BRM Holdich E-News

14 October 2014

ATO Focus

Rental Property Deductions

If you are thinking of buying a rental property or renting out your current property you need to understand your record-keeping and tax obligations.

The ATO is increasing its focus on rental property deductions.  Common errors that the ATO have identified in the tax returns of rental property owners are:

  • Claiming rental deductions for properties that are not genuinely available for rent
  • Incorrectly claiming deductions for properties only available for rent for part of the year, e.g. holiday home
  • ncorrectly claiming structural improvement costs as repairs when they are capital
  • Overstating deduction claims for interest on loans related to the rental property

Please don’t hesitate to contact our office to discuss any issues regarding your rental property.

Project DO IT: Disclose offshore income today

Taxpayers with undeclared offshore assets or income are running out of time and need to act soon if they want to take advantage of the opportunity provided by the ATO for voluntarily disclosure.

Announced in March 2014 by the Commissioner, the Project DO IT initiative covers amounts not reported or incorrectly reported in tax returns, including:

  • foreign income or a transaction with an offshore structure
  • deductions relating to foreign income that have been claimed incorrectly
  • capital gains in respect of foreign assets or Australian assets transferred offshore
  • income from an offshore entity that is taxable in your hands
  • Offshore deductions relating to domestic income.

Taxpayers have until 19 December 2014 to fill in the necessary forms and avoid steep penalties and the risk of prosecution for tax avoidance.

Please contact either Aaron, Lisa or Scott if you think this may affect you.

Tax Update

MMRT Repeal and Other Measures

On 5 September  the MMRT repeal was given Royal Assent.  This repeal directly affect small business as it alters the instant asset write off and simplified depreciation measures.  In the 2013 financial year small businesses were able to write off depreciating assets costing less than $6,500 in the income year that the asset was used or installed ready for use.  Other assets could be depreciated in the general small business pool at a rate of 15% in the first year and 30% after that.

From 1 January 2014, the threshold changes and only assets costing less than $1,000 and were used or installed ready for use after 31 December 2013 will be eligible for immediate write-off.  Assets costing $1,000 or more will need to be depreciated in the general small business pool.

Assets costing less than $6,500, bought and installed ready for use between 1 July 2013 and 31 December 2013 will still be eligible to be immediately written- off.

In anticipation of this change in legislation we have prepared our clients financials to date based on the new legislation.  This means that any work that has been lodged for 2014 does not need to be amended. 

Capital Gains Tax Reporting

We remind you to please talk to us about any assets that you’ve sold in the year as taxpayers are now required to report where they have applied a CGT concession or rollover, including the sale of non-taxable assets such as the family home.  For example, the family home is exempt from CGT but the ATO is using this information to cross reference with land titles records to ensure concessions have been properly applied.

Stay Smart Online

Facebook Privacy Checkup tool for posts, apps and profile

Earlier this month, Facebook enabled a new ‘Privacy Checkup’ tool, giving you clearer information about the privacy settings it offers for your posts, apps and personal information.

Privacy Checkup is intended to help simplify some of the most important privacy settings affecting information you publish and retain on Facebook. You should take the opportunity to examine the settings for your account.

Here is a link that will help you navigate this new tool.

BRM Holdich Update

We are delighted to let you know that Melissa Poulson has completed her Chartered Accountants Program and has been admitted as a member of the Institute of Chartered Accountants in Australia and New Zealand.

Melissa is an integral member of our team, she commenced with us in January 2011, and many of you will know her from her work with you on self-managed superannuation funds, accounting, tax, ASIC compliance and other business advisory services.

Congratulations Melissa CA.

Important: This is not advice.  Clients should not act solely on the basis of the material contained in this Bulletin.  Items herein are general comments only and do not constitute or convey advice per se.  Also changes in legislation may occur quickly.  We therefore recommend that our formal advice be sought before acting in any of the areas.  The Bulletin is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our prior approval.

 

BRM Holdich
Level 8, 420 King William Street
Adelaide SA 5000

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