Tips and Advice

Claiming Work Related Expenses
Outlines common tax deductions and claims information. Click the link below to download. Claiming Work Related Expenses (4815 KB)

Why you should update your SMSF Trust Deed.

Basically because the Tax Office and the superannuation law says so, that’s why.

The Commissioner of Taxation has commented that “trustees may need to take care to ensure the fund’s trust deed is up to date in the event that members wish to take advantage of…new options…”.

The Commissioner has also stated that “we will take a firm approach with trustees who fail to make a genuine effort to comply”.

It is the Trustee’s obligation to ensure that the Trust Deed for their SMSF is regularly updated. The Trust Deed must contain the necessary powers for day to day administration of the Fund. 

By conducting regular reviews or subscribing to an automatic deed updating service you can rest easy knowing that not only is the daily management authorised, but in the event of the unexpected your Trust Deed doesn’t leave the members high and dry.

For instance, we have seen many trust deeds which have not been amended and were established prior to 1 July 2007. Simplified Superannuation legislation made significant changes, most of which became effective from 1 July 2007. The sad part is that it isn’t as easy as just scanning the deed for references to RBL’s to check whether it meets the needs of the Trustees and Members.

As well, the Cooper Review is likely to result in further amendments in the near future, and once again this may impact the Trust Deed of the fund. With further amendments likely it is a pertinent time to conduct your review or consider subscribing to an updating service.

Remember that if the superannuation law has changes but your trust deed does not, then the trustee and members may be unable to make use of the changes because their trust deed does not empower them appropriately.

Section 55(1) of the SIS Act provides that a person must not contravene a covenant contained, or taken to be contained, in the governing rules of the fund. It further provides that any loss as a result of this conduct can be recovered from the Trustee, Adviser, Accountant, Auditor etc if they were the party whose conduct resulted in the contravention.

This loss can be recovered by any person suffering the loss or damage as a result of the contravention and they have six years from that date to make a claim. This leaves not only the Trustee in a precarious situation if they have not conducted regular reviews of the Trust Deed but potentially their Advisers or any other person providing assistance to the Trustees.

If you have any questions in relation to this article, please contact TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.

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Buy/Sell Agreements for Co-owners of a Business

A Buy/Sell Agreement is a business succession contract usually established between co-owners of a business to enable the business to continue on the involuntary departure of the one or more of the owners in the event of their death, trauma, critical illness or total permanent disability. Typically, retirement or other voluntary dissolutions of the business are not covered under buy/sell agreements but come under contractual arrangements.

Generally, a buy/sell agreement is designed to cover different types of small to medium size business ownership structures, such as family trusts, partnerships or companies.

The aim of the agreement is to ensure that:

• The business is preserved and can continue to be operated by the surviving owners;
• The family or estate of the departing co-owner receives a payment that reflects the agreed value of their equity in the business; and
• Arrangements are established to ensure that a buy-out can be funded at the agreed value.

The operation of the agreement is triggered by the specified event and the buy-out of the departing co-owners’ business interest is usually funded by one or more insurance policies. Hence, the contract between the co-owners is usually comprised of a transfer (sale) agreement and a funding (insurance) agreement.

The transfer part of the agreement is in two parts. One part establishes a sale agreement called a sell or put option so that the surviving co-owners are required to purchase the departing co-owner’s share of the business. The second part is a buy or call option that requires the family or estate of the departing co-owners to sell the business share to the surviving co-owners.

The funding part of the agreement is intended to fund an agreed value of the business interests of the departing co-owner. The agreement will need to state whether this is the book value or the appraised value of the business at the time of the event, or alternatively, state how the value is to be determined. Regardless of this, it usually obliges the co-owners to take out and maintain one or more insurance policies covering their death, disablement, illness and trauma. Premiums may be tax deductible although tax advice should be sought on this aspect.

There are a number of obligations for co-owners entering succession agreements. Key among them is to:

• Maintain all the insurance policies mentioned in the agreement, including paying any premiums as required under these policies;
• Keep all personal documents such as Wills, Enduring Powers of Attorney and any superannuation fund death benefit nominations up to date;
• Bring the buy/sell agreement to the attention of their attorneys and executors so they are aware of the contract obligations; and
• Not act contrary to the obligations of the buy/sell agreement.

Generally, for tax purposes the contract is specified to be operating from the date of the trigger event. Clients will need legal and tax advice on what is the most suitable arrangement for them.

If you have any questions in relation to this article, please contact TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.

For related tax structuring advice please do not hesitate to contact us.

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Choosing your Executor

It seems that one of the hardest things for most testators these days is choosing who will be their executor. And the more complex the Will the harder it becomes.

In the good old days (when the worst swear word on TV was “bother” and there were no such things as phone contracts) people making their Will (who are called ‘the testator’) simply chose their spouse as their executor. If the spouse died before them then they would substitute their eldest son. Simple.

These days estate planners bring up all sorts of other things to think about that now make the choice a lot harder.

Firstly, if my spouse is my Executor and also my sole beneficiary how can I be sure that they will use my estate for the benefit of our children. They could re-marry and use the assets for their new wife. Anyone remember Lang Hancock and Rose

To protect their kids’ inheritance the testator might want to give only the income from their estate to their spouse with the capital going to the kids after the spouse dies. Will that be enough for the spouse in their advanced years?

The family home will be excluded anyway because almost certainly it is held as joint tenants so that the testator’s half will go to the spouse automatically rather than through the Will. Maybe that should be changed.

So perhaps the Executors should be the spouse and some at least of the children. If there are more than two children there’s the problem of choosing which ones, noting that the more executors there are the more problems there will be in administering the estate particularly if some of them live in other States or countries.

Cases like Katz v Grossman, where the daughter chosen as trustee/executor took steps to cut her brother out of the estate, make the decision one to be carefully considered.

If there is a testamentary trust in the Will there is the issue of an independent executor/trustee. With the recent attacks on discretionary trusts by the courts, if the testamentary trust is designed to protect the assets of the beneficiaries from their creditors then the greater level of independence of the trustees the less likely the trust will be viewed as simply an extension of the beneficiary.

Then there is the issue of the complexity of the estate and whether the person you would most like to be executor has the necessary commercial and financial experience to handle the role – not to mention the time. Of course you could choose a professional executor (accountant, solicitor or even a trustee company) but that comes at a cost to the estate. It may nonetheless be worth it in the long run.

The choice of executor is important and must be made carefully in order to ensure that the testator’s wishes and goals are met in all the circumstances.

If you have any questions in regard to this article, please contact TOWNSEND BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.

For related tax advice please do not hesitate to contact us.

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Can your Will be challenged by your former spouse?

Trevor tells you he has made a Will leaving everything to his wife and their young teenage son. This is his second marriage; he has two adult children from his first marriage and his former wife has not remarried.

Can Trevor’s Will be challenged by his former wife? And what is the time limit on such applications?

A person making a will generally has testamentary freedom to leave their assets to whomever they want. Unfortunately this is only partly true and the court may change the provisions of a person’s Will in certain circumstances.

