The Australian Government has now passed legislation to change allowable deductions relating to plant and equipment depreciation and travel expenses as first announced as part of the May 2017 Federal Budget.
What does this mean to Property Investors?
In a nut shell, the amendments deny property investors from claiming income tax deductions for travel expenses and the decline in value of 'previously used' depreciating assets (such as plant and equipment) within residential investment properties. The depreciation changes will affect investors who have purchased second-hand residential properties after 7.30pm on the 9 May 2017 through limiting the depreciation the investor can claim on existing plant and equipment assets. The travel deduction changes affect all residential property owners from 1 July 2017.
Who will not be affected by the depreciation deduction changes?
Owners of brand new dwellings, regardless of when purchased.
Owners of previously owned properties that were substantially renovated prior to purchase.
All property investors can still claim plant and equipment depreciation for assets they have purchased themselves.
Owners of non-residential/commercial properties.
Owners that are carrying on a business of property rental.
Superannuation funds (except SMSFs) that hold residential property.
Public unit trusts and managed investment trusts.
Corporate tax entities.
Residential property investors who exchanged contracts prior to 7.30pm on the 9 May 2017. However, a property owner will not be able to claim depreciation on pre-existing plant and equipment assets within properties which have been lived in as a primary place of residence and the owner decides to rent the property out after the 1 July 2017.
If you have any questions about your situation, please contact us to discuss further.
Single Touch Payroll - Streamlined business reporting is coming!
Single Touch Payroll (STP) is a Government initiative designed to streamline payroll data reporting. The Australian Taxation Office (ATO) will have access to real-time transactional data with a view to sharing payroll data with other agencies such as Centrelink in the future.
STP sets new standards for payroll reporting and compliance with an expectation it will change the way the ATO engages with taxpayers.
What will change?
Employers will be required to update their current payroll system to a version that is STP – enabled.
Salary and wages, allowances, deductions, ordinary time earnings, superannuation information and Pay-As-You-Go (PAYG) withholding information will all be reported and available in real time, when the payroll is processed by the employer.
Future employees will be able to complete the TFN Declarations and Super Choice forms online.
Payments such as salaries and wages and amounts withheld that are reported via the STP will be pre-filled by the ATO on their BAS.
Large withholders will no longer be required to report PAYG withholding on their activity statements.
You may not be required to provide your employees with a payment summary at the end of a financial year. The ATO will make that information available to employees through their myGov account.
What hasn't changed?
Your payroll cycle will not change.
Your payment due date for PAYG withholding and super contributions will not change, however you can choose to pay earlier.
When does it start?
Commencement date is set for the 1 July 2018, based on employee numbers. If you have 20 or more employees, you will commence from this date but the first year will be a transition year with no penalties.
Businesses with less than 19 employees will be expected to commence from 1 July 2019. However, you may decide to join voluntarily before this date which will allow you more time to ensure compliance.
IMPORTANT TO NOTE: To establish whether your business employs 20 or more employees, you will need to complete a head count on 1 April 2018.
Who to count:
Full time employees
Part time employees
Casual employees who are on your payroll on 1 April 2018 and worked anytime during March
Employees based overseas
Any employee absent or on leave (paid or unpaid)
DO NOT INCLUDE: any employees who ceased working prior 1 April 2018, casual employees who did not work in March, independent contractors, staff provided by a third party labour hire organisation, company directors, officeholders or religious practitioners.
If you have any questions regarding STP, please contact our office.
A new capital gains tax (CGT) discount of 60% will come into effect from 1 January 2018 for investors in eligible affordable housing.
Affordable housing is provided to low to moderate income tenants at a discount below the private rental market rate.
In order to access the higher discount, instead of the standard 50% for individuals holding an asset for more than 12 months, the investors must hold the asset for at least 3 years and it must be certified and managed by a community housing provider.
The tax incentive is also available through managed investment trusts.
You're traveling for work or pleasure, you see a sign "Free Wi-Fi" – why wouldn't you connect?
You may be at the library or local café again you see "Free Wi-Fi" - why wouldn't you connect?
Wi-Fi hotspots are much more widespread these days, making it extremely convenient. The advantages of getting stuff done on the run allows us to manage those "To Do Lists" we all have but….
BEWARE, data traffic can be easily intercepted.
Cyber criminals have been known to set up hotspots in order to steal banking credentials, account passwords and other valuable information. We suggest implementing some good internet habits when out and about to protect your valuable or sensitive information.
Remember these simple good internet habits tips:
Avoid connecting to hotspots you don't know or trust.
Turn off File Sharing and Airdrop options.
Turn Wi-Fi off when not in use.
Avoid working online with sensitive data when using public Wi-Fi. Consider this time spent to scroll your favourite newsfeeds, read that saved newsletter or play your next move on Words With Friends!
If you need to conduct a sensitive transaction, make sure you use https:// instead of https:// at the start of the address and make sure there is a locked padlock or key in the browser website address bar.
This month we are supporting Kickstart for Kids, a not-for-profit charity which helps disadvantaged school children in South Australia by providing breakfast and lunch programs and a mentoring program.
Today KickStart for Kids supports over 300 South Australian Schools, providing around 40,000 breakfasts and 10,000 lunches per week.
This Christmas, instead of sending Christmas gifts, we've made a life changing donation to Make-A-Wish.
I started working at Brentnalls SA a year and a half ago and I am thoroughly enjoying my time here in my role as an Admin Assistant.
I enjoy the busy work environment and am continually learning something new.
Outside of work, I enjoy playing and watching any sort of sport, spending time with friends and family, and getting to the beach when the weather is hot. I am a big Crows Supporter and was lucky enough to drive to Melbourne this year for the AFL Grand Final – although the result was undesirable!
The information provided in this newsletter does not constitute advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances. Brentnalls is not a partnership or a joint venture. Instead, the business of Brentnalls SA is independently owned and operated and it is an independent member of the Brentnalls Affiliation of Accounting Firms. Individual member firms do not accept responsibility or liability for the actions or inactions of any other individual member firm.
Services that assist in increasing profitability, build value, and protect your wealth.