|
Listing by latest edition
Click on an article heading to view the synopsis and link to read more.
List alphabetically
How to detect a scam email
The emails can look very professional and give the appearance of coming from a legitimate financial institution. They may include logos and brands that look genuine. Below is an example of one I received this week. For me, the giveaway that it was a scam is the fact that I don't bank with St. George, but as you will see there is a simple way to determine the authenticity of such emails.
This is the email I received:
Of course, the first rule is do not follow any links contained in the email.
Secondly, use the following instructions to check the authenticity of the sender of the email. As you can see in the screenshots above and below, the email address looks legitimate at first glance.
However if you click on 'reply' and then double click on the name the full address displays:
As you can see in this example the domain name is @mail.com rather than the expected @stgeorge.com.au.
If you are in any doubt call your bank or check the bank's website, as most have an up to date list of reported hoax emails.
Read full article >>
Budget Impacts
What will my income tax saving be next financial year?
-
Below I have outlined each of the proposed changes. However, the ABC has a calculator that allows you to see the impact at your level of income for next financial year.
-
The calculator can be accessed here.
I have a taxable income under $125,334:
-
A new tax offset, named the Low and Middle Income Tax Offset (LMITO) will apply which will reduce the tax you have to pay.
-
As it is a tax offset (as opposed to a drop in the tax rate), the benefit will be received when you lodge your tax return - in other words, you will receive it as a lump sum each year, not throughout the year.
-
If your taxable income is up to $37,000 the maximum offset will be $200.
-
If your taxable income is between $37,001 and $48,000 the maximum offset will be $530.
-
If your taxable income is between $48,001 and $90,000 the maximum tax offset will be $530.
-
If your taxable income is between $90,001 and $125,333 the $530 tax offset reduces by 1.5 cents for each dollar by which your taxable income exceeds $90,000.
-
The proposed effective date of this measure is 1 July 2018, meaning that the first refunds will be issued from July 2019.
I have a taxable income under $37,001:
-
You would currently be in receipt of the Low Income Tax Offset (LITO), which is a maximum of $445.
-
This will increase to $645.
-
This is in addition to the LMITO discussed above.
-
The proposed effective date of this measure is 1 July 2022, meaning that the first refunds using the higher amount will be issued from July 2023.
I have a taxable income above $87,000:
-
You are currently paying 32.5% income tax on the amount of your income between $87,001 and $180,000.
-
The 32.5% marginal rate will apply to income between $90,001 and $180,000.
-
The maximum benefit of this measure will be $135.
-
The proposed effective date of this measure is 1 July 2018.
I have a taxable income above $37,000:
-
You are currently paying 19% income tax on the amount of your income between $18,201 and $37,000.
-
The 19% marginal rate will apply to income between $18,201 and $41,000.
-
The proposed effective date of this measure is 1 July 2022.
I have a taxable income above $90,000:
-
You are currently paying 32.5% income tax on the amount of your income between $37,001 and $87,000.
-
As outlined above the upper threshold will increase to $90,000 from 1 July 2018.
-
This will be further increased to $120,000.
-
The proposed effective date of this measure is 1 July 2022.
I am currently in the 37% income tax bracket (or above):
-
The 37% marginal rate currently applies to income between $87,001 and $180,000.
-
This marginal rate will be abolished completely, meaning that the 32.5% marginal rate will apply to income between $41,001 and $200,000.
-
The proposed effective date of this measure is 1 July 2024.
I pay the Medicare Levy:
I pay the Medicare Levy:
-
If you are single, you currently pay the Medicare Levy once your taxable income exceeds $21,655. This will be increased to $21,980.
-
If you are a family, you currently pay the Medicare Levy once your combined taxable income exceeds $36,541. This will be increased to $37,089.
-
If you are of age pension age and single currently you pay the Medicare Levy once your taxable income exceeds $34,244. This will be increased to $34,758.
-
For every child you have, your threshold is currently increased by $3,356. This will be increased to $3,406.
-
The proposed effective date of this measure is 1 July 2017.
I have a super fund which contains compulsory insurance and I am either under 25 years of age or my fund has not received a contribution in the last 13 months or my super fund balance is less than $6,000:
-
Currently a number of funds automatically provide life insurance and the premiums erode the person's super balance.
-
It is proposed that such provision of life insurance is changed to an opt-in cover, as opposed to default cover.
-
The proposed effective date of this measure is 1 July 2019.