Under various statutes throughout Australia potentially disappointed former spouses may be able to bring a so-called ‘family provision’ claim against the estate. Such applications have potential to be successful if the applicant is eligible to apply and the person has not been, in the court’s view, adequately provided for under the distribution of the estate.

Who is a ‘former spouse’?

There are subtle differences between the States in the language used to define who is eligible as a “former spouse” for provision under the deceased’s estate.

In Qld and SA, the person had to have been divorced from the deceased to be eligible to apply, while Tasmanian legislation specifies the person’s marriage to the deceased must have been dissolved or annulled.

NSW legislation specifies that a former wife or husband may apply, while WA and NT permits former spouses or de facto partners who are parents of a child of the deceased.

The Victorian legislation is different to all of these in that the court has the power to order provision in favour of any person for whom the deceased had “responsibility” to make provision and to whom proper maintenance and support had not been provided.

Is there a ‘maintenance’ requirement?

There is greater uniformity among the States on the requirement that former spouses receive, or be entitled to receive, maintenance from the deceased at the date of the deceased’s death in order to be eligible to make a claim under the estate.

This requirement for maintenance from the deceased at the time of their death applies in QLD, WA, TAS, VIC and NT. In addition to this maintenance provision, in QLD there is also a requirement that the former spouse has not remarried.

While the maintenance requirement is not strictly placed on the eligibility of former spouses in NSW, SA and ACT, in these States in Court considers this factor in their determination and has to be satisfied of a variety of matters concerning dependence between the parties, whether there was a genuine domestic partnership and need of the persons for entitlement under the estate.

Hence, maintenance and dependency on the deceased immediately before his or her death, whether it was financial, material or emotional dependence, is a key factor in the success of any claim.

What is meant by ‘proper and adequate provision’?

Current legislation describing adequate provision varies from state to state.

The legislation in QLD, TAS and VIC refers to ‘proper maintenance and support’.

In NSW, SA, NT and ACT, the legislators have used the term ‘proper maintenance, education and advancement in life’ while WA legislation has the term ‘proper maintenance, support, education or advancement in life.’

Regardless of these apparent differences, the courts aim to be uniform in their approach to what is ‘proper’ under the circumstances of each case, including the character and conduct of the applicant as well as the financial means and needs of the applicant relative to the size of the estate.

Time for commencing proceedings

An application for provision must be made within the time specified in each State’s Act. The court can extend or reduce the period if it considers it necessary to do so after hearing from the affected parties.

How to limit such claims

Where the Will maker is determined to exclude a beneficiary, the use of Statutory Declarations by the deceased before their death can be useful. Such statements need to be carefully prepared, expressed rationally and not be exaggerated or inaccurate. Generally if the statement amounts to an emotional outpouring it can have the opposite effect.

It is effectively used as evidence by the Will maker as to why they believe their former spouse should not receive part of their estate. It will be considered by the Court along with all the other evidence.

Another way to limit family provision claims is to ensure that an agreement to release rights under both parties’ estates has been made between the former spouses as part of their separation or divorce arrangements.

Legislation in NSW permits potentially eligible family provision applicants (including former spouses) to ‘contract out’ of a claim on each other’s estate in a Deed of Release. This may be done in the lifetime of the person for whole or part of the estate, but the NSW Supreme Court must in all cases determine that it is fair and prudent for both parties to do so and approve the release.

In other States, a signed Deed of Release can be a useful addition to settlement agreements and orders between separating parties to provide intention of the parties to the Deed at a particular time should one of them apply for provision out of the deceased party’s estate. Again such a Deed would be considered as part of the total evidence put forward by both sides.

To return to Trevor’s situation, his former wife would likely be eligible to make a claim for family provision. She has some chance of success if Trevor was still making a financial contribution to her welfare. However, in NSW she would be less likely to succeed if property division arrangements between them included an agreement to release their rights under the estate, and the NSW Supreme Court had approved that release agreement.

Your Will is of course a legal matter and we urge you to contact Townsend Business and Corporate Lawyers for further advice on (02) 8296 6222.

For related tax structuring advice please do not hesitate to contact us.

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Super Investment: Which option is right for you?

With superannuation, it’s easy to set and forget. But choosing a suitable investment option will have a major impact on how your super performs.

The Government website ‘MoneySmart’ offers the following pointers:

How super funds invest your money

Most super funds let you choose a range of investment options. The difference between investment options is mainly how much investment risk you are willing to take. Your fund may have a ready-made investment option for people who don’t choose, which is sometimes called the ‘default investment option’.

Types of Investment Options:

Growth

• Invests around 85% in shares or property.
• Aims for higher average returns over the long term. This also means higher losses in bad years than those you would experience with lower risk options.
• You may also be able to invest in a ‘high growth’ option with 100% in shares and property.

Balanced

• Invests around 70% in shares or property, and the rest in fixed interest and cash.
• Aims for reasonable returns, but less than growth funds to reduce risk of losses in bad years. Those losses usually occur less frequently than in the growth option.
• You may also be able to invest in a ‘moderate’ option with around 50% in shares and property.

Conservative

• Invests around 30% in shares and property with the majority in fixed interest and cash.
• Aims to reduce the risk of loss and therefore accepts a lower return over the long term.
• There is less chance of having a bad year than in the balanced or growth options.

Cash

• Invests 100% in deposits with Australian deposit-taking institutions or in a ‘capital guaranteed’ life insurance policy.
• This option aims to guarantee your capital and accumulated earnings cannot be reduced by losses on investments.

Picking a suitable investment option

Most people work for 30 to 40 years and live for another 25 to 30 years after retiring. You want your super to grow and to keep pace with inflation during this time.

For this reason, a growth or balanced strategy may suit a long-term investor who won’t be spending their super for more than 10 years.

A higher risk strategy may deliver higher returns, but the risk is losses in bad years. Over 30 to 40 years, it’s likely that any growth strategy will lose money in at least 4 to 6 of those years. However, there are likely to be more ups than downs.

Historically, over any 20-year period, a growth or balanced strategy has given better returns than more conservative investment options. You must decide if the likely rewards are worth the risk.

Think before you choose

When choosing your investment strategy, consider the following:

• Your age
• How comfortable you are with investment risk
• How long before you are able to access your funds
• Your retirement goals

If you won’t be spending your super for 5 or more years, your focus should be on what it’s likely to be worth in the future. It doesn’t matter what it is worth from day to day, in the same way that the value of your home doesn’t matter from day to day. It only matters when you sell your house, or in this case, take out your super.

A lower risk, lower return strategy (e.g. capital guaranteed or capital stable) could suit people who need greater security and less risk. This strategy may suit if you’re retiring and intend to withdraw all your super in less than 5 years, and you want to be sure how much money you’ll have.

Picking the right investment option within super is important whether you’re 16 or 65. Your investment strategy will influence how much money you’ll have to retire on and how you live your life in your retirement years.

If you would like more detailed advice or guidance we suggest you contact a Financial Planner. Contact us for trusted referrals to quality independent Advisers.

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Trouble With Debt?

