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2018 Changes / Key Announcements

Below is a summary of the changes to be aware of and announcements that will potentially affect you for the year ending 30th June 2018 or will come into effect as of 1st July 2018.

1. Personal Income Tax Rates

2017/2018 Financial Year

(plus 2% Medicare levy where applicable)


*There is no 2% budget repair levy from 1st July 2017.

2018/2019 Financial Year

(plus 2% Medicare levy where applicable)


*It is proposed from 1st July 2022 that there will be an increase in the tax thresholds to reduce the tax paid by taxpayers.


Note: The low income offset is $445. This offset will reduce by 1.5 cents for every $1 of taxable income over $37,000. It phases out when the taxable income is $66,667



2. Medicare Levy – Low Income Threshold

For the 2017/2018 income year, Medicare Levy will be incurred when the incomes are above:


  • Individuals                 $21,980
  • Families                     $37,089


Plus $3,406 for each dependent child.


The Medicare levy will now stay the same at 2.0% from 1st July 2019.

 

3. Motor Vehicle – Statutory Formula

A) FBT for Business


The Statutory Formula method to calculate the taxable value of the private use (Fringe Benefit) of a vehicle is a flat 20% statutory rate of the cost of the car. It is no longer based on kms travelled per year.

Important Note: Keeping a valid 3 month logbook is extremely important!


B) Cents per KM for Individuals


The Motor Vehicle Statutory Formula claim for the cents per kilometre for individuals will stay at 66 cents per kilometre for 30th June 2018. There is only one single rate for all engine sizes. Individuals will only be able to claim cents per kilometre method or logbook method. You can no longer claim 12% of original value method or one third of actual expenses method from 1st July 2015.

 

4. Superannuation Contributions (concessional)

The maximum amount that taxpayers can contribute into superannuation as concessional contributions are:


Year ending 30th June 2018             Year ending 30th June 2019

Age under 49        $25,000 max            Age under 49            $25,000 max

Age 49 and above    $25,000 max            Age 49 and above      $25,000 max


Important Notes:


  • From 1st July 2017, all individuals under the age of 75 can claim an income tax deduction for personal superannuation contributions. There will be no more 10% test to claim a tax deduction for personal contributions. Therefore, partially self-employed and partially employed (wages) and individuals whose employers do not offer salary sacrifice arrangements will benefit from proposed changes. Once you reach 65 years of age, you must satisfy the work test.
  • From 1st July 2018, individuals with a superannuation balance of less than $500,000 can make additional concessional contributions if they have not used all their cap in the previous 5 years, on a rolling basis on unused amounts accrued from 1st July 2018.
  • From 1st July 2019, an exemption from the work test for voluntary contributions to superannuation for people aged 65-74 with superannuation balances below $300,000 will be introduced.
  • From 1st July 2019, the government will increase the maximum number of allowable members in new and existing SMSF’s from four to six.

 

5. Superannuation Contributions (non-concessional)

The non-concessional contribution cap (contributions for which you do not claim an income tax deduction) is:


2017 – 2018 Income Year                  $100,000

2018 - 2019 Income Year                  $100,000


People aged under 65 years may be able to make lump sum non-concessional contributions of up to three times their non-concessional cap over a 3 year period (lump sum $300,000 in 2017/2018)


Important Notes:


  • From 1st July 2017, non-concessional contributions can only be made if your total superannuation balance is under 1.6million.

 

6. Superannuation Changes


  1. From 1st July 2017, the government has removed the tax exemption on earnings of assets supporting Transition to Retirement income streams, being income streams of individuals over preservation age but not retired. The earnings will be taxed at 15% and the change is proposed to apply irrespective of when the Transition to Retirement commenced.


2. From 1st July 2017, the government has introduced a $1.6million superannuation transfer balance cap on the total amount of accumulated superannuation an individual can transfer into pension phase. Under the proposed changes:


  • Subsequent earnings on this pension balance will not be restricted
  • If an individual accumulates amounts in excess of $1.6million they will be able to maintain this excess amount in accumulation phase account (where earnings will be taxed at the concessional rate of 15%)


Important: fund members in pension phase with balances above $1.6million will be required to reduce this balance to $1.6million by 1st July 2017.


