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  Considered Value Newsletter

        Issue 140 - Brentnalls SA Newsletter February 2021

 
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Inside This Issue

What Happens to Your Super When You Die?
The Things That Matter
Tips to Upscale Your Business
Regional Investment Corporation AgriStarter Loan
Brentnalls Health | Practice Snapshot Assessment

Software Corner:
MYOb AccountRight 2020.4 Release

Client News
Brentnalls SA News
Brentnalls SA for the month of February we are supporting:
Guide Dogs & Operation Flinders
Meet Claudia Binetti
Quote

"We cannot solve problems by using the same kind of
thinking we used when we created them."


~ Albert Einstein ~

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What Happens to Your Super When You Die?

We spend our working lives trying to increase our superannuation balance which helps us save for our retirement and enjoy the tax concessions superannuation provides. Still, we often forget to consider what happens to our superannuation when we die. More specifically, the tax consequences of this.

There are two main issues to consider when talking about tax consequences for superannuation on death, they are:

  • Non-dependants receiving superannuation proceeds, and
  • The split between the taxed, untaxed and tax free elements of the superannuation fund.

If a non-dependant receives superannuation proceeds, the taxed element of those proceeds is taxed at 15% and the untaxed element of those proceeds is taxed at 30%. Non-dependants include your adult children who are no longer financially dependent on you.

Your superannuation balance generally includes two components, taxed/untaxed and tax-free. The taxed element includes amounts you have claimed as a tax deduction (including employer contributions) when contributing into the superannuation fund and the fund's earnings on these whilst the fund is in accumulation phase. The tax-free component includes contributions which you have not claimed as a tax deduction. The untaxed element includes deductible contributions where, due to the specific rules around that fund, a fund has not paid any tax on the contributions or earnings. Tax-free is the component of contributions, and earnings on these, which was contributed without a tax deduction being claimed.

When the last member of a superannuation fund dies the pension superannuation interest continues in pension phase until the benefits are paid out. This legislation has applied since 1 July 2012.  Previous to this legislation a pension was considered to cease on the death of the member. This had tax consequences for the fund when a member passed away such as reduced exempt current pension income and tax on capital gains incurred after death.

These issues are highlighted in the following basic example:

Mum and dad have their self-managed superannuation fund (as detailed in the table below).


The family farm was transferred into the fund and contributions have been invested into listed securities. Dad has subsequently passed away, leaving his balance to mum. What happens to mum's superannuation when she dies, assuming the proceeds are to go to their non-dependent adult children?

In this scenario there would be a capital gain of $750,000 and tax to pay of $75,000 (assuming that assets are held for greater that 12 months). If Mum has the maximum amount in pension phase at the time of her death ($1.6million) then based on a $2million total fund balance, 80% of the capital gain is not taxable to the fund as it is part of the exempt pension income amount. Tax payable on the capital gain will be $15,000 (20% of the $75,000)

When the taxed element of the fund is paid to the children there will be tax payable of $75,000 (15% of $500,000). Total tax payable in this scenario would be $90,000. Can this tax be avoided? Potentially yes, or at least in part. Strategies such as withdrawal and re-contributions, power of attorney and testamentary trusts can all help lower the tax payable.

If you would like to know more about these strategies for your superannuation, please feel free to contact our office for an appointment.

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The Things That Matter


 

Are you reflecting on your business, especially since COVID-19 and assessing the things that matter?

You might think one of these stakeholders matter the most to your business, be it:

  • Your Customers
  • Your Team
  • Your Suppliers
  • Your Financiers

Importantly, they all matter. Managing your relationships with them is a crucial driver of your business' success when aligned with your business' long-term vision.

Driving Your Business' Success

Your Customers (current, past, and future) ~ are your business' revenue and margin lifeline. Make an effort to understand their businesses, find out what you can do for them, and how can you do it better. Make sure they know your service offering and what makes it unique. Encourage a service-based philosophy. All these simple principles will improve sales. Finally, ensure the business culture reflects the purpose and core values that your business stands by.

Your Team (including management) ~ are the face of your business. Your team influences your business' reputation through its behaviours, service, knowledge, stability and care factor. Customers can generally get their requirements elsewhere, but it's you and your teams' commitment that can make all the difference.

Your Suppliers ~ if you supply products, ensure you always have stock on hand to meet demand. Warehousing arrangements, distribution and timing, price and rebate deals are critical enablers to your business outcomes. Relationships with your suppliers (be they of raw materials, finished goods or the consumables and infrastructure used in your business) are essential business success elements. 

Your Financiers ~ This can be the bank, investors, you and your supplier trade arrangements. These all provide the capital for which your business needs to operate. Ensure you understand the terms of any agreements and have processes in place to manage them. This will allow you to focus on your customers and team to drive business outcomes. 

How Do You Nurture the Relationships?

Nurturing these relationships is critical to the success of your business. Failure to do so can negatively impact any of your stakeholders which can, ultimately, affect your business's performance.

