Tax Updates – December 2018
Work-related tax deductions down for 2018
ATO’s expenditures to raise awareness and sentience to close the tax gap for individuals have been followed by a drop in the overall value of work- related deductions for tax time 2018. Commissioner Chris Jordan has reported that taxpayers are seemingly more cautious when claiming work-related expenses in their 2017-2018 income tax return.
ATO identifies 26,000 incorrect rental property travel expense claims
The ATO has distinguished 26,000 citizens who have asserted derivations amid assessment time 2018 for movement to their venture private investment properties, regardless of ongoing changes to impose laws.
From 1 July 2017, speculators cannot guarantee make a trip costs identifying with investigating, keeping up or gathering rent for a private rentable house as derivations, subject to specific exemptions. An avoidance applies for this limitation if the use is important for the pay delivering motivations behind carrying on a business (for instance, an investment property business), or if the expenses are brought about by a “barred substance”.
Small business corporate tax rates Bill is now law
The organization assess rate for base rate elements will presently diminish from 27.5% to 26% in 2020– 2021, and after that to 25% for 2021– 2022 and later pay years. This implies qualified corporate citizens will pay 25% in 2021– 2022, as opposed to from 2026– 2027.
The new law additionally builds the private company pay impose balance rate to 13% of the essential pay assess obligation that identifies with independent venture pay for 2020– 2021. The balance rate will at that point increment to 16% for 2021– 2022 and later pay years.
GST reporting: common errors and how to correct them
A few organizations are committing basic errors detailing their GST. The ATO reminds citizens that maintain a strategic distance from the accompanying normal GST announcing mistakes:
- Transposition and computation blunders – these missteps regularly happen when physically entering sums, so it’s imperative to twofold check all figures and counts before presenting your BAS;
- No assess receipt – you should keep charge solicitations to have the capacity to guarantee GST credits on business-related buys;
- Transaction groupings – it’s imperative to check what GST applies for every exchange; for instance, exchanges including nourishment might be GST appropriate; and
- Errors in bookkeeping frameworks – a framework with one coding mistake can group a few exchanges inaccurately.
Government announces super refinements
The Government has declared it will change the super duty laws to address some minor yet critical issues, as a component of the continuous super changes. The progressions include:
- Deferring the begin date for the far reaching pay item for retirement (CIPR) system;
- Adjusting the meaning of “life expectancy period” to represent jump a very long time in estimations, and correcting the benefits exchange balance top tenets to give credits and charges when these items are satisfied in portions;
- Adjusting the exchange balance top valuation rules for characterized advantage annuities to manage certain benefits that are forever decreased after an underlying higher instalment;
- Correcting a valuation mistake under the exchange balance top guidelines for market-connected benefits where an annuity is driven and moved over, or associated with a successor support exchange;
- Making changes to guarantee that demise advantage rollovers including protection continues remain tax-exempt for dependants.
CGT on grant of easement or licence
Tax assessment Determination TD 2018/15, issued on 31 October 2018, considers the capital increases impose (CGT) outcomes of conceding an easement or permit over an advantage.
In the ATO’s view, CGT occasion D1 (making legally binding or different rights) as opposed to CGT occasion A1 (discarding an advantage) happens when any of the accompanying rights are conceded over a benefit:
- An easement, other than one emerging by activity of the law;
- An appropriate to enter and expel an item or part of the dirt from a citizen’s territory; or
- A permit (which does not present the selective ideal to have the land).
ATO scam alert: fake demands for tax payments
Although tax time 2018 is over, the ATO has warned taxpayers and their agents to remain on high alert for tax scams. Scammers are growing increasingly sophisticated and hope to exploit vulnerable people.
Be vigilant on the off chance that anybody gets in touch with you requesting instalment of a duty obligation that you did not think about. The ATO will never request that you make an instalment into an ATM or utilizing blessing or prepaid cards, for example, iTunes and Visa cards, and will never you to store assets into an individual financial balance.
TIP: Scammers have been known to impersonate tax agents as well as ATO staff. If you have any doubts about the legitimacy of a phone call or other communication, you can call the ATO directly (toll free) on 1800 888 540.
Government to establish $2 billion fund for small business lending
The Government has declared that it will build up a $2 billion Australian Business Securitisation Fund and an Australian Business Growth Fund to give longer-term value financing to independent companies.
Treasurer Josh Frydenberg has said some independent ventures as of now think that it is hard to get fund on aggressive terms except if it is anchored against land. To defeat this, the proposed Australian Business Securitisation Fund will put up to $2 billion in the securitisation showcase, giving extra financing to littler banks and non-bank loan specialists to on-loan to independent companies on increasingly aggressive terms.
First Home Super Saver scheme and downsizer super contributions: ATO guidance
In November 2018, the ATO issued a Super Guidance Note to give individuals general data about how the First Home Super Saver (FHSS) conspire works. The direction note discloses who is qualified to utilize the plan, the sort of commitments that can be made and afterward discharged from super to purchase a first home, how to apply to the ATO for a FHSS assurance, and the prerequisite to buy a house.
The ATO additionally issued direction on the as of late instituted downsizer superannuation commitment measures, which permit individuals matured more than 65 to contribute the returns from moving certain property into their super.
ATO information-sharing: super assets in family law proceedings
Superannuation is frequently the most noteworthy resource in an isolated couple’s property pool, especially for low-pay family units with couple of benefits. Gatherings to family law procedures are as of now lawfully required to uncover the majority of their advantages for the court, including superannuation, yet by and by gatherings may overlook, or intentionally retain, data about their super resources.
The Government has reported an electronic data-sharing instrument to be set up between the ATO and the Family Law Courts to permit superannuation resources held by important gatherings amid family law procedures to be recognized quickly and even more precisely from 2020. This measure was incorporated as a major aspect of a more extensive money related help bundle for women declared on in November.