Tax Block Accountants Update

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Work and rental property claims in 2016 

In a recent media release the ATO has encouraged people to check which work related expenses they are entitled to claim this tax time, and to understand what records they need to keep specially claiming car expenses, travel, internet, mobile phones and self-education." data-share-imageurl="">

Bringing your some update on tax news with some other items that may pick your interest.

Work and rental property claims in 2016 

In a recent media release the ATO has encouraged people to check which work related expenses they are entitled to claim this tax time, and to understand what records they need to keep specially claiming car expenses, travel, internet, mobile phones and self-education.

Assistant Commissioner Graham Whyte also noted that “the ATO will take a closer look at any unusual deductions and contact employers to validate these claims”.

In another media release, Mr Whyte said the ATO would pay close attention to excessive interest expense claims and incorrect apportionment of rental income and expenses between owners. Mr Whyte said “We are also looking at holiday homes that are not genuinely available for rent and incorrect claims for newly purchased rental properties”.

SMSF borrowing arm’s-length terms deadline extended

The ATO has extended the deadline to 31 January 2017 for trustees of self-managed super funds (SMSFs) to ensure that any related-party limited recourse borrowing arrangements (LRBAs) are on terms consistent with an arm’s-length dealing. 

The deadline extension to 31 January 2017 follows the ATO’s release of Practical Compliance Guideline PCG 2016/5, which sets out “safe harbour” terms for LRBAs. 

If an LRBA is structured in accordance with PCG 2016/5, the ATO will accept that the LRBA is consistent with arm’s-length dealing and the non-arm’s length income (NALI) rules (47% tax) will not apply.

Non-concessional super cap

In 2016/17 budget, the Government proposed a lifetime non-concessional superannuation contributions cap of $500,000 to apply from Budget night (3 May 2016). 

This means that people who are planning to make non-concessional contributions now need to check their historical non-concessional contributions data back to 1 July 2007 (which will be counted against the $500,000 lifetime limit). 

Clearance certificates for property disposals

A new foreign resident capital gains withholding tax regime has been introduced that applies to contracts that are entered into from 1 July 2016, with a market value of $2 million or more. 

Where the new rules apply, the transaction will incur a 10% non-final withholding amount at settlement.

Withholding does not apply to sales by Australian resident sellers, but these sellers will need to obtain a clearance certificate from the ATO and provide it to the purchaser to avoid the 10% withholding.

ATO Small Business Benchmarks & Business Performance Check Tool

The ATO has released the latest small business benchmarks which are based on the data from 2014 income tax returns and business activity statements.

Assistant Commissioner Matthew Bambrick said one of the great things about the benchmarks is that they give small businesses peace of mind. "If a small business is inside the benchmark range for their industry and the ATO hasn't received any extra information that may cause concern, they can be confident that they probably won't hear from us," Mr Bambrick said.

The business performance check tool on the ATO App also makes it quick and easy for small businesses to compare their own operations with industry benchmarks.  

Mr Bambrick said the benchmarks were also a helpful guide for small businesses to see how they stack up against others in their industry.  "We know a lot of small businesses, advisors and industry associations use the benchmarks to gauge competitiveness, whether or not costs might be too high or profit margins too low."

"Sometimes when a small business finds themselves outside the benchmarks for their industry it may be because they have more waste than their competitors or they're spending more on materials in comparison. Using the benchmarks as a guide, not only can they identify where they are slipping behind but also how they can improve and build their business."

Tax Block Accountants

45, Middlesborough Dr Craigieburn VIC 3064

Ph: 0423 288 166

Share it now!

Work and rental property claims in 2016 

In a recent media release the ATO has encouraged people to check which work related expenses they are entitled to claim this tax time, and to understand what records they need to keep specially claiming car expenses, travel, internet, mobile phones and self-education." data-share-imageurl="">