Tag Archive: Federal Government

Post-Election Results Overview

Posted on May 20, 2019
by Tammy Tieu

In the lead up to the federal election over the last few months, it was predicted that by this time we would have a new Labor government. Labor promised that by being elected into office, they would bring in a plethora of changes that would greatly shift the strategies of many businesses and individuals.

But in this day and age, whilst we have more knowledge to substantiate our predictions, it can still come as a shock when things don’t go as we expect. The 2019 federal election was no different as it resulted in a Liberal Coalition win despite the opinion polls.

While change can be good, the best thing to come out of the federal election is the removal of speculation and uncertainty. With the uncertainty, there was no ability to implement strategies right away, but now businesses and individuals alike can continue to plan ahead and implement strategies as before.

Will the Scott Morrison government stick to the pre-election proposed budget changes or shake things up? BLG Manager, Luke Bland, will go into detail on this topic next week, but for now here are links to our Federal Budget write-ups that you can refer to:

To ensure you have your planning set up to account for the Federal Budget updates our team can help you prior to the end of financial year. Get in touch with BLG Business Advisers online or by calling 02 4229 2211.

 

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Key Government Changes to assist Primary Producers

Posted on February 25, 2019
by Sarah Cross
The severe drought conditions affecting Australia have lead to various measures being introduced by the State and Federal Governments to assist those affected in the primary production industry.

From grants to subsidies, upfront tax deductions to discounted registrations and rates – if you are a primary producer, chances are there is a concession that you or your business is eligible to access.

This blog will touch on some of the concessions currently available to primary producers that we commonly see being accessed by our clients.

Firstly… What is a Primary Producer?

A primary producer is an individual, partnership, trust or company that operates a business that undertakes:

  • Plant or animal cultivation (or both)
  • Fishing or pearling (or both)
  • Tree farming or felling (or both)

We provide services for several primary production clients at BLG, the most common being dairy farmers.

Accelerated Depreciation

A primary producer is able to claim an immediate tax deduction for certain primary production assets including:

  • Facilities used to conserve or convey water (e.g. tanks, dams, bores, pumps, irrigation channels);
  • Fencing assets, including alterations and extensions (however does not include stockyards, pens or portable fences); and
  • Fodder storage assets (e.g. silos, grain storage sheds, hay sheds, grain bins).

Tax Averaging for Primary Producers

In the primary production industry, some years are good and some are bad. The tax averaging system was introduced to allow for those fluctuations by averaging your income over a maximum five year period to ensure that you don’t pay more tax over time than taxpayers on comparable, but steady, incomes.

NSW State Government Measures

The Emergency Drought Relief Package was announced on 30 July 2018 to support farmers impacted by the drought conditions. Some of the measures introduced include:

  • Drought Assistance Fund – one-off $50,000 interest free loan for eligible expenses. The loan term is seven years with no repayments required in the first two years.
  • Regional Investment Commission (RIC) Low interest loans – up to $2 million for those within the eligible area map defined by the RIC. Loan is interest free for five years, with a loan term of 10 years and is required to be refinanced at the end of the term with a commercial lender. Current interest rate is 3.58%
  • Drought Transport Subsidy – covering 50% of the full cost of transporting fodder, stock or water – maximum $5 per km and 1,500km per trip. Eligible for costs incurred from 1 January 2018 – 30 June 2019 capped at $40,000 per farm over the 18 month period.
  • Emergency Water Infrastructure Rebate Scheme – rebate of 25% of the cost of purchase, delivery and if applicable, labour costs for installation of water infrastructure for animal welfare needs – maximum of $25,000 per farm – eligible purchases from 1 July 2018 to 30 June 2021.
  • Local Land Services rates for 2019 have been waived.
  • New registrations and renewal fees for eligible Class 1 agricultural vehicles have been waived from 30 July 2018.
  • Heavy vehicle registration costs waived from 1 July 2018 up to 30 June 2020.

Federal Government Measures

  • Farm household allowance (FHA) for a maximum of a four year period
  • Supplement lump sum payments of up to $12,000 per family/household if receiving the FHA – households can receive up to two lump sum payments if eligible.
  • $20,000 Instant asset write-off extended to 30 June 2019
  • Australian Taxation Office offering:
    • tailored payment plans with interest-free periods
    • more time to pay tax
    • waiving penalties or interest that may be incurred during drought

Accessing the above measures can help with your cash flow, and maximising the available concessions is an important consideration if you are in the primary production industry. As with all concessions, you need to meet certain eligibility criteria.

Governments introduce new measures and change current measures quite often, especially leading up to elections. To ensure you are up-to-date with the current measures and their criteria, get in touch with our team at BLG Business Advisers online or by calling (02) 4229 2211.

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TBAR Requirements & Deadlines Explained

Posted on September 16, 2018
by Michael Lamont

The Federal Government has introduced new reporting obligations on Self Managed Superannuation Funds (SMSFs) designed to monitor a superfund member’s Transfer Balance Account (TBA), which was discussed in Luke Bland’s blog ‘New SMSF Reporting Requirements’.

Under these new reporting obligations SMSFs are required to report to the Australian Taxation Office (ATO) specific events that impact a member’s TBA. These events are reported to the ATO using the Transfer Balance Account Report (TBAR) form.

Below we go into more detail about some of the common types of events that are required to be reported as well as the required timeframe.

Common reporting events

Common events that may impact a member’s TBA, which requires an SMSF to report to the ATO include:

  • Superannuation income streams in existence just before 1 July 2017 that are continued to be paid on or after 1 July 2017
  • The commencement of a new superannuation income stream, where the member is in retirement phase
  • The commutation (roll-back) of a superannuation income stream
  • The cessation of a superannuation income stream
  • ATO issued commutation authority notices
  • Limited recourse borrowing arrangement payments that affect the value of an interest supporting a superannuation income stream
  • Structured settlement contributions received on or after 1 July 2017 (e.g. contributing the proceeds of certain insurance payouts)

Reporting deadlines

SMSF members, who had a superannuation income stream (pension) in existence just before 1 July 2017 which continued to be paid on or after 1 July 2017, were required to report the balance of the pension by 1 July 2018.

All events occurring on or after 1 July 2017 are required to be reported either quarterly or annually, depending on the SMSF member’s total superannuation balance.

If a SMSF had at least one member with a total superannuation balance in excess of $1 million as at 30 June 2017, the SMSF is required to report any events 28 days after the end of the quarter.  The first quarterly due date for TBARs is 28 October 2018.

For SMSFs that had no members with a total superannuation balance in excess of $1 million as at 30 June 2017, the SMSF is required to report any events by the due date of the SMSFs return.

What does this practically mean?

SMSFs will need to work closely with their business advisers to ensure that all relevant events are reported to the ATO in a timely manner. Planning will become more important so that income streams can be commenced and reported in the appropriate quarter to maximise the tax savings that come with commencing a pension.

If you are drawing a pension from your superfund and wish to draw more than the minimum pension amounts required by law, it may be beneficial to commute an amount from your pension account and withdraw from your accumulation account instead. There may be adverse tax implications if you simply increase your pension payments. This should be discussed with your business adviser before any lump sums are withdrawn from your superfund.

Get in touch with our team at BLG Business Advisers to discuss your requirements either online or by calling (02) 4229 2211.

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