Are you struggling to make ends meet because you are unemployed, sick or your relationship has broken down? Or are you having trouble with family finances for other reasons? Whatever your situation, it’s important to act quickly.

The Australian Securities and Investments Commission through its ‘MoneySmart’ website has the following advice.

Prioritise your debts

If you’re having trouble managing several debts – for example, you’re struggling to meet even minimum repayments on multiple credit cards – here are two payment options you could consider:

• Continue making minimum payments on all cards, while aiming to clear the card with the smallest debt first
• Continue making minimum payments on all cards but aim to pay off the credit card with the highest interest rate first, then keep working your way through your cards

Hardship variation

If you can’t keep up with repayments on your credit cards or loans because of illness, unemployment or other financial difficulties, you should talk to your credit provider and ask them for a hardship variation. To apply you can use your credit provider’s hardship variation form.

When you apply for a hardship variation, the credit provider must respond to your request in writing within 21 days. Remember that credit providers have a legal obligation to respond to you if you are having problems paying your loans.

Without any change being made to your current interest rate, you can ask the lender to:

• Extend your loan period, so that you make smaller repayments over a longer period of time
• Postpone your repayments for an agreed period
• Extend your loan period AND postpone your repayments for an agreed period

When you negotiate you should only make repayment arrangements that you can afford. If you can’t stick to the new arrangement you should speak to your credit provider. Also try to keep paying as much as you can afford, even if it is not as much as the credit provider is asking for.

If your credit provider refuses your hardship application, they must give reasons. If you are not happy with your lender’s response you can lodge a dispute with the Financial Ombudsman Service (FOS) on 1300 780 808 or the Credit Ombudsman Service Limited (COSL) on 1800 138 422.

Are you being taken to court?

If you have received a notice that you are being taken to court for the debt you owe (such as a summons, statement of claim or liquidated claim) you need to decide whether you are disputing the debt.

If you are not disputing it and you can’t pay the full amount then you should speak to court staff about paying off the debt by instalments. You can also talk to one of the Ombudsman Services mentioned above to get advice.

Ask for help

• Financial counselling is a free service offered by community organisations, community legal centres and some government agencies.

• Free legal advice is also available from community legal centres and Legal Aid offices in each state and territory.

• For confidential telephone counselling and emotional support, call Lifeline on 13 11 14 (available 24 hours a day).

Emergency relief

If you need help urgently with living expenses, there are charities that can help you with:

• Food, transport or chemist vouchers
• Rent or accommodation
• Part-payment of electricity, gas or water bills
• Food parcels or clothing
• Budgeting or referrals to other programmes

The Emergency Relief programme is run by the Department of Families, Housing, Community Services and Indigenous Affairs.

Bankruptcy

If you don’t think you’ll be able to repay your debts you can apply for bankruptcy.

Bankruptcy is a process where people are legally declared unable to meet their debts. When you apply for bankruptcy you will be released from most of the debts you owe and debt collectors will stop contacting you.

However, you should carefully consider whether declaring bankruptcy is the right step to take. Being bankrupt can permanently affect whether you can get credit in the future.

Once you are declared bankrupt, you are classified as bankrupt for 3 years and a trustee is appointed to look after your affairs. Your bankruptcy will be listed on your credit report for 7 years and on a publicly-accessible register called the National Personal Insolvency Index for life.

Declaring bankruptcy should only be considered as a last resort. Before applying for bankruptcy you should get legal advice or financial counselling.

The worst thing you can do if you’re drowning in debt is nothing. The longer you leave the problem, the harder it will be to sort things out. No matter how hopeless things might seem, you always have options.

For more information, please click here

Another useful resource is http://www.accc.gov.au/content/index.phtml/itemId/815382

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Wills & Powers of Attorney: How Prepared Are You?

Preparing for your family’s future

No-one wants to think about death in the prime of life. But it’s important to decide what will happen to your assets when you die. Find out how you can give instructions to your family about your legal and medical preferences should you fall ill or lose the capacity to make those decisions yourself.

Wills

A will takes effect when you die. It can cover things like:

• How your assets will be shared
• Who will look after your children if they are still young
• What trusts you want established
• How much money you’d like donated to charities
• Instructions about your funeral

Your will can be written and updated by private trustees and solicitors, who usually charge a fee. There is no charge if you get the Public Trustee in your state to prepare or update your will. You may be charged, however, after you die, if they act as the executor of your will.

You can also buy a will kit from Australia Post, but it’s a good idea to ask a solicitor to review your will to make sure everything is in order. If a will isn’t signed and witnessed properly, it will be invalid.

Keep your will valid and up to date as your legal rights change, specifically if you:

• Marry, divorce or separate
• Have children or grandchildren
• If your spouse or beneficiaries die
• If you have a significant change in financial circumstances

If you die intestate (without a will), the government pays your bills and taxes from your assets, then distributes the remainder, based on a pre-determined formula; certain family members receive more.

If you die intestate and don’t have any living relatives, your estate is paid to the state government.

Estate Plans

An estate plan includes documents that govern how you will be cared for, medically and financially, if you become unable to make your own decisions in the future. It includes your will as well as any other directions on how you want your assets distributed after your death.

You must be over 18 and mentally competent when you draw up the legal agreements that form your estate plan. Key documents might include:

• Will
• Superannuation death nominations
• Testamentary trusts
• Powers of attorney
• Power of guardianship
• Anticipatory direction (end of life decisions about what treatment you would accept or refuse if you were terminally ill or in a persistent vegetative state)

If you have made a binding nomination in your super or insurance policies, the beneficiaries named in those policies will override anyone mentioned in your will. If you have a family trust, the trust continues and its assets will also be distributed according to the trust deed, no matter what is written in your will.

You should ask a legal professional to check your estate plan. A good estate plan should minimise the tax paid by your heirs, and eliminate any family squabbles.

Powers of Attorney

Appointing someone as your power of attorney gives them the legal authority to look after your affairs on your behalf.

Powers of attorney depend on which state or territory you are in: they can refer to just financial powers, or they might include broader guardianship powers. You will need to check with your local Public Trustee.

Generally speaking, there are different types of power of attorney:

• A general power of attorney is where you appoint someone to make financial and legal decisions for you, usually for a specified period of time, for example if you’re overseas and unable to manage your legal affairs at home. This person’s appointment becomes invalid if you lose the capacity to make decisions for yourself.
• An enduring power of attorney is where you appoint a person to make financial and legal decisions for you if you lose the capacity to make your own decisions.
• A medical power of attorney can make only medical decisions on your behalf if you become unable to do so yourself.

You can prepare a few other documents to help your appointees and family as you grow older, including:

• An enduring power of guardianship that gives a person the right to choose where you live and make decisions.
• An anticipatory direction records your wishes about medical treatment in the future, in case you become unable to express those wishes yourself.
• An advance healthcare directive (or living will) documents how you would like your body to be dealt with if you lose the capacity to make those decisions yourself.

The documents you choose to draw up will depend on your unique situation, and the responsibilities you are happy to entrust in others. Get legal advice if you are not sure.