Finding the balance between relationships and time commitments is never easy, and there is no right or wrong answer. However, by regularly implementing the following is a significant first step to nurturing these relationships:

  • Review your customer service processes - identify areas that you can improve on, implement periodical customer surveys and benchmark against other similar businesses.
  • Work on ensuring people in your business respect the business purpose and core values (culture).
  • Consider the relationships between stakeholders and the drivers of your business. Build a plan that gives you ownership of how you will engage, strengthen and build on these connections, ensuring you are moving towards the right balance.

Nurturing these relationships can seem like hard work. The process around nurturing involves purposefully engaging your target audience when required. Try offering regular, relevant information that supports their needs. Maintain a sense of care with every interaction, which helps fulfil the relationships, experiences, respect and memories that maximise lifetime value. That said, the customer experience is up to you and how you choose to deliver that experience.

Building your employees' relationships with stakeholders will also develop their capabilities and help leverage your business. Always ensure you take a personal and regular interest in the engagements, topics, issues and outcomes. Time management plays a big part, and Brentnalls SA offer a great time management tool that will assist you where necessary.

Above all, be clear on your financial and non-financial vision for your business, set strategies and have plans in place to achieve that vision. 

Understand The Key Drivers of Your Business

Understand your business (i.e. its purpose) and the key metrics which drives performance. These could be sales, margin, staff costs, productivity, stock terms, debtor and creditor days, bank covenants. Once understood, these need to be regularly tracked, communicated and managed.

Provide leadership to your team and set the tone. Your team is there to complement your skills, experience and multiply what you can't achieve alone. Still, they need to operate within an appropriate and accountable framework. Always invest in training and development to build on their capabilities.

Lastly, be clear on what defines success for you and your business and ensure you communicate this to the team. Keeping a focus and finding the right balance on the things that matter will help you drive future success in your business.

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Tips to Upscale Your Business

Set realistic and actionable goals

Businesses should set realistic and actionable small goals which they can work towards, rather than broad goals which provide no direction. Setting broad and unrealistic goals is demotivating and makes any progress made seem insignificant. Every person in the business should be given a target to meet over a reasonable timeline which contributes towards achieving a larger goal. 

Establishing standardised and automated processes

Small businesses can make the mistake of 'doing things as they come' but this means that as business grows, adjusting to high scale tasks is difficult. To avoid this, businesses should standardise all processes of work. Any individual placed into a role should be able to follow standardised procedure and yield a product which is of similar quality to the previous one. Investing money into automation tools is worthwhile for this procedure. This can include automating management of social media, email, and customer relationships. Each of these will contribute to creating structures which support growth.

  Business team sitting at a table with their hands in the middle to show team spirit with a focus on business objectives
Identify competitive strengths and weaknesses

Recognising the strengths and weaknesses of one's business is essential. Strengths will allow businesses to focus on unique qualities they possess which give them a competitive advantage. Weaknesses will reveal which areas require growth so that changes can be made before upscaling takes place.

Network

Businesses should continue to develop relationships with service providers, sales channel partners, suppliers and customers. Keeping an open mind about partnerships or potential collaborations could open up different avenues of business growth.

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Regional Investment Corporation AgriStarter Loan

 

The recently released AgriStarter Loan, which has been backed by the Federal Government, has been introduced to support the next generation of Australian Farmers. It does this by providing loans for first time and next generation farmers. It is designed to assist either:

  • Buying an existing farm business, 
  • Undertaking succession arrangements, or
  • Establishing a new farm business.
The AgriStarter loan  offers two kinds of loans, first farmer loans and succession loans as follows:
  • You can apply for a first farmer loan if you are seeking to purchase, 
  • establish or develop a farm business in which you hold the sole or a controlling interest. 
You can apply for a succession loan if your farm business is undertaking or has undertaken succession planning.

Loan Terms

Loans are available up to $2 million over (10) years with interest-only repayments for the first (5) years followed by (5) years' principal and interest repayments. Any residual balance on the loan will need to be refinanced with another provider.

Eligibility

To be eligible, you must meet the criteria set out via the linked document.

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Brentnalls Health recently launched a product:

Practice Snapshot Assessment

Most practices work in isolation having little insight into how other practices operate. Brentnalls Health have the privilege and opportunity through our work to see how many different practices operate. Through this experience, we have gained an understanding of the key elements that distinguish a High Performing Practice.

A Practice Snapshot Assessment involves a practice self-assessment. You will receive guidance and assessment analysis from industry-leading business advisors from our health team available to you throughout the assessment.

Find your practices' future potential as easily as making your morning coffee here.

  BE a high performing practice, computer with a doctors stethoscope coming out of the screen with how healthy is your practice.
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  Brentnalls SA Software Corner






MYOB Capture Logo

MYOB | AccountRight 2020.4 Release

The latest release for MYOB AccountRight is one of the most significant and most noteworthy to date. Users have been given a totally new way to work with AccountRight and updates and enhancements to reporting, online invoice payments and more.

Access AccountRight file via your web browser

Users of AccountRight Live 2020.4 and onwards now have the option of accessing their files through a web browser. Users no longer are confined to using their desktop or laptops. Any online device, including mobile and tablet devices, now has the power to perform the most common tasks.

