Self-managed super funds are rushing to sell property before tax changes that cleared parliament and start on July 1. SMSFs have invested in property in recent years, taking advantage of favourable tax rules; many business owners lease their premises from their self-managed funds. As values have surged in the commercial property boom, many SMSFs will have balances above the $1.6 million. Balances above that amount will be hit with a 15% tax on earnings – rental income in the case of property – and a 10 to 15% capital gains tax when it comes time to sell.
There are certain behaviours, characteristics and tax issues that the ATO admits will attract its attention. Broadly, the following behaviours and characteristics may attract the ATO’s attention:
• tax or economic performance is not comparable to similar businesses
• large, one-off or unusual transactions
• a history of aggressive tax planning
• tax outcomes inconsistent with the intent of tax law
• lifestyle not supported by after-tax income
• treating private assets as business assets
• accessing business assets for tax-free private use
Sunglasses….Who can claim them? If it is necessary for you to regularly work outside or contend with the damaging rays of the sun in some way. You can claim tax a tax deductions for sun glasses each year. Employees who could claim sunglasses asa tax deductions include:
• Pilots and airline staff
• Couriers and delivery people
• Foresters and gamekeepers
• Landscapers and gardeners
• Sports professionals
• Coaches and trainers
• Outdoor recreation staff
Renting out a room is rental income This applies to rooms rented by traditional means or through a sharing economy website or app. You can only claim expenses related to the part of the house they rent out and you need to apportion the expenses accordingly. However, you can claim 100% of any fees or commissions charged by the rental facilitator or administrator. Capital gains tax may also apply if you sell the property used to generate rental income.
Salary Sacrifice & Superannuation Salary sacrifice can save you up to 66% from your income tax. Salary sacrifice is simply where you direct your pre-tax (gross) salary into your super fund instead of having it paid directly to you. Your super fund pays the super contributions tax of 15% for you instead of your normal marginal tax rate that is likely to be 19%, 32.5%, 37% or 45%.