Choosing your power of attorney

Try to nominate people that you know are trustworthy, financially astute, and likely to be around when you need them.

Your legal and financial housekeeping

Once your paperwork is in order, a simple thing you can do – to help your executor and family – is to list the legal documents you have.

It can also help you to keep a record of your personal information and notes on how your legal documents, assets and investments are arranged.

Here is a list of key documents to keep:

• Birth certificate
• Marriage certificate
• Will
• Enduring power of attorney
• Advance health directive
• Personal insurance policies
• House deeds
• Home and contents insurance
• Deeds and insurance policies for any other real estate you own
• Bank account details
• Superannuation papers
• Investment documents (securities, share certificates, bonds)
• Medicare card
• Medical insurance details
• Pensioner concession card
• Any pre-payments of funeral investments

A good will and estate plan can help make sure your wishes are carried out after you die, or if you are no longer able to make your own decisions.

For more information on wills and powers of attorney, please contact us.

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First Home Buyers Benefits NSW: What are you entitled to?

First Home Owner Grant Scheme

The First Home Owner Grant Scheme is available to people buying and building their first home.

If eligible, you can receive the Grant of $7,000 regardless of your income and the area in which you are planning to buy or build. The Grant is not means tested and no tax is payable on it. However, there is a cap of $835,000 on the maximum property price a first home buyer can pay and still be eligible for the grant.  

Your eligibility is determined on the facts and circumstances as at the commencement date of the eligible transaction. This is the date of the contract of purchase or build a home or, for an owner builder, the date the foundations commenced to be laid.

To qualify for the First Home Owner Grant, you must meet the following eligibility criteria:

• Each applicant is a natural person and not a company or trust
• At least one applicant is a permanent resident or Australian citizen
• Each applicant must be at least 18 years of age
• All applicants and/or their spouse/de facto have not owned a residential property, jointly, separately or with some other person, in any State or Territory of Australia before July 2000.
• All applicants and/or their spouse/de facto have not previously owned a residential property jointly, separately or with some other person in any State or Territory of Australia, and occupied that property for a continuous period of at least six months.
• Each applicant has entered into a contract for the purchase of a home or signed a contract to build a home on or after 1 July 2000. In the case of an owner-builder, laying of the foundations commenced on or after 1 July 2000.
• The total value of the property does not exceed the cap amount for eligible transactions which commenced on or after 1 January 2010. The cap amount is reviewed annually and the cap applicable to your application is determined by the commencement date of the eligible transaction. This is the date of the contract or purchase or build a home or, for an owner builder, the date the laying of foundations commenced.

Eligible transaction commencement date

From	To	Cap Amount
1 January 2011	Onwards	$835,000
1 January 2010	31 December 2010	$750,000
1 July 2000	31 December 2009	No cap applicable

• This is the first time an applicant and/or their spouse/de facto will receive a grant under the First Home Owner Grant Act 2000 in any State or Territory (unless subsequently repaid).
• At least one applicant will occupy the home as their principal place of residence for a continuous period of six months, commencing within 12 months of settlement or construction of the home. Where an applicant was a member of the permanent forces of the Australian Defence Force and all applicants were enrolled on the NSW electoral roll, as at the commencement date of the eligible transaction, dated on or after 21 October 2009, then all applicants are exempt from the residence requirement.

How to apply for the First Home Owner Grant

You can apply for the First Home Owner Grant through your financial institution or the Office of State Revenue (‘OSR’). Applications lodged with financial institutions will have the grant available for settlement or for the first draw down on contracts to build.

Applications can only be lodged with OSR after completion and you are registered on title (if you are purchasing under a ‘Terms Contract’, please contact OSR for lodgement requirements). Applications must be lodged within 12 months of completion or settlement of your home.

Aside from the one-off First Home Owner Grant of $7,000, there are also additional grants that are provided to first time buyers. In New South Wales, the First Home Plus Scheme will be replaced by the First Home-New Home Scheme from 1 January 2012.

First Home-New Home Scheme

Under the First Home-New Home Scheme, stamp duty concessions or exemptions for first home buyers will only apply in the case of acquisition of a new home (including a substantially renovated home) or vacant land intended to be used as the site of a new home.

The concessions and exemptions on an agreement to sell or transfer, or on a transfer of, a first home with dutiable value are outlined as follows:

Type of Residence	Dutiable Value	Exemption / Concession
First home	Up to $500,000	Exempt of duty
Vacant residential land	Up to $300,000	Exempt of duty
First home	$500,001 - $599,999	Concession
Vacant residential land	$300,001 - $449,999	Concession

For more information, please contact us.

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Are you afraid of Apps?

With today’s technology evolving at an ever faster pace, the way we manage our business and personal lives has changed dramatically.

Accordingly, Apple and Android device applications (‘apps’) have been created to minimise time spent on business and personal administration. With a wide selection of apps to choose from, it’s hard to know which ones could really benefit you and how you work. We have pin-pointed a few that we think could help you keep apace:

Apple and Android Applications

Apple:

1. AutoLogBook ($9.49):

User Review Rating: 4.5 stars

The AutoLogBook app is a fully featured electronic car logbook for Australian drivers. It is ATO compliant and is listed on the ATO software register. AutoLogBook tracks your Fringe Benefits Tax (FBT) targets, toll roads used, allowances earned, business kilometre percentage and all your trips. Its powerful reporting will save you time and make reporting your travel easy.

It supports all the announced FBT rates, pre and post May-2011. It is the only electronic logbook that tracks and estimates your FBT target so you can stay on track and avoid paying extra FBT. AutoLogBook also supports cars that are not tracking FBT.

2. Easy Books (Free):

User Review Rating: 3 stars

Easy Books is professional bookkeeping, invoicing and time-tracking in your pocket.

It is ideal for small businesses and ‘one man bands’. This app allows you to keep track of all your accounts, including bank accounts, sales and purchase invoices; expenses; earnings; and assets (including depreciation). You can also reconcile bank and credit card account statements.

Entering information is easy and the app features an in-built calculator, pre-filled forms and common linked accounts based on previous entries to help save you time. You can also set recurring transactions to match your standing orders. The app is fully secured by a four digit pass-code.

While the app itself is free, you can add to its features as you need them via in-app purchases. These include Transactions, Customer Invoicing, Online Syncing 6, and Time Tracker.

3. MoneySmart – Accounts, Budgets and Bills ($1.99):

User Review Rating: 3.5 stars

MoneySmart.gov.au is run by the Australian Government agency, ASIC. The website offers free independent guidance to help you make the best choices for your money. It is put together by an experienced team of financial planners and consumer educators.

This app will help you to keep track and understand your expenses, incomes, budgets and bills and links them together. By using this app, you can manage all your personal finances in one place.

4. MoneySmart Financial Calculator (Free):

User Review Rating: 4 stars

Another useful app from Money Smart (ASIC) is the Financial Calculator which helps you keep track of your finances. Get instant calculations for your mortgage, an interest-free deal, loan or superannuation, and a savings calculator.

