Contact us

Tax Tips for 2012

by | Apr 30, 2012 | Economy, Finances, General, Taxation


The tax year is once again set to end June 30 and the budget is due for release on the evening of 8th May 2012. 
Tax planning opportunities are available now, and as soon as the budget has been released I will also send through an update of what’s new. It’s a great time to get together to review how you’ve travelled for the year and what we can do prior to EOFY.  It’s also the perfect time to get together with your Accountant to ensure you’ve done all you can before June 30.
Please find outlined below some new developments as shared by my Accountant Leiza Cole, from Accountant Sharing Knowlege: 
 

Tax Tip 1: Small Business: instant asset write off and simplified depreciation

On the 29 March 2012, the small business instant asset write off and simplified depreciation received royal assent.  Therefore in the 2012/2013 the change will enable small businesses to write-off all depreciable assets where the taxable purpose proportion is less than $6,500 in the income year in which they start to use the asset, or have it installed ready for use.
 

Tax Tip 2: Changes to Private Health Insurance Rebate and Medicare Levy

Currently holders of private health insurance receive a minimum of 30% rebate in relation to their insurance premiums. This will change from 1 July 2012, as a consequence of the Parliament recently passing legislation that will “means test” the private health insurance rebate. Therefore eligibility for the rebate will now be determined based on income (of either an individual or a family) and age. This means that if your income (or the income of a family) exceeds certain thresholds each year, the amount of eligible rebate may be reduced (or removed completely).  If you want to discuss this further with me please give me a call as individual circumstances will need to be taken into account.
 

Savings Tip 3: Review your Home Loan

For most of us our homes are our biggest assets however they very often have a home loan attached to them which takes us many years to repay.  As the debt exists for many years we end up paying thousands of dollars in interest each year.  The banks/ building societies can offer various products and rates of interest.  I suggest that we review these every few years to ensure we have the best product to meet our needs and hopefully to save us funds.  This can be a daunting task as there are so many products on offer.  I suggest talking to a mortgage broker so they can assist you with finding the best solution. 

Info Tip 4: National Names Register

If you wish to trade under a trading name i.e. a name different to your individual name or your company name, then you are required to register this name, previously with the Office of Fair Trading.
Following a recent Government announcement, it is expected that from 28 May 2012 registration of business names will be managed under a national scheme administered by The Australian Securities and Investments Commission (ASIC) replacing the current state based system where businesses are required to register in each state or territory of operation.  If you currently have a business name registered in any state or territory, the details of your registration will automatically transfer to the new national register and the due date of your current registration renewal will remain the same. If there is another business in another state or territory with the  same name as your business, you will not need to change your business name, however, an additional identifier will be applied to your business name to differentiate between same name registrations (this will be for administrative purposes only and you will not need to include the identifier in your trading name). If your business name is currently registered in multiple states, all registrations will be transferred to the new national  register. You will not be required to pay multiple registration fees, however, you can retain one registration, and either cancel the additional registrations (without incurring any fees) or allow the additional registrations no longer required, to lapse.
For all new business name registrations you will be able to register for your business name at the time of applying for an ABN. A hyperlink to the ASIC website will be provided at the end of your ABN application to allow
you to easily navigate to the online business name registration home page. Prior to registering your business name you will also be able to search the business names register to ensure the name you have chosen is not currently subject to any trademarks. It is important to note that registration of a business name does not automatically protect the name from use by others and you may need to consider registering your business name as a trademark to ensure exclusive use of your brand.
 
Fees under the new scheme:
New application for registration of a
business name for 1 year                                                                       $30
 
Application for renewal of a
business name for 1 year                                                                       $30
 
New application for registration of a
business name for 3 years                                                                     $70
 
Application for renewal of a
business name for 3 years                                                                     $70
 
These fees are less that the current QLD fee with Office of State Revenue.
 
