Where to next?
This is what we’re asked by many people and the reason why our clients chose Hayes Knight.
Our clients know we are good at the fundamentals – accounting, tax compliance, and audit – but they come to us because not only are we good at the fundamentals, we have the expertise to help them identify, structure, and secure, their future … their next step.
Who is in the firing line?
If you are a high income earner, earn income from overseas, or have a large asset base, then, if the rumours have any truth to them, you’re in the firing line in the 2015/2016 Federal Budget.
The Australian economy is coming off its resources boom ‘sugar hit’ and as Reserve Bank Governor Glenn Stevens said recently, “the government has little choice but to accept the slower path of deficit reduction over the near term.” The declining iron ore price has blown a $30bn tax receipts hole in the budget over 4 years. So, the question is, where can the Government get savings into the Budget that will pass the Senate while being palatable to voters?
Prime Minister Tony Abbott recently said, “There will be tough decisions in this year’s budget as there must be, but there will also be good news.” This Federal Budget is not about what the Government believes is necessary but what they can get through the Senate. Large structural reforms to tighten welfare, education and health have failed in the Senate in their current form. This budget will be about moving thresholds and imposing restrictions on the existing system.
Contributing to Super
What you need to know
Topping up your superannuation just got a little less dangerous with new rules that allow excess non-concessional contributions to be refunded.
Before the change, a huge number of people were penalised by excess concessional contributions tax because they contributed over the allowable level of contributions. It was not uncommon to see $70,000 tax bills from what was a relatively small over contribution. And, there was very little you could do about it even if the contribution was not deliberate.
The new rules mean that members can have the excess contributions refunded to them PLUS 85% of the associated earnings on those amounts. The full earnings will then be included in your assessable income and taxed at your marginal tax rate. You will then be entitled to a non-refundable tax offset equal to 15% of the associated earnings. Simple right? Maybe not but it’s a lot easier to understand than a $70,000 tax bill for going even $1 above your contributions limit.
These new rules apply to excess non-concessional contributions made from the 2013/14 financial year onwards. So, if you were affected by excess contributions tax, something can be done about it.