For full features of these apps, please visit http://www.apple.com/au/mac/app-store  

Android:

It is obvious that Apple currently dominates the market for wireless devices like the iPhone and iPad. However, latest versions of the Android smartphone are now Apple’s biggest competition.  

While a lot of Apple’s apps have been duplicated for the Android, e.g. MoneySmart’s Financial Calculator app, there are a number of apps specific to the Android which are also beneficial.

1. Cashbook – Expense Tracker ($5.99):

User Review Rating: 4.5 stars

This app is used to track expense; income; sales; receipts; and mileage for tax and bookkeeping purposes. Essentially, it replaces your Cashbook. It was awarded No. 10 of “The 25 Best Android Apps for Business” by businesspundit.com.

2. aCar (Free):

User Review Rating: 4.5 stars

Similar to the AutoLogBook by Apple, this Android version records fuel usage, maintenance, expenses and travel for drivers wishing to keep track for FBT purposes. It also generates maintenance reminders and sets cost projections. All round, this app is very useful for keeping track of all your vehicle details in one place.

3. Documents To Go 3.0 ($14.99):

User Review Rating: 4.5 stars

This app allows you to view, edit and create Microsoft Word, Excel, PowerPoint files and view Adobe PDF files on your Android smartphone.

4. Box (Free):

User Review Rating: 4 stars

This app allows you to view and share files from anywhere. It allows you to easily store files online, send big files fast, access content on your Android phone or tablet, and collaborate with other apps.

You can also upgrade to Box Business to collaborate with shared workspaces and sync files to your PC for offline access.

For full features of these apps, please visit https://market.android.com/apps

* * *

No matter what your circumstances, there are useful apps from both Apple and Android which save you time and keep important information at your fingertips. It is well worth exploring the range of apps available for one that best suits you.

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Self Managed Super - Borrowing to Purchase Real Estate

It is now well known that legislative changes to the Superannuation Industry Supervision Act (SIS Act) allows Self Managed Superannuation Funds (‘SMSF’) to borrow to invest in direct property or shares, subject to certain conditions.

SMSF borrowings to acquire property are becoming increasingly popular amongst sophisticated investors and offer many benefits:

• Through gearing, the super fund can acquire real estate property for a greater value than that of the funds’ net worth
• A range of tax benefits
• All rental income received assists in paying off the mortgage loan
• Any expenses such as interest, council rates, insurance and maintenance may be claimed as tax deductions by the super fund, which potentially reduces its tax liability
• The super fund pays the required deposit (+ costs) on the property being purchased
• The super fund can pay out or reduce the mortgage at any time (subject to the terms of the relevant loan)
• Other than the property acquired, all other super fund assets are safe and cannot be touched by any lender due to the ‘limited recourse’ provisions in section 67 (4A) of the SIS (Superannuation Industry - Supervision) Act

There are a number of lenders including the major banks which now have products designed to comply with superannuation and taxation laws enabling your purchase to easily integrate with your existing SMSF.

For more information, please contact us.

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Could You Have Unclaimed Money?

There is currently $600 million waiting to be claimed from bank, credit union or building society accounts, shares and life insurance policies. ASIC have provided an 'Unclaimed Money Online Search' which you can use to check if you have any money being held on your behalf.

ASIC holds money from bank, credit union and building society accounts that have not been used in 7 years and contain a balance of $500 or more. The money sits with the Commonwealth Government until you claim it.

ASIC's unclaimed monies online search database goes back to 1989 for savings bank accounts; 1959 for trading bank accounts; and 1992 for credit union and building society accounts. If you think the account you are looking for was last accessed before 1992, you should contact the state or territory government's office of state revenue or state treasury.

How to claim bank account money:

If you have found your name on ASIC's Unclaimed Money Online Search and the money is from a bank account, you will need to approach the relevant financial institution. They are responsible for accessing the rightful owner of the funds.

If your claim is successful, the bank will notify ASIC, which will then release the funds to the bank for you.

Step 1: Record your Original Transaction Number (OTN). You will need this to make a claim.

Step 2: Check ASIC's list of banks, building societies and credit unions. This list will tell you if the bank you are trying to contact is still operating. If they are not operating, this list will tell you which institution is responsible for deciding your claim.

Step 3: Contact the bank for information on how to make a claim. Many banks have an unclaimed money contact person who can help you with your enquiry. You may need to provide documents such as your driver's licence, passport, bank statements or passbook to prove who you are and your right to the money.

Claiming money from life insurance policies:

ASIC holds money from life insurance policies from insurance companies or friendly societies that have been unclaimed for 7 years after the policy matures. The database for life insurance policies goes back to 1952 and for friendly societies, back to the year 2000.

You will need to approach the relevant institution as they are responsible for assessing the rightful owner of the funds. If your claim is successful, the institution will notify ASIC, who will then release the funds to the institution for you to claim.

Step 1: Record your Original Transaction Number (OTN). You will need this to make a claim.

Step 2: Check the list of life insurance companies and friendly societies to see the institution you need to contact is still operating. If they are not, this list will tell you which institution is responsible for deciding your claim.

Step 3: Contact the company and collect your documents. The relevant institution will tell you what documents, in addition to your OTN, are required. You may need to locate documents to prove you own the policies or are the beneficiary.

Claiming money from Company Shares:

ASIC holds money from shares that people have not collected from companies and its database goes back to 1991. Not all records are available to be searched online so you may contact the ASIC Infoline on 1300 300 630 for a comprehensive search.

Companies can also hold unclaimed money themselves for shares that people have not collected. If the company has sent ASIC the names and amounts, they will be listed in the ASIC gazette and you can claim these funds from the company directly.

For Individuals and Joint Shareholders:

This is also the way to claim if you are a parent or guardian of a child under age 18; acting as the executor of a deceased estate; hold power of attorney or are acting on behalf of a registered company or as a trustee.

Step 1: Record your Original Transaction Number (OTN). You will need this to make a claim.

Step 2: Fill out the 'How to claim your money form' available from ASIC. Copies of documents you need to supply must be certified as being true copies, but some original documents may be required.

Step 3: Post the claim form and documents to:

                    Unclaimed Monies Unit

                    Australian Securities & Investments Commission

                    GPO Box 9827

                    BRISBANE QLD 4001

Claiming shares or money held by a company (ASIC gazette search):

Step 1: Search the ASIC gazette. You will need to do this to get the contact details of the company you have shares in.

Step 2: Contact the company. The company can tell you how to claim the money or shares.

If you are claiming on behalf of the following you will need to contact the Unclaimed Monies Unit for further instruction:

• deregistered company or business
• when the shareholder has died without a will

State governments also hold money, such as:

• deceased estates
• share dividends
• salaries and wages
• cheques
• over-payments
• proceeds of sale
• rent and rental bonds
• trust money
• principal and interest
• expenses
• refunds and much more

If you find that you have money yet to be claimed, you need to contact the public trustee in the state where the money is held.

ASIC's Unclaimed Monies Unit regularly sends letters to people and companies whose names match our records. If you receive a letter from them you can check your entitlement by calling 1300 301 198 or email unclaimed.money@asic.gov.au . If you have still not found what you are looking for, please contact the ASIC Infoline for a more comprehensive search.

