there is no upper limit on the amount that can be fully deducted in respect of any asset. This may enable some effective tax planning between the 2021 and 2022 tax years where there are assets you have been looking to acquire or improve

    The ATO’s Clarification

    In October 2020, the ATO updated its website clarifying the objective andsupportable evidence needed to support real property valuations. The ATO listed the following examples of various items it considered may be useful:

    • Independent appraisals from real estate agents (ie, kerb side valuations)
    • Sales contract (provided the purchase is recent and no events have occurred to the property that could materially impact its value since the purchase, such as perhaps a global pandemic or natural disaster)
    • Recent sales of comparable property in the area
    • Rates notices — provided they are consistent with other evidence on valuation
    • Net income yield of commercial properties. (The ATO notes, however, that this on its own is not sufficient and is only appropriate where tenants are unrelated.)

    Use the CGT Rule to your Advantage

    If you have made and crystallised any capital gain from your investments this financial year (which will be added to your assessable income), think about selling any investments on which you have made a loss before 30 June. Doing so means the gains you made on your successful investments can be offset against the losses from the less successful ones, reducing your overall taxable income.

    And while there may be many opportunities to realise capital losses in the current circumstances, you should be aware that the deliberate realisation of capital losses for the purpose of reducing capital gains in some circumstances may trigger a response from the ATO. Keep in mind that for CGT purposes a capital gain generally occurs on the date you sign a contract, not when you settle on a property purchase or share transaction. When you are making a large capital gain toward the end of an income year, knowing which financial year the gain will be attributed to can be a handy tax planning advantage. Of course, tread carefully and don’t let mere tax drive your investment decisions – but check to determine whether this strategy will suit your circumstances, and whether you risk attracting the attention of the ATO in any way.

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    This is a de Kretser Client Information Newsletter keeping you on top of the issues, news and changes you need to know. Should you require further information on any of the topics covered, please contact us via the details below.
    T: +61 3 9550 6900 E: admin@dekretser.com.au