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Hauled in before a Senate enquiry, media mogul Kerry Packer famously said, "Of course I am minimising my tax. And if anybody in this country doesn't minimise their tax, they want their heads read, because as a government, I can tell you you're not spending it that well that we should be donating extra!"
Former Prime Minister Paul Keating recently suggested that Self Managed Superannuation Funds (SMSF) should be restricted from investing in residential property.
Mr Keating told the Financial Review, "If I was treasurer today, I would be looking very hard at the whole entitlement or availability of debt to SMSFs. They have gearing available to them and, of course, many of them are taking the option of buying residential property."
According to the latest Australian Taxation Office (ATO) SMSF statistics, real residential property represents 3.5% of the value of all assets held in SMSFs. This level of investment has been consistent since 2009 with the bulk of properties worth between $200,000 and $1 million. SMSF investment in commercial property is around 12%. However, what has changed is the number of investors with an average of 1,200 new investors using their SMSFs to purchase residential property each year. And, the explosion in limited recourse borrowing arrangements which have increased 1758% between June 2009 and June 2014.
For many SMSFs however, there are some very big risks if the borrowing arrangements and property purchases are not put in place correctly. If your SMSF breaches its compliance obligations, it is at risk of being deemed non-compliant and losing its concessional tax status and the trustees also risk being fined personally under the ATO's new penalty powers that came into effect on 1 July 2014.
Here are the top SMSF property issues:
The 2% debt tax is in and the carbon tax is out. We look at some of the highlights for the new financial year.
The deadline to register with AusIndustry for the R&D Tax Incentive ends on 30 April.
Data matching helps the ATO identify taxpayers that have not declared the full amount of income they make on their tax return.
Almost half of all tax collected flows through about 800,000 employers. In an environment where tax revenues are falling, Fringe Benefits Tax (FBT) is of particular interest to regulators. The simple reason is that the ATO can rely on the fact that many employers simply fail to recognise their FBT obligations - it is low hanging fruit.
The ATO has advised that it is phoning some businesses in the building and construction industry to:
To help prepare for lodgment, the ATO is reminding those with SMSFs that their fund's audit report needs to be completed before their SMSF annual return can be lodged.
Two recent court cases dealing with self-managed superannuation funds (SMSFs) have highlighted the importance of making, and recognising, Binding Death Benefit Nominations (BDBNs).
The Government has announced that the ATO will take over the running of the Small Business Superannuation Clearing House.