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Self Managed Super Funds - Corporate Trustee or Individual Trustee?

One of the most basic issues to be considered by trustees of SMSFs (and also by those about to establish an SMSF) is whether it is more appropriate for the SMSF to have individual or a corporate trustee.

Additional expenses are involved for a corporate trustee, such as initial establishment costs for a new company, as well as annual ASIC lodgement fees. There are also generally additional administrative and lodging requirements for a corporate trustee.

Nevertheless, there are several reasons why a corporate trustee may be more appropriate for an SMSF than individual trustees. These reasons can be summarised as follows:

Sole member SMSFs

It is possible for the sole member of an SMSF to also be the sole director of a corporate trustee.

However, a sole member SMSF cannot have a sole individual trustee - if there are to be individual trustees, there must be a second individual trustee of the SMSF, in addition to the member/trustee.

Flexibility

Where there are individual trustees, any change of trustee may require all the assets of the SMSF to be transferred into the names of the remaining or new trustees.

However, where there is a corporate trustee, any change to the directors of that corporate trustee will not require any transferring of the assets of the SMSF.

This is especially important when a member dies or becomes incapacitated - in that case, where there are individual trustees, all the assets of the SMSF may need to be transferred into the names of the remaining or new trustees. However, the death or incapacity of any director of a corporate trustee will not require any transferring of the assets of the SMSF; changes are only made to the director of a corporate trustee.

Payment of Benefits

An SMSF with a corporate trustee is able (subject to the preservation rules) to pay benefits either by way of pension or as a lump sum.

However, where there are individual trustees, the SMSF must, at least initially, ensure that the governing rules of the fund provide that the sole or primary purpose of the fund is the provision of old-age pensions. Note that this does not necessarily mean that the fund cannot pay lump sum benefits to members.

Limited liability of corporate trustee

An SMSF with a corporate trustee also provides greater protection from liability in the event that the trustee of the SMSF is ever sued (e.g., in the event that a third party is injured on property owned by the SMSF).

For the above reasons, it is generally suggested that an SMSF have a corporate trustee, rather than individual trustees, notwithstanding the additional costs and administrative requirements that may then be applied.

Finally, it is generally more appropriate for an SMSF to have a sole purpose SMSF corporate trustee, so that the trustee never has to establish which assets it holds in its capacity as trustee of the SMSF (which could be costly and time-consuming). Also, a reduced annual ASIC fee applies for sole purpose SMSF trustee.

 

Employers - Don't Be Late With Your Super Guarantee Payments...200% Penalties!!

Quick Summary:

Super Guarantee Contributions on behalf of employees should be paid to the Super Funds concerned or the Medicare Clearing House as appropriate by 28 October.

If that date is missed then a Super Guarantee Charge Statement must be lodged with the Taxation Office by 28 November.

It is too late to pay the Super Fund direct after 28 October. If you do, however, you are still required to lodge a Super Guarantee Charge Statement plus Interest and Administration Fees.

The Real Danger:

If you fail to lodge the Super Guarantee Charge Statement by 28 November then the following penalties will apply:

• Interest
• Up to 200% of the amount of the charge payable

NOTE: This applies to working Directors and Shareholders too!!

ACTION: PAY EMPLOYEE SUPER GUARANTEE CONTRIBUTIONS BY 28 OCTOBER.

Please carry forward this note for all future empolyee super contributions.

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Perisher Blue - Great Deal on 2012 Season Pass

In a season of so many 'firsts' for Australia's favourite ski resort Perisher, today marks yet another one with the launch of its brand new 2012 Freedom Pass. For only $699, the new Freedom Pass gives snow goers unbelievable value and flexibility allowing them to enjoy Perisher when they want, as much as they want, all season long.

With limited availability, the 2012 Freedom Pass goes on sale on Sunday, 4 September on-line until Thursday, 3 October unless sold out prior. The Freedom Pass accommodates every skiing and snowboarding need - from flying weekend visits to extended stays.

To secure a Freedom Pass, a $199 deposit is payable now with the remaining $500 on 1 May 2012. The special bonus of securing a Freedom Pass now is that Freedom Pass-holders will receive one day FREE skiing from 5 September this season as well, saving $109 right away.  

For those looking for a great deal on Skitube, the Freedom Pass Skitube option only costs an additional $60 per adult and $20 per student - a saving of $190 and $120 respectively from 2011 prices.

And if that wasn't enough to tempt any snow-goer; with a 2012 Freedom Pass, guests can also take advantage of the opportunity to purchase a 2013 Freedom Pass for the same amazing 2012 price.

Encouraging snow lovers across Australia to take advantage of this unbeatable offer, CEO of Perisher, Peter Brulisauer says: "The Freedom Pass is all about providing great value and ultimate flexibility to our loyal customers, giving them the freedom to enjoy Perisher when they want, whenever they want, all season long."

Freedom Pass-holders will not only benefit from skiing and boarding four resort areas, seven mountain peaks, 47 lifts and 1245 hectares of terrain whenever they want at a great price, they will enjoy heaps of special discounts. If you love the snow you can't afford to miss out on this fabulous opportunity!

The Perisher Freedom Pass also includes 15% discount on one day lift tickets (including Skitube) for friends and family in 2012, a 15% discount at Perisher-owned food and beverage outlets and at Slopestyle Mountain Sports in 2012. On top of that, you can stay at the Station from only $79 per night during the 2012 season - and heaps more. Yes, on top of this add in free Night Skiing and Boarding, plus Free First Tracks Mornings as well! The Freedom Pass is the best way to plan for a great value 2012 winter at Perisher.

This is a strictly limited offer and will sell out fast. Available until 3 October 2011 unless sold out prior. To find out how you can get your hands on a Freedom Pass and for further information, simply visit the Perisher website (www.perisher.com.au) from 4th September.

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Project Wickenby: Off Shore Schemes

With the combined effort of eight government agencies, unprecedented international cooperation and sophisticated technology, Project Wickenby is getting results.

The Project Wickenby cross-agency task force consists of eight federal departments and agencies, including the Australian Taxation Office, Australian Securities and Investments Commission, Australian Crime Commission and the Australian Federal Police. 

The task force works hard to make sure the majority of the community who do the right thing have confidence that those who try to avoid or evade paying their share of tax are brought to account.

Project Wickenby is an integral part of the Australian Government's fight against tax evasion, avoidance and crime. In particular, Project Wickenby addresses the abusive use of secrecy havens which includes investigating offshore schemes that involve false deductions and concealed income and gains.

If you have any offshore income or assets, make sure you declare it. If you don't declare, you could face heavy penalties of jail time. It's not worth the risk.

As at 31 July 2011, Project Wickenby has resulted in 20 convictions, and more than $1.1 billion in tax liabilities raised.