My current super fund has an exit fee:
I have a super fund with a balance below $6,000:
-
It is proposed to introduce a 3% annual cap on all 'passive' fees charged by super funds to members with balances below $6,000.
-
It is understood that passive fees will include administration and investment fees, but not transaction costs.
-
The proposed effective date of this measure is 1 July 2019.
I receive the age pension and work:
-
Currently, there is a 'work bonus', which allows employees who are in receipt of the age pension to earn up to $250 per fortnight from employment without it being assessed by Centrelink under the income test.
-
It is proposed to increase this to $300 per fortnight.
I am of age pension age and required more income:
The current 'work test' for super negatively impacts me:
-
Currently, people aged between 65 and 74 must work a minimum of 40 hours in a consecutive 30 day period in a financial year to be eligible to contribute to super.
-
It is proposed that where a person has combined superannuation balances of less than $300,000 they will be able to make voluntary contributions to their super for a year following the financial year in which they last met the work test.
-
The proposed effective date of this measure is 1 July 2019.
I have a self-managed super fund (SMSF):
-
It is proposed to increase the maximum number of members from the current 4, to 6.
-
For SMSFs that have three consecutive years of clear audit reports and that have lodged their annual returns in a timely manner, the current requirement to have the fund audited annually will change to a requirement to have the fund audited every three years.
-
The proposed effective date of this measure is 1 July 2019.
I run a small business:
-
The ability to deduct purchases of assets costing less than $20,000 will be extended for another twelve months - to 30 June 2019.
-
For this purpose, a 'small business' is defined as a business with an aggregate annual turnover of less than $10M.
-
The proposed effective date of this measure is 1 July 2018.
I want to receive aged care services in my home:
-
Over the next 4 years, an additional 14,000 high level home care packages will be made available.
-
The proposed effective date of this measure is 1 July 2018.
I am a high-income earner with multiple employers:
-
Currently, some high-income earners unintentionally breach the $25,000 concessional contributions cap due to the Super Guarantee (SG) contributions made by multiple employers. This is because each employer must meet their SG obligations, which is to pay SG contributions of 9.5% of the quarterly income up to $54,030.
-
Where a person has income above $263,157 and has more than one employer, they will be able to nominate that their wages from certain employers are not subject to SG.
-
The proposed effective date of this measure is 1 July 2018.
Read full article >>
Stay calm. This was all part of our plan.
| |
Share market falls should come as no surprise to any adviser over the age of 18. We planned for this week’s fall. And we have planned for the next one, as well. That lets our clients stay nice and calm.
|
Read full article >>
Major Banks Levy
The Major Banks Levy is is forecasted to raise more than $6 billion over 4 years.
It will affect banks with liabilities above $100 billion. Currently this includes the four major banks (ANZ; Commonwealth; NAB & Westpac) as well as Macquarie Bank.
To me, the interesting elements of this announcement really fall in to two categories. These are:
(a) the industry and media response; &
(b) as shareholders (whether directly or via our super funds) should we be worried about the cost of this to the profit of banks
Industry & Media Response I have been surprised that a likening of the Major Banks Levy to the Mining Tax has not been made.
Instead, I have heard comments such as those made by the Australian Bankers Association Chief Executive Anna Bligh that this measure could threaten the stability of the financial system. And the morning after the Budget there was the response from some in the banking sector that they would recoup the cost and pass it on to consumers. In my humble view, some of these comments do more to threaten the stability of the financial system than the Major Banks Levy does!
Wouldn't it be refreshing to see one of the Major Banks come out with a press release that said they accept their corporate responsibility to the society that has made them such wealthy organisations and confirm that they will not pass on the cost of the Levy, and that they are open to new clients and hope that the support of new clients will help them defray this Levy?
Impact as a shareholder It is projected that the levy will cost the big four banks between $300M to $400M each per year.
The share market did what it normally does, and over-reacted to this news and wiped billions off the value of the major banks.
But this is an over-reaction because the Budget also confirmed the government’s intention to legislate the rest of its $48bn 10-year company tax cut plan. Although recently passed legislation starts the tax cut only for businesses with a turnover up to $50 Million, in April the Treasurer Scott Morrison said the government will present legislation for tax cuts for larger businesses when it believes it has the support of the Senate.
Modeling conducted by the Australia Institute (see table below) shows that the proposed company tax cut would save the same big 4 banks approximately $2 billion per year (based on 2015 figures), rising to over $3.4 billion per year in 10 years’ time!