  1. From 1st July 2017, the low income spouse superannuation tax offset income threshold for low income spouses will increase to $37,000 (from $10,800). The offset will phase out when income reaches $40,000. The low income spouse offset provides up to $540 per annum when $3,000 is contributed into your spouse’s superfund.
  2. From 1st July 2017, First home buyers can voluntarily contribute up to $15,000 into Super ($30,000 in total). The contributions must be with existing concessional and non-concessional caps. From 1st July 2018 these contributions can be withdrawn (plus earnings) for a first home deposit.
  3. From 1st July 2018, people aged 65 or over can make non-concessional contributions into superannuation of up to $300,000 from proceeds of selling their home. These non-concessional contributions will be in addition to the caps, age tests and the $1.6million balance test.

 

7. Net Medical Expense Rebate

For 30th June 2018 financial year, you can only claim net medical expenses offset on aged care, disability aids and attendant care expenses. There is no more rebate on other net medical expenses for 2017 or future years.

 

8. Minors (Children under 18 years)

Families distributing money to children from Family Trust’s will need to be aware that they can only distribute $416 tax free for 30th June 2018 year.

 

9. Additional Tax on Superannuation Contributions – High Income Earners

In the 30th June 2018 year, Individuals with income greater than $250,000 will have their super contributions taxed at 30% and not 15% (this has been in place since 1st July 2012).


Note:


  • Income is taxable income plus reportable fringe benefits, reportable superannuation contributions and any total net investment loss
  • Super contributions include super guarantee and salary sacrifice
  • The tax is payable by the individual client not the superfund however you can apply to have the money released from your superfund.

 

10. Superannuation Guarantee

From the 1st July 2018, the SG rate will stay at to 9.5 per cent. This will remain until 2021 and then increases will be by 0.5 per cent each financial year until 12 per cent is reached. The proposed future increases each year are:


Financial Year      Minimum Superannuation Guarantee Rate


2017/18                                 9.50%

2018/19                                  9.50%

2019/20                                  9.50%

2020/21                                  10.00%

2021/22                                  10.50%

2022/23                                  11.00%

2023/24                                  11.50%

2024/25                                  12.00%


For individuals to claim a deduction for personal contributions, you must have a valid written notice (deduction notice) advising you intend to claim a tax deduction and a written acknowledgement from the superfund.

 

11. Changes To Family Trusts And Income Resolutions

Trustees must ensure that trust income is distributed by an income distribution resolution/minute by the 30th June 2018. These resolutions must show what trust income each beneficiary is entitled to, and the streaming of franked dividends and capital gains if applicable.


Trusts with older deeds should have these reviewed to ensure the definition of income complies with current legal definitions in the tax act and that the deed allows for streaming of capital gains and franked dividends. The trust deed must also state all required beneficiaries.

 

12. Changes to Rental Properties

a. From 1st July 2017, travel expenses will be disallowed for inspecting, maintaining or collecting rent for residential rental properties.


b. From 9th May 2017, investors who purchase residential investment properties will only be able to claim depreciation on plant and equipment on new acquisitions of plant and equipment

  • Investors who purchase new plant and equipment can still claim depreciation after 9th May 2017
  • From 9th May 2017, investors cannot claim depreciation on any plant and equipment that was purchased with the property or was used previously for private use
  • Existing property investors, before 9th May 2017, can continue to claim depreciation
  • All investors can continue to claim the depreciation on the building costs from 9th May 2017


c. From 1st July 2019, the government will deny deductions for expenses associated with holding vacant residential or commercial land, including interest on finance for the acquisition of the land. Deductions for expenses associated with holding land will be available once a property has been constructed, it has received approval to be occupied and is available for rent. Denied deductions will not be able to be carried forward for use in later income, however, denied deductions can be included in the cost base of the land.