In 2010-2011 two brothers were each sentenced to two years and seven months jail following investigations into the use of tax haven structures in Vanuatu. Former co-directors of a Sydney company, the pair used illegal 'round-robin' schemes to transfer money to an overseas account and then have it returned 'tax free' to their personal accounts, disguised as a loan. They will each serve 16 months in jail before being eligible for parole.

In the first money laundering conviction under Project Wickenby, a NSW man was sentenced to eight-and-a-half years jail after he was convicted of money laundering and tax fraud. This followed an investigation into his use of offshore tax structures. He will serve a minimum of four years and nine months jail before being eligible for parole.

Commissioner of Taxation, Michael D'Ascenzo said the longer jail sentences sent a clear message: if you do the wrong thing you will get caught and will likely do time for the tax crimes you have committed.

If you have information that might help the task force, you can call them on 1800 306 377.

Click here for more information on Project Wickenby.

 

Natural Disasters and Your Home: Are you Insured?

Having your home damaged or destroyed in a natural disaster is devastating. While these events are usually impossible to predict, one thing you can control is your insurance.

Storm Insurance
While insurers generally cover storm damage, the level of cover varies. Unfortunately, some people find that their claims will not be paid and end up paying the repair costs themselves. Flood cover is not offered in most home and contents insurance policies.

If you already have home and contencts insurance, check:

• If you're covered for storms, floods and flash floods and how the insurer defines each event
• How much you're covered for - ask what is and isn't covered if you're not sure
• If your cover is enough as repairs can cost more than you think

If you're not happy with your current level of cover, talk to your insurer and see what they can offer. You can also shop around for a policy that's better suited to your needs.

Floods and Cyclones
January and February 2011 saw many parts of Australia impacted by flooding and Cyclone Yasi.

If you have been affected by a flood or cyclone and want to know what you should do about home insurance you should:

• Contact your insurer to lodge a claim. Do this before you start any major repairs.
• Take photos before cleaning up and make a list of everything that has been damaged to assist in the claim process.
• Consider removing water and mud-damaged possessions. Carpets and soft furnishings can be removed from the building as part of the clean up.

Don't worry if you're insurance documents have been lost or damaged due to the flood as insurance companies keep records electronically. You can ask your insurer to send you a copy of your policy.

Bushfire Insurance
Wherever you live, your home insurance needs to be enough to cover the costs of rebuilding your home. This is particularly important if you live in an area prone to bushfires.

One person who lost their home in the Canberra bushfires in 2003 and who thought they had enough insurance told us: "We now have a mortgage of $140,000 when we owned our home outright before." And it is estimated that 13% of homes that require reconstruction or significant repair from the 2009 Victorian bushfires were not insured.

Risk of Underinsurance
You are considered to be underinsured if your insurance covers less than 90% of the rebuilding costs.

You could be underinsured because:

• It's hard to estimate what it costs to rebuild a home
• Your insurance policy may be old (more than 3 years) and you may not have updated the level of cover needed
• You may have completed renovations which increase the value of your home

When working out how much cover you need, consider the possibility that your whole house could be destroyed, for example, by a bushfire or other natural disaster.

Policies with the lowest risk of underinsurance are 'total replacement' policies, where the insurer agrees to pay unlimited replacement costs.

Whatever type of home insurance policy you may have, there is always a risk of underinsurance. The golden rule is to get enough cover for the worst case scenario.

Contact us for more information.
(Downloaded from the ASIC MoneySmart website)

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Yes, No, Maybe: When does a De Facto Relationship exist?

There is no single test for deciding whether or not a couple are in a de facto relationship. The decision may well depend on the reason you need to know.

Supporters of marriage always call it “an institution”. But as the comedians point out – who wants to live in an institution? There are sufficient numbers of people who don’t want to get married to make “living together” a preferred status to formal marriage.

But when you’ve been ‘living together’ long enough you may become a virtual marriage – traditionally called “a de facto marriage” or “de facto relationship”.

In the old days such arrangements were disregarded by governments as being morally reprehensible. Whether it’s the governments or the morality that’s changed, they are no longer so considered and now most State and Commonwealth legislation that needs to do so mentions de facto relationships.

The problem is that there are so many pieces of legislation where the term ‘de facto relationship’ is used there is the real chance that the definitions differ for different purposes.

Here are a few FAQ’s about when and whether a de facto relationship exists.

1Q    Is there a standard definition of the term ‘de facto relationship’?

1A    No.  Definitions appear in the NSW Property (Relationships) Act, the Commonwealth Interpretations Act, the NSW Interpretations Act, the Commonwealth Superannuation Industry (Supervision) Act, the NSW WorkCover Act, the Commonwealth Family Law Act and the Commonwealth Social Security Act (although in the last case you become ‘a member of a couple’).  The term is used in the NSW Succession Act by reference to the definitions in the Interpretations Act.

2Q    When is a de facto relationship likely to exist?

2A    All the Acts except the SIS Act require that

• the couple are not legally married to one another
• they are not related by family, and
• they are living together on a genuine domestic basis.

The SIS Act requires that

• they have a close personal relationship
• they live together
• one or each of them provides the other with financial support; and
• one or each of them provides the other with domestic support and personal care
  

3Q    If two people live together for 2 years are they automatically in a de facto relationship?

3A    The 2 year rule is mentioned in s.90SB of the Family Law Act but is only one of a number of other criteria.  If the couple have a child or one of the parties has made a serious financial contribution to the relationship then the time may be reduced.  The 2 year rule does not appear in any other legislation although the duration of the relationship is a factor in all definitions.

4Q    What are the other criteria that the courts look at to decide?

4A    All the Acts share the following criteria to decide whether or not a couple are in a de facto relationship:

• the duration of the relationship
• whether a sexual relationship exists
• the ownership, use and acquisition of property
• the degree of mutual commitment to a shared life
• the care and support of children
• the reputation and public aspects of the relationship.
  

All of the Acts except the SIS Act include

• the degree of financial dependence or interdependence and any arrangements for financial support between the parties, and
• the nature and extent of common residence.
  

The SIS Act on the other hand refers to:

• the degree of emotional support
• the extent to which the relationship is one of mere convenience, and
• any evidence suggesting that the parties intend the relationship to be permanent
  

5Q    Can a couple be in a de facto relationship even if one of them is legally married to someone else?

5A    Yes.

6Q    If I am in a de facto relationship what are my rights?

6A    Your rights include at least the following but this list is not meant to be exhaustive.

1. You may be entitled to be considered in the Will of your deceased partner and to make a claim against the estate if you have not received a reasonable amount from that estate.
2. You may be entitled to a share of the intestate estate of the deceased partner (ie if they have not left a Will)
3. You may be entitled to compensation under workers compensation legislation if the deceased partner dies during the course of their employment
4. You may be entitled to social security as a spouse under the Social Security Act
5. You may be entitled to your partner’s death benefits from their superannuation fund
6. You may be entitled to a property settlement, maintenance, child support and child access rights under the Family Law Act following the termination of the relationship.

If you have any questions in regard to the above article, please contact TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.

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Investing in property at home and overseas - What are the risks?

Buying a property to rent out is a popular form of investment. Houses and units are easier to understand than many other forms of investments. However, they do have some issues that you need to be aware of.