Transitional arrangements:

  • • If your business name is due for registration prior to 28 May 2012, the state or territory authority currently responsible for registrations will send you a renewal notice which you will need to pay to register your business name. The details of your business name registration will transfer to the national register on 28 May 2012 and no further action or payment is needed until your next renewal date.
  • • If your business name is due for registration on or after 28 May 2012, ASIC will send you a renewal form to register your business name on the national register.

 

Heard about Buy-Sell Insurance but don't really get what it's all about??

by | Feb 6, 2012 | Business, Debt Management, Finances, General, Insurance & Protection

Buy-Sell Insurance – What is it all about?
Another expression used for buy-sell insurance is a business will.
Owners of a business enter into a written agreement  to plan just what will happen to their respective interest in the business should either die, become disabled or suffer a critical or terminal illness.
The agreement needs to cover off how the ‘exiting’ partner can sell their inerest in the business to the surviving partner and establish a mechanism to fund the transfer.
Why is it Needed?
Most businesses realise that they would suffer in the event of one of their key people becoming totally disbled, suffer a traumatic illnesses, injuries, or even pass away.
Problems may arise with the family of the deceased making demands for the business to be wound up, paid out their share or loans to be repaid. They may even insist on direct control over daily operationsof the business without the necessary skill set.
The estate may be forced into a ‘fire sale’ of their business interest.
If the ill business owner suffers a trauma, much uncertainty can exist over their ability to return to work leaving a heavy burden on the remaining owner, who still needs to profit share with their sick partner.
So what products are available to help out?
Death & Total & Permanent Disability cover are usually easy to insure against and can be included in a buy-sell mechanism.
Trauma insurance is also available but does raise some more complex issues.
How do you work out how much to Insure for?
Each owner needs to vale their share of the business.  I.e. A $500k business with 2 owners is likely to be $250k each, assuming equal partnership.
Current Market Value of the business is the usual way for a business to be valued and the level of cover is likely to need an annual review. Not considering appropriate values and a trigger event occuring can cause hardship in working conditions within the business, a deterioration of living standards, decrease in value or even forced closure of the business.
Other methods used to value the business may include an Agreed formula method, usually in consultation with an accountant. Any formula chosen needs to be clearly articulated in the written buy-sell agreement.
Alternately, the owners may choose an Agreed Value for the business that is justifiable, regularly reviewed & updated & arrived at in conjunction with their accountant.
 Otherwise, an independant arbitrator can be utilised to arrive at an acceptable market valuation.
Whichever method is chosen, all parties should be in agreeance and advice obtained from appropriate sources for the most suitable method to be used.

Wondering what the Markets have been up to?

Wondering if you need to Consider Business Insurance?

by | Feb 6, 2012 | Business, Debt Management, Finances, Insurance & Protection

Have you ever wondered if you need to consider some form of business insurance for your particular situation?  Been pondering the ‘What-ifs?’  Perhaps you could try asking some of the following questions to assess your own Buy-Sell Insurance needs…

  • Will the remaining business owner be happy to work with the surviving spouse or beneficiary of the deceased?
  • Can the family members of the deceased add skills to the management of the business or will they hinder the business & still insist on drawing a wage or profit share?
  • How much will the business be prepared to pay for the deceased owners’ share of the business, over how long and how will it be funded?
  •  Do you also need to consider Debt Reduction or Key Person Insurance?
  • Will the bank call in any guaranteed loans if they are concerned about the business remaining viable?
  • If yes… When will the loan need to be repaid?
  • How is the business to repay loans if an owner dies?

Once the needs of your business have been identified, the goal of the insurance is to provide a funding mechanism to help the business survive the loss of a key person.
Shareholders, Employees and Creditors are also able to see that business has demonstrated sound financial management and sensible planning.  Feel free to call the team at Wealth Planning Partners for an obligation free assessment of your particular business needs.

Wondering what the Markets have been up to?