 

13.  Changes To Private Health Insurance Rebate And Medicare Levy Surcharge


The private health insurance rebate is now income tested and the Medicare levy surcharge will be increased based on your income if there is no appropriate private hospital cover for the year. The following table summarises the changes to the private health insurance (PHI) rebate and the Medicare levy surcharge based on the income levels from the 1st April 2017 (the rebate % has decreased from last year):


(For families with more than one dependent child, the relevant threshold is increased by $1,500 for each child after the first)

14.  Change To Depreciation

Small businesses with aggregate annual turnover of less than $10 million can immediately deduct assets they start to use or install ready for use, provided the asset costs less than $20,000 (GST excl). This will apply for assets acquired and installed ready for use at 30 June 2018. Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed in the small business simplified depreciation pool (‘the pool’) and depreciated at 15% in the first income year and 30% each income year thereafter. The pool can also be immediately deducted if the balance is less than $20,000 over this period (including existing pools). It is proposed that this concession is to extend until 30th June 2019.

Note: this is for small business entities, not employees or rental properties

 

15.  Increase Small Business Entity Turnover Threshold

For 30th June 2018 and 30th June 2019, the Small Business Entity (SBE) turnover threshold is $10million. This will allow businesses (with turnover less than $10million) to access:


  • Lower (27.5%) corporate tax rate (businesses with $25million turnover can access this)
  • Simplified depreciation rules (including immediate deduction for an asset purchased costing less than $20,000 until 30th June 2019)
  • Simplified trading stock rules if their stock has changed by less than $5,000
  • Option to account for GST on cash basis


Note: the $2 million turnover threshold will be retained for small business capital gains tax concessions.

 

16.  Higher Education Loan Programme (“HELP”) & Trade Support Loan (TSL) – repayment thresholds

For 2018/2019 the threshold and repayment rate to pay back debt is:

Repayment Income                      Repayment Rate

Below $42,000                         Nil

$42,000 – $44,520                                         1.00%

$44,520 - $47,191                                          1.50%

$47,191 - $50,022                                          2.00%

$50,022 - $53,024                                          2.50%

$53,024 - $56,205                                          3.00%

$56,205 - $59,577                                          3.50%

$59,577 - $63,152                                          4.00%

$63,152 - $66,941                                          4.50%

$66,941 - $70,958                                          5.00%

$70,958- $75,215                                           5.50%

$75,215 - $79,728                                          6.00%

$79,728 - $84,512                                          6.50%

$84,512 - $89,582                                          7.00%

$89,582 - $94,957                                          7.50%

$94,957 - $100,655                                       8.00%

$100,655 - $106,694                                      8.50%

$106,694 - $113,096                                      9.00%

$113,096 - $119,882                                      9.50%

$119,882 and above                                     10.00%


Australians who have a HELP or TSL and are residing overseas, will be required to make repayments against their debt from 1st July 2017 based on their 2016/2017 worldwide income. Overseas debtors are required to update their contact details via MyGov within 7 days of leaving Australia.

 

17.  Small Business Income Tax Offset (SBITO)

For the 30th June 2018 financial year, individuals will receive a 8% tax discount as a non-refundable tax offset on business income. This includes Sole Traders, Partners in Partnership and Trust Distributions where the entity carries on a business. The entity must be a small business entity with a turnover of under $5million. The tax discount will be capped at $1,000 per individual for each income year.

 

18. Reducing the Company Tax Rate

For the 30th June 2018 financial year, the company tax rate for small businesses is 27.5% (reduction of 2.5%) for companies with aggregated annual turnover of less than $25million. Companies with aggregated turnover of $25million or above or who are not carrying on a business will continue paying tax at 30% on all their taxable income.


Note: the current maximum franking credit rate for distribution will be 27.5% for these companies in 2017/2018.

 

19. Zone Offset Change

From 1st July 2015, all FIFO (Fly In, Fly Out) and DIDO (Drive In, Drive Out) workers will not be able to claim the zone rebate for the zone they work in. The zone rebate entitlement will only relate to the zone of their normal place of residence. Taxpayers who actually reside in a zone can continue to claim the zone rebate.

 

20. Supersteam Requirements for Employers and SMSFs

Employers must make Superannuation contributions on behalf of employees by submitting payments and data electronically. Superannuation Funds (including SMSFs) must receive contributions from employers (that are not related parties of the SMSF) electronically. The start date for Superstream was 1st July 2016.


Businesses need to setup the free ATO clearing house or a clearing house with another company to arrange the Superstream compliance. SMSFs need to obtain an electronic service address and this is setup through a messaging provider. If you require help setting this up, please contact us.