Benefits
• The property can be less volatile than shares or other investments
• You can earn rental income and benefit from capital growth (if your property increases in value over time)
• If you take out a loan to purchase an investment property the interest on the loan is tax deductible
• You are investing in something you can see and touch

Pitfalls
• Rental income does not usually cover your mortgage payments or other expenses so you may have to use your regular income to cover these costs
• A jump in interest rates will affect your return and decrease your disposable income
• There may be periods of time where you don’t have a tenant and will have to cover all costs yourself
• You can’t sell off a bedroom if you need to access some cash in a hurry
• If your property investment is your major investment then you may have little or no diversification
• If the property market goes down so does your whole investment. There are many instances where people have ended up owing more than their investment property was worth; this is known as negative equity.
• There are very high entry and exit costs.

Where to buy
• Buy in a high-growth area where there is potential for capital gains. Read the newspapers regularly to pinpoint the up and coming suburbs
• Look for properties that will appeal to tenants e.g. properties with a view or are close to shops, schools and transport
• Research recent sale prices to give you an idea of what you can expect to pay for property in the same area
• Find out about the vacancy rates in the neighbourhood. A high vacancy rate may indicate a less desirable area. This may make it harder for you to rent your property and may make it difficult to sell in the future.
• Think about changes in the suburb that will affect future prices. Things like planned developments or population changes can affect the future value of a property.

Costs
Buying, selling and managing an investment property can be costly and will affect your return. When you buy a property, you will have to pay for lots of extras on top of the purchase price. Costs may include:
• Stamp duty
• Conveyance fees
• Legal charges
• Search fees
• Pest and building reports.

As the owner, your costs may include:
• Council rates
• Water rates
• Insurance
• Body corporate fees
• Land tax
• Property management fees etc.

Risks with overseas property investing
Investing in overseas property is more risky than investing in property in Australia. It is much more difficult to make sure the investment suits your needs if you don’t have local knowledge and you can’t regularly inspect the property.

ASIC has received complaints about promoters who are encouraging Australians to invest in the United States property market. If you’ve been ‘invited’ to invest in a supposedly ‘cheap’ overseas property, ask yourself why they need someone in Australia to invest? Why aren’t savvy locals investing? Chances are it’s a dud investment.

Here are some things to consider if you’re thinking about investing in property overseas:
• Good tenants and good property managers are hard to find, especially when you’re removed from direct contact.
• Expensive renovations and repairs may be needed, especially if the property is in a location prone to squatters and vandalism. Buying property sites unseen is a big risk.
• You must factor in Australian tax laws, local property taxes, insurance, management costs, and ongoing repairs. There are lots of hidden costs that the promoter may not tell you about.

Investing in property is a good way to grow your assets. As with other types of investments, seek professional advice before you commit. 

Click here for more information on investment property.

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Reforms to Car Fringe Benefits - How will it affect you?

The government has enacted legislation which changes the statutory formula method to calculate car fringe benefits.

The legislation applies to all car fringe benefits after 7.30pm Australian Eastern Standard Time (AEST) on 10 May 2011; unless it can be proven that there was a pre-existing commitment in place to provide a car. A commitment occurs when a financially binding decision to acquire a car has been made and that decision is binding on one or more of the parties.

All pre-existing commitments will remain under the old statutory rates unless there is a change made that would amount to a new commitment.

Refinancing a car, altering the duration of an existing contract, or changing employers after 7.30pm AEST on 10 May 2011 are considered new commitments, and will result in the new arrangements applying.

The legislation replaces the current progressive rates with a flat statutory rate of 20% that applies regardless of the distance travelled. For new commitments, the flat rate will be phased in over four years, unless the employer chooses to skip these transitional arrangements and move straight to the 20% rate. However, if the employee is disadvantaged by the employer's decision, employee consent is required.

Employers will still be able to use the operating cost (or log book) method, which ensures that any business use of the car is excluded from the taxable value of their car fringe benefits.

Employers and employees who seek to end existing contracts early and immediately enter into new contracts just to get the benefit of the new arrangements may be caught by the general anti-avoidance provisions.

For more information, please click here.

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Superannuation Scams

Scammers:
An offer to help you get your superannuation money early might seem like a great idea. But if you agree to it you could end up in a lot of trouble.

Accessing your super before age 55 (at the earliest) is illegal except in very limited circumstances. Don't be tempted to accept an illegal offer. Find out how super scams operate so you can protect your retirement savings.

How super scams operate:
The scammers say they can withdraw your super or move it to a 'self-managed super fund' so you can pay off your debts or use the money for something you really want.

Once your super has been withdrawn or transferred, the scammer then takes a large commission or may even steal the entire amount for themselves.

By agreeing to the scam, you risk losing your hard-earned super savings. You may also unintentionally get caught up in tax penalties as a result of taking your super early. The scammers may even get you to sign false statements, exposing you to fines.
Please click here for more information about superannuation scams.

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Self-Managed Super

For many Australians, super is one of the biggest investments, if not the biggest investment, they will ever have. That's why most people keep their super money in professionally managed super funds.

However, some people want the hands-on control that comes with a self-managed super fund. Of course, with added control comes added responsibility and workload.

Self-managed super funds can be suitable for people with a lot of super and extensive skills in financial and legal matters. You must be prepared to research and track your super investments regularly if you want to manage it yourself. Super is your investment for your retirement, so don't rush in.
Please click here for more information about self-managed super.

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Keeping Track & Lost Super

Have you kept track of all your super? If you've changed jobs a lot, or done casual or part-time work, you may have lost track of some super.

If a super fund 'loses' you - for example, if you've changed address and not informed them - the fund may transfer your super money into an eligible rollover fund, which often have very high fees.

You can find lost super by using the Australian Taxation Office's (ATO's) free online search tool, SuperSeeker, or by phoning 13 28 65. All you need is your:
- Name
- Date of birth
- Tax file number

'Unclaimed' super is different from lost super. Your super money is 'unclaimed' if you are over age 65, no contributions have been made for at least 2 years and your super fund cannot contact you.

You can find unclaimed super by phoning the ATO on 13 10 20.
Please click here for more information about lost and unclaimed super.

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Identity Fraud

According to a 2007 Australian Bureau of Statistics survey on personal fraud, half a million Australians have experienced some form of identity fraud. Unfortunately, it has become very easy for someone to steal your personal details and carry out illegal activities in your name.

However, you can take steps to protect yourself from identity fraud by following the tips below. If you think your personal information has been stolen, contact the police immediately.

Identity fraud is a type of fraud that involves the theft of your personal information including your name, date of birth, address and other details. Fraudsters then use this information, for example, to open bank accounts, obtain credit cards, start an illegal business or apply for a passport. Your details may also be used to commit serious crimes, such as money laundering and even terrorist acts.

Identity thieves are after everything that contains your personal information: bank and credit card statements, bills, driver's licence, passport, investment reports, superannuation records, storage media such as CDs and USB devices, and any documents that contain your tax file number.
Please click here for more information about identity fraud.

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