So, the net effect of the Major Banks Levy plus the Tax Cut would actually be positive for the banks concerned!
Table 1 Amount of Tax cut planned for individual companies.
Read full article >>
Impacts of the budget
I pay the Medicare Levy:
-
Currently, the Medicare Levy is 2.0% of taxable income;
-
It is proposed to increase this to 2.5%;
-
The proposed effective date for this is 1 July 2019;
-
IMPACT: this will increase your tax burden.
I receive Family Tax Benefit ('FTB') Part A:
-
In the 2016 Mid Year Economic and Fiscal Outlook, it was announced that the maximum rate for the FTB Part A would be increased from 1 July 2017;
-
The Budget has abolished this increase;
-
IMPACT: families will not receive the increase.
I receive the Family Tax Benefit ('FTB'):
-
Ordinarily the FTB payment rates are indexed each financial year;
-
The Budget has abolished the indexation for the next two financial years. Indexation will resume on 1 July 2019;
-
The proposed effective date for this is 1 July 2017;
-
IMPACT: families will not receive the increase.
I receive one of the following payments: Age Pension; Disability Support Pension; Parenting Payment Single; Veterans' Service Pension; Veterans' Income Support Supplement; Veterans' Disability Payment; War Widow(er)s Pension or a permanent impairment payment under the Military and Compensation Act 2004:
I have a residential investment property and claim travel expenses related to it:
-
Currently where a person has an investment property, deductions for travel expenses related to inspecting the property, maintaining the property or collecting rent are allowable deductions;
-
It is proposed to disallow these expenses as deductions for residential investment property;
-
The proposed effective date for this is 1 July 2017;
-
IMPACT: you will have a higher taxable income and therefore pay a higher amount of tax.
I have a residential investment property and claim depreciation:
-
Currently an investor can claim depreciation deductions for plant and equipment for both plant and equipment for which they have incurred the expense as well as for plant and equipment purchased by the previous owner of the property that has transferred to them;
-
It is proposed to amend this such that an investor will only be entitled to claim a depreciation deduction for plant and equipment where the investor has actually purchased the plant and equipment. The depreciation deduction will cease on the earlier of the end of the useful life of the asset, or when the investor no longer owns the asset;
-
The proposed effective date for this is 1 July 2017 however existing investments are grandfathered (including contracts already entered into at 7.30pm (AEST) on 9 May 2017);
-
IMPACT: residential property investors will pay a greater level of tax.
My family income is over $350,000 per annum and I receive the child care rebate:
-
The proposed effective date for this 1 July 2018;
-
IMPACT: families with annual income over $350,000 will lose the child care rebate.
I have a small business and am considering purchasing an asset:
-
Currently where a small business purchases an asset that costs less than $20,0000 the small business can deduct the purchase price (as opposed to depreciating the asset). This was due to end on 30 June 2017;
-
It is proposed to extend this initiative for a further 12 months to include any eligible assets used or installed ready for use by 30 June 2018;
-
IMPACT: small business will be able to receive immediate write-offs.
I am aged 65 or over and may want to downsize my home:
-
It is proposed that where a person sells their principal residence, they will be able to make a non-concessional contribution to their super fund of up to $300,000 from the sale proceeds. These contributions will be exempt from the current work test for superannuation contributions. Interestingly, the Budget papers also state that these contributions will be in addition to those permitted under existing rules and caps - including the $1.6M balance test for making concessional contributions;
-
To be eligible, the principal residence must have been owned for the past 10 years;
-
This right will extend to both members of a couple for the same home;
-
The proposed date of effect is 1 July 2018;
-
IMPACT: This measure will assist older people to contribute to superannuation when downsizing their home.
I lost the age pension due to the 1 January 2017 asset test changes:
I am saving for my first home:
-
It is proposed that you will be able to direct your savings for your deposit to your super fund. You will be entitled to contribute up to $15,000 per annum (and $30,000 in total). These limits are to be part of your existing caps. Concessional contributions and the deemed earnings on them, will be able to be withdrawn from your super fund and will be taxed at your marginal rate less 30%. Where a couple is purchasing a home together, they are each entitled to take advantage of this measure.
-
The proposed effective date for making the contributions is 1 July 2017, and the proposed effective date for withdrawing these contributions is 1 July 2018;
-
IMPACT: first home buyers should seek financial advice to determine whether they should make salary sacrifice contributions to super to fund their deposit in this manner.
Read full article >>
|
|
|
|