 

21. Reducing Claim Period for Family Assistance Lump Sum Claims

Families that choose to wait until the end of the financial year to claim their FTB entitlement or child care benefit will have a grace period of one year. Therefore, all 2017 tax returns must be lodged by 30th June 2018 and all 2018 tax returns must be lodged by 30th June 2019.

 

Reminder of Things to Consider Before 30th June
  • Consider making the $1,000 personal contribution to qualify for the super co-contribution before the 30th June if your taxable income will be below the thresholds.
  • Consider making a spouse contribution into superannuation if you qualify for the rebate.
  • Ensure your 3 month logbooks have been kept on vehicles.
  • Make sure you have receipts for your tax deductions.
  • Review the need to sell capital assets to obtain any capital losses if you have made any capital gains during the year.
  • Obtain/prepare a summary of child support paid during the year if you are paying child support or child support you may have received, if you are receiving.
  • Businesses:


- Make sure you have odometer readings for all work vehicles.

- Super must be paid for staff by the 28th July. However to get the deduction in the 2017/2018 year it must be paid before the 30th June (or received by Superfund if paid by transfer).

- PAYG Summaries must be issued to all staff by the 14th July.

- Trust Resolutions/Minutes for all trusts must be prepared and signed before 30th June 2018.

- Businesses in the building and construction industries must lodge their payment annual reports for payments made to contractors during the year by 28th August 2018. From 1st July 2018 this will also include cleaning and courier industries.


  • Individuals:



- Home office claim – ensure you have a 4 week diary recording hours worked from home for work. Must be kept to claim home office deduction.

- Internet claim – ensure you have kept a 4 week diary recording internet usage (hours used for work/hours used personally) to support your work internet claim. This must be kept to claim home internet as a work deduction.

- Motor Vehicle deduction – ensure you keep a 4 week diary of vehicle kilometres used for work to support the tax deduction.


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Tips to avoid tax on superannuation on death

January 14, 2025
You’ve likely heard the adage: "The only certainties in life are death and taxes." While death and probate taxes were abolished in Australia by the early 1980s, a potential "inheritance tax by disguise" could still be lurking in your superannuation or pension fund… The good news? With the right planning, this tax burden is avoidable .  At Ascent Accountants, we’re here to empower you with the knowledge and strategies to optimise your financial legacy. Here's what you need to know about managing taxes on your super and leaving more for your loved ones. Why your super might be taxed after you’re gone. Superannuation funds enjoy generous tax concessions while you’re alive: Accumulation phase: Earnings are taxed at just 15%, with a reduced 10% tax on capital gains. Pension phase: Balances up to $1.9 million are completely tax-free. However, a tax trap arises when super funds are passed to non-dependent beneficiaries (e.g., independent adult children). In such cases, a lump sum death benefit can attract a tax of 15% or 30%, plus a 2% Medicare levy. On the other hand, funds transferred between tax-dependent beneficiaries, such as between spouses, are not taxed. Understanding this distinction is key to effective estate planning. Strategies to minimise or eliminate super taxes. 1. Understand the taxable component. Only the taxable portion of your super balance is subject to this tax. By assessing the taxable versus tax-free components of your fund, you can calculate the potential tax liability for your beneficiaries. For young, healthy retirees with a long retirement horizon, the tax savings from super's concessional tax environment may outweigh the risks of tax on their death. However, older retirees or those with health concerns might find the potential tax liability for beneficiaries outweighs the benefits. 2. Withdraw funds from super. If you decide the risk of tax to your beneficiaries is too high, consider withdrawing funds from the super environment. These funds can then be invested in your name or another structure. Just remember that this is a complex decision requiring tailored advice to ensure your financial security while managing tax implications. 3. Implement a re-contribution strategy. A re-contribution strategy aims to increase the tax-free component of your super balance. You simply withdraw funds with a high taxable component, then re-contribute them as non-concessional contributions. While this approach can significantly reduce the tax liability , it must be executed carefully due to restrictions like contribution caps , work test requirements (for those over 74), and total super balance limits. In some cases, contributing to a spouse’s super fund can offer additional benefits, such as improving Centrelink eligibility. 4. Nominate your estate. Funds paid directly to non-dependent beneficiaries from super are subject to the Medicare levy. By nominating your estate as the beneficiary and having funds distributed via your will, this 2% levy can be avoided. However, directing benefits via your estate has its drawbacks. It’s vital to weigh this option against alternative strategies, especially if direct beneficiary payments better align with your financial goals. 5. Appoint a power of attorney. While your will is essential, an enduring power of attorney is equally important. This person can make financial decisions on your behalf if you become incapacitated, ensuring the best outcomes for your beneficiaries. Take the next step towards financial certainty. Want to ensure your beneficiaries receive the maximum benefit from your hard-earned wealth? We specialise in helping individuals and families navigate these complexities . From re-contribution strategies to estate nominations, we provide personalised guidance to protect your financial legacy. Reach out to Ascent Accountants . Together, we can develop a strategy to minimise taxes and maximise your legacy for the people who matter most .

