Helping Younger Generations

A good man we know is 45 years old. He is a professional, married with two teenage kids. Once or twice a week he visits his mum, a widow who lives alone in a nearby suburb. Without fail, every time he visits, he goes to the fridge and helps himself to anything there that takes his fancy. And neither he nor his mum think this is in any way unusual.…  Read more

Government delivers “election friendly” 2019/20 Federal Budget

A surplus election budget is the news coming out of the 2019-20 Federal Budget. With superannuation left largely untouched, the Government focused on further personal income tax cuts. However, three key announcements include providing more flexibility for individuals to contribute at ages 65 and 66, the ability to choose their preferred exempt income tax method and increased funding for electronic super rollovers are welcomed. This Federal Budget will provide much…  Read more

Budgetary Policy: It’s all part of the plan

In 2019, the first Tuesday in April is financial planning’s night of nights. (Usually, the big night comes in May, but this year it has been changed as a one-off). That is the night when the Federal Government hands down its proposed budget for the coming financial year and beyond. This year, we have a first-time federal treasurer handing down the budget. That said, much of the heavy lifting of…  Read more

Charitable donations may be tax deductible – here’s what you need to know

Donating to charity not only supports the vital work of an organisation but also has positive side-effects when claiming tax deductions. Donating to charity not only supports the vital work of an organisation or group, but it can have positive side-effects when it comes to claiming tax deductions. To be eligible for a tax credit, you need to make sure that your contributions meet certain conditions, and that you’re making…  Read more

Recent tax changes for Australian small businesses

Are you across the recent tax changes for small business? Two recent updates may be relevant for your small business. Talk to us about your small business tax. We keep up with tax news, so you don’t have to! The Australian Taxation Office (ATO) has recently announced some updates and changes which could be relevant for your small business. Changes to the instant asset write-off threshold The $20,000 instant asset…  Read more

More on the 2018 Budget & what it means for you…

The Federal Budget was handed down last Tuesday, May 8, 2018. While the measures announced in the budget are yet to be passed by Parliament, we can generally assume that most of the announcements will become reality. From an individual perspective – especially if you do not grow illegal tobacco or participate in the black economy – this year’s budget was actually a bit of a nonevent. For those clients…  Read more

The Federal Budget – Canberra’s Academy Awards Night!

Ah. The second Tuesday in May. The most exciting day of the year for all accountants! This year’s federal budget contains mostly good news for our clients – as you would expect given that an election is anticipated before the next budget comes around. This is not the time for Treasurers to make life harder. ScoMo wants to be everyone’s best mate! Next week, we will provide a detailed analysis…  Read more

Positive gearing into property

Positive gearing is the opposite of negative gearing. It is jargon for borrowing to buy an investment where the expected assessable income is more than the expected deductible interest cost (and other costs), with a resultant increase in assessable income. In the context of housing prices, this means buying on a rental yield of at least 5% or more. This is a very unusual phenomenon. Most residential property will not…  Read more

Negative Gearing and Shares

Negative gearing occurs where the income from a ‘geared’ asset is less than the interest and other holding costs, creating a loss while the asset is held. A ‘geared’ asset is one that is at least partly financed using debt. Investors can usually offset the loss from negative gearing against other income for tax purposes. This creates a tax benefit, in the form of less tax being paid than otherwise,…  Read more

Repaying deductible debt? Here’s a better idea.

Here’s something you might not expect to hear a financial planner say: maybe repaying your debt is the last thing you should do. We should explain. Not all debt is equal. Financial planners divide debt into two broad types: deductible and non-deductible. As these names suggest, deductible debt lets you claim a tax deduction for the interest that you pay. Non-deductible debt does not. This means that you have to pay the…  Read more

Opportunity Cost

We will start this blog with a question. When you spend money, how often do you ask yourself what you won’t be buying as a result of your spend? After all, you can only spend a dollar once. Whenever you buy something, that means there is something else that you cannot buy. Financial advisers call this the ‘opportunity cost.’ Instead of expressing the price of something in simple dollar terms, the price…  Read more

What makes debt deductible?

Financial planners divide debt into two types: deductible debt and non-deductible debt. Deductible debt lets the borrower claim a tax deduction for the interest incurred on the debt. Non-deductible debt does not. Whether interest is deductible or not can have a massive impact on how expensive that debt actually is. When interest is not deductible, you have to pay tax before you pay the interest. You can see this with…  Read more

Not all debts are the same. Even if the interest rate is.

Not all debt is the same. Even if the interest rate is. One of the main differentiators between debt is whether or not you can claim a deduction for the interest. If interest is not deductible, then the interest rate paid is much higher than you might think. When interest is not deductible, you have to pay tax before you pay the interest. You can see this with an example:…  Read more

Tax & the Sharing Economy

The traditional business model has changed significantly in a very short period of time with many now operating in the online or “sharing” economy.  Whilst the channel for the delivery of outcomes may have changed, it does not necessarily mean an alteration to the tax implications of the business. If your business has moved into the sharing economy, make sure you avoid the big stick of the tax office.  The…  Read more

Helping your kids and grandkids into a property

It is well known that property affordability, particularly for the younger generation (25 – 34 year olds) has become a major challenge.  This topic has increasingly become a part of conversation with clients over the past twelve months so figured it would be a good idea to share some of our thoughts and possible solutions on this issue. Read more  Read more

Property market update

Property is a hot topic so for all of you that keenly follow the property market, whether as an investor, developer or simply as an owner-occupier, here is our update on the property market.   Read more  Read more

Making the most of negative gearing

Negative gearing is a common strategy adopted by persons wishing to build their long term wealth in a tax effective manner.  In recent years, negative gearing has become more prevalent through the advent of record low interest rates and in some parts of the country, increasing values of property. Whilst it can be an excellent wealth building tool, it does have restrictions and risks if not used properly.  In our…  Read more

Positive Gearing. What is it, how does it happen and do you want it anyway

You have probably heard the term ‘positive gearing.’ It is a similar concept to negative gearing, which is certainly in the news a lot these days. We use the term ‘gearing’ whenever debt is used to fully or partly finance an investment. If you have $90,000 of your own and borrow $10,000 to buy an investment asset worth $100,000, you have ‘geared’ the investment. Similarly, if you borrow $100,000 to…  Read more

Tax Matters – August 2017

 Topics covered in this issue: CGT strategies for your holiday home ATO targeting work-related expenses Using the $20,000 instant asset write-off Managing your GST liability   Read more  Read more

Is there GST payable on sale of my property?

When selling a property registered for GST, the margin scheme can be used as an alternative way to work out the GST payable on a concessional basis. Where the scheme is applied, GST is paid for one-eleventh of the sale price.  The margin scheme calculates GST on the increase in value since 1 July 2000 if the property was acquired before 1 July 2000; or the difference between the purchase…  Read more

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