This added layer of flexibility means you can send an invoice on site, match bank transactions on the train or check your business performance in the coffee queue.

You can access this either by clicking Open in web browser once signed into your file in the desktop version or by going to app.myob.com and logging in with your MYOB credentials. Please note you will need a current subscription to access your file through a web browser.

Online invoice payments

This new release allows you to now pass along the 1.8% card transaction fee to your customers. The surcharge will be added to the invoice total and settled to your account after payment. Surcharging is only applicable to invoices paid with credit or debit cards (AMEX, Mastercard and Visa). BPAY fees cannot be passed on.

When funds from online invoice payments are settled into your account, AccountRight can automatically create a bank deposit transaction and clear the corresponding transactions from undeposited funds. This will save considerable time previously spent allocating the settlement amount to the individual payments.

Reporting and other improvements

AccountRight 2020.4 has removed date range restrictions on more key reports. This allows you to run reports across unlimited periods, that would have previously required you to restore a backup of that financial year.

MYOB has also mentioned that many crashes and bugs have been ironed out in this release making 2020.4 its most reliable release.

If you would like any further information on how the above might benefit you, please contact your Brentnalls SA team member.


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Client News

Image of the book 'Maralinga - The Struggle for Return of the Lands    
Maralinga-The Struggle for Return of the Lands is written by Garry Hiskey and was recently Published through Wakefield Press.

Congratulations Garry who wrote this book as his own personal account, a lawyer's perspective, of the time he assisted a group of traditional Aboriginal people to gain an inalienable freehold title to some 76,000 square kilometers of land in the outback of South Australia.
Congratulations to the Doctors of Midwest Health on the recent sale of their medical practice.

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Brentnalls SA News

We welcome Ann-Marie Jolly (Senior), Lachlan Kirchner (Junior), Nicole Besanko (Junior), Shauna Kuhnert (Junior), Con Mantis (Junior), and

James Brakmanis (Junior), to Brentnalls SA.

We also welcomed Daniel West who was with us on a four week work experience program.

Congratulations to Jane Richards (Client Co-ordinator) who celebrated 10 years at Brentnalls SA, congratulations.

Congratulations to our recent graduates Mariah Vagionas (Bachelor of Commerce-Accounting), University of Adelaide and Edwina Roeger (Bachelor of Commerce – Accounting), University of South Australia.

Congratulations to the following team members for their recent promotions (top left across and bottom left across).

Image of Julian Titaro, Sarah Mitchell, Wade Crane, Mariah Vagionas and Courtney Duffy. 

  • Julian Titaro from Intermediate to Senior
  • Sarah Mitchell from Intermediate to Senior
  • Wade Crane from Senior to Supervisor
  • Mariah Vagionas from Junior to Intermediate
  • Courtney Duffy from Junior to Intermediate


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Brentnalls SA for the month of December we are supporting:

Guide Dogs

Guide Dogs Australia Logo
 

 

"We know that no two journeys are the same.

So we work side-by-side with clients and their families to make their way through the road ahead, with services tailored to suit them.

We support people of all ages, with different levels of vision impairment, to achieve freedom and independence.

Our life-changing Autism Assistance Dog Program also improves comfort, safety and confidence for children living with autism and their families."

https://sant.guidedogs.com.au/ 

Operation Flinders Logo    Last year as a firm we completed a virtual trek around Australia. Our team of runners, walkers and cyclists did a fantastic job keeping fit and active will supporting Operation Flinders. We came together recently for a morning tea to celebrate the achievement and raised $1,000.

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Meet Claudia Binetti

Claudia Binetti, Accountant at Brentnalls SA
 

I joined Brentnalls SA in March 2018 as a Junior Accountant whilst studying a Bachelor of Commerce (Accounting) at the University of Adelaide.

Currently, I am undertaking my studies to become a Chartered Accountant.
 
Working at Brentnalls SA over the past three years has been a gratifying experience that has allowed me to develop professionally and personally.

Outside of work, I enjoy spending time with friends and family.

~TOP

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Our Services

Our services go beyond compliance to find out more about your goals, your priorities and establish plans to grow and protect your future wealth. We will take the time to listen, ensuring we meet your goals, as well as guide you so you have a better understanding of the financial decisions being made. Our services include:

Accounting & Tax
Business Advisory
Wealth Creation & Preservation

Our People

Our Partners & Principals want to be part of your team that drives your future success, that provides you with solutions to your challengers. More importantly, who listens and knows exactly where you are going and what you want to achieve financially. 

"Helping you achieve your dreams, is our passion, and our strength is in our dedicated professional team."

 

News & Resources

Our priority is to ensure your kept up-to-date on trends, industry legislations, accounting and tax updates, business advisory information, superannuation and much, much, more. All of which, may have an impact on you and your business. Our resources provide additional supporting information in the following areas: 

Newsletters
Fact Sheets
Checklists
News Articles
COVID-19 - Information Sheets
COVID-19 - Brentnalls SA Response

Our Location

255 Port Road
HINDMARSH SA 5007

PO Box 338
Welland SA 5007 

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P: (08) 8241 8444
F: (08) 8241 8488

E: [email protected]

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