Interest-only loans: when are they best for you?

January 14, 2025
In the world of home financing, an interest-only loan can be a strategic choice, particularly for investors. With the high cost of mortgages impacting household budgets, an interest-only loan may provide a temporary financial cushion. However, it's essential to evaluate your unique circumstances and understand the implications of this loan type before making a decision. What is an interest-only loan? An interest-only loan allows you to pay only the interest component of your loan for a specified period, typically ranging from three to ten years. This means you won’t be reducing the loan’s principal during this period, which results in lower monthly repayments compared to a standard principal-and-interest loan. Why choose interest-only loans for investment properties? One of the key advantages of an interest-only loan is its potential tax benefits for property investors . The interest component of a loan for a rental property is tax-deductible, whereas principal repayments are not. By opting for an interest-only loan, you’re only paying the portion that is tax-deductible, which can enhance the cash flow on your investment property. For investors, this structure provides an opportunity to claim higher tax deductions. This can be particularly beneficial when managing other expenses or reinvesting in additional properties. However, the benefit largely hinges on the property’s ability to generate income and increase in value over time. Key considerations. While interest-only loans offer flexibility and immediate cash flow benefits, they come with certain risks. It’s important to thoroughly understand these factors: End of interest-only period: When the interest-only period ends, the loan will convert to a principal-and-interest loan, leading to significantly higher monthly repayments. Borrowers must be prepared for this transition to avoid financial strain. No equity growth: Since you’re not paying off the principal during the interest-only period, the loan balance remains unchanged. This means you’re not building equity in your property unless its market value increases. In the event of a market downturn, you could face the risk of negative equity. Loan servicing requirements: Lenders require documentation such as tax returns, employment verification, and statements of assets and liabilities to assess your ability to service the loan. Carefully review your financial situation to ensure you can meet repayment obligations both now and in the future. Budgeting for the future: An interest-only loan is not a permanent solution. Use the reduced repayment period wisely to build a financial buffer. Saving during this time can help you prepare for higher repayments once the principal component is added. Final thoughts. Interest-only loans can be a valuable tool for investors , especially when managed strategically. By focusing on the tax-deductible interest component and leveraging the reduced repayment period, you can optimise your investment’s financial potential. However, it’s essential to plan for the future, anticipate higher repayments , and seek professional advice to mitigate risks. With careful planning, an interest-only loan could be the key to achieving your investment goals . The Importance of professional advice. Navigating the complexities of interest-only loans can be challenging . Consulting with financial professionals is critical to making informed decisions. We can help you understand how this loan aligns with your broader financial goals, ensure you’re not overextending yourself, and guide you in structuring your investments for long-term success. Contact us today to get started.