Business Risk Insurance Planning

by | Feb 3, 2012 | Business, Debt Management, Finances, Insurance & Protection, Taxation

Every small business, SME or partnership should consider risk planning and some of the following strategies are definitely worthy of inclusion in the discussion:

  • Key Person / Key Man Insurance
  • Buy-Sell Agreements
  • Capital Gains Tax impact
  • Debt Reduction strategies
  • Business Expenses insurances

So, some of the words sound familiar but you’re not really sure what it’s all about?
A team of professionals should be considered to make sure you ‘get it right.’  Most often, a Financial Adviser, Lawyer and Accountant may need consulting.
The Adviser is there to match the product to the need of the business, the Lawyer to draft the appropriate agreements or Business Will and the Accountant is there to value the business and calculate any costs involved.
So why consider business insurances?
Every business that has two or more owners needs to have a think about what would happen to the business should one of the partners die, become disabled or suffer a traumatic illness.
Most businesses depend on a few key people to produce the results, provide capital and manage the business.  If there’s no plan, there’s likely to be significant financial hardship for the surviving owner as well as family members.
This specialised area of insurance needs to help you undertake a detailed process including the needs of the business, amount of insurances necessary, cost factor, prioritisation of needs, and underwriting the cover.
The team at Wealth Planning Partners are ideally situated to assist owners to help assess their unique business needs and establish the appropriate levels of cover required.

Wondering what the Markets have been up to?

Shane Oliver shares his Insights on China

by | Oct 21, 2011 | Economy, Finances, Investments

Oliver’s Insights –  China’s turn: 
This note provideed by AMP looks at the recent outbreak of worries about a hard landing in China. The key points are:
• Slowing exports, tight credit and a slowing property market suggest the risks regarding China have increased. Policy makers may also be slow to respond, resulting in further short-term uncertainty.
• However, so far there is no sign of a hard landing and while there are likely to be bouts of uncertainty, it is unlikely thanks to spending on social housing, solid consumer demand &and a likely easing in economic policy late this year or early next. But don’t expect a re-run of the  4 trillion Renminbi stimulus that was seen in 2008-09 as public debt is higher today and it was ultimately overkill anyway.
• Chinese shares are cheap, but require monetary easing before their fortunes turn decisively.
Read more here: Olivers-Insights – Chinas-turn

Wondering what the Markets have been up to?

Russell's October Market Pulse Update – What's going on in Greece??

by | Oct 7, 2011 | Business, Debt Management, Economy, Finances, General


Russell Investments have provided the attached economic update, which I am pleased to share with you.
 
Update from EMEA overnight:  Eurozone Crisis: Greece fears hit world markets.
John Velis, Head of Capital Markets Research, EMEA, provides his thoughts about
where the Eurozone economies might be heading.
Key issues addressed:

  • Will Greece be forced to default?
  • What is the status of the EFSF?
  • Dexia Bank liquidity crisis?
  • What is the role of ECB?
  • What is the solution and timeline of events?

So, if you’re a little concerned about what’s happening in Greece, and Europe as a whole, please enjoy the read here:   Russell Market Pulse October 2011
I’d love to hear your thoughts too… how do you think the situation will play out?  What else do you believe Policy makers should be considering?
One suggestion has been for Greece to start selling islands!!  Let me know what you think!

Wondering what the Markets have been up to?

Still a bit wary about being invested in the market??

by | Sep 5, 2011 | Economy, Finances, General, Investments

Cash still dominates many investment portfolios at the moment, indicating that Australians are still wary about investing in equities. The ongoing uncertainty facing sharemarkets has many investors spooked and is the very reason why the appetite for term deposits remains sky high.
Whilst your Adviser may understand the importance of growth assets and constantly encourage you to stay invested, you may not agree or be fully convinced.  However, maintaining some level of exposure to equities is key to diversifying returns and achieving long-term capital growth, which is critical to making sure you don’t outlive your money!
This will help ensure that investment decisions are driven by the present and future, rather than the past.
In recognition of this, Zurich Investments has developed a video for investors
emphasising the importance of growth assets within a portfolio.
Learn more in this short video:  The Importance of Growth Assets in your Portfolio