Tips to stop overspending & start saving

January 14, 2025
Managing finances can feel like a daunting task, but taking control of your spending and starting a savings plan is not just possible — it’s empowering. Let's explore some practical tips inspired by the story of Sarah and Liam, and their journey to regain financial stability. Sarah & Liam’s financial struggles. Sarah, 36, and Liam, 38, have been married for 13 years. They started with very little and haven’t made much financial progress since. Currently, they’re facing $227,785 in debt, including their mortgage, car loans, student loans, credit cards, and medical bills. With a combined annual income of $137,000, they’re struggling to balance debt repayments and living expenses for themselves and their daughter. This is a reality many Australians face, but with the right strategies, financial freedom is achievable . Ready to start saving? 1. Set a clear budget for yourself. The foundation of financial stability is having a budget. Start by tracking your income and expenses for a month to see where your money is going. Once you know your spending habits, divide your income into categories: Needs (50%) : Rent/mortgage, groceries, utilities, and debt repayments. Wants (30%) : Entertainment, dining out, and non-essential purchases. Savings (20%) : Emergency fund, retirement, and long-term goals. Sarah and Liam realised they needed to prioritise their goals over impulsive spending. By setting a monthly budget and sticking to it, you’ll have a roadmap to guide your financial decisions. 2. Align your spending with your goals. What do you want your money to do for you? Whether it’s building an emergency fund, saving for retirement, or affording occasional family holidays, your spending habits should reflect your aspirations. For Sarah, cutting down on impulse purchases helped her align her spending with her vision of financial stability. Consider pausing before buying non-essentials and asking, “Does this align with my goals and my budget?”. 3. Automate your savings. Create good saving habits ; automation is a game-changer when it comes to saving. Set up automatic transfers to your savings account as soon as your salary is deposited. This “pay yourself first” approach ensures you’re consistently building your savings without even thinking about it. For example, Liam set up an automatic transfer of $500 per month to their emergency fund. Over time, this became a habit, helping them grow their safety net effortlessly. 4. Reduce temptation. Unnecessary subscriptions and constant exposure to marketing can derail your financial progress. These simple steps can make a huge difference: Unsubscribe : Cancel streaming services or memberships you rarely use. Declutter your inbox : Unsubscribe from promotional emails and mailing lists that tempt you to spend. Be aware of social media ads : Be mindful of how often influencers and ads push you towards impulse purchases. By unsubscribing and reducing exposure to marketing, Sarah and Liam found it easier to stay focused on their financial priorities. 5. Review & adjust regularly. Financial planning isn’t a one-time task. Review your budget and spending habits regularly. Celebrate small wins — whether it’s paying off a credit card or saving for an exciting purchase! Adjust your strategy as needed to stay on track. Some additional support goes a long way! Getting your finances under control starts with intentionality and small, consistent changes. By setting a budget, aligning spending with goals, automating savings, and reducing temptations, anyone can enjoy financial freedom.  At Ascent Accountants, we’re here to help you navigate your financial journey. Let’s make your money work for you. Reach out today to get started!

Crypto as a personal use asset & the tax you can expect

January 14, 2025
As the popularity of cryptocurrencies continues to grow, so does the complexity of understanding their tax implications. One common question we get is whether a crypto asset can qualify as a personal use asset and what that means for your tax obligations. Here at Ascent Accountants, we aim to provide you with clear and concise guidance to help you navigate this often-confusing area. What is a personal use asset? A personal use asset is something you keep or use primarily for personal purposes, such as buying items for personal use or consumption. In the context of cryptocurrency, this can include using crypto to purchase goods or services directly. However, whether a crypto asset qualifies as a personal use asset depends on how you use it and the circumstances of its acquisition and disposal. Determining if your crypto is a personal use asset. The key time for determining whether your crypto asset is a personal use asset is when you dispose of it. For example: If you acquire crypto and use it shortly after to buy personal items, it’s more likely to be considered a personal use asset. If you hold crypto for an extended period, with only a small portion used for personal purchases, it’s unlikely to qualify as a personal use asset. Your original intention when acquiring the crypto may be relevant, but it’s not the deciding factor . Instead, your actual use of the asset will determine its classification. That’s why maintaining accurate records of your crypto transactions and usage is essential. When is a personal use crypto asset exempt from CGT? If your crypto asset is classified as a personal use asset, certain tax exemptions may apply: Capital Gains Tax (CGT) Exemption : A capital gain on the disposal of a personal use crypto asset is exempt from CGT if: The crypto asset was acquired for less than $10,000. Capital losses exclusion : Any capital losses made on personal use assets, including crypto, cannot be used to offset other capital gains or carried forward to future income years. Example: Crypto asset for personal use. Michael wants to buy concert tickets that are discounted for payments made in crypto. He spends $270 on crypto assets and uses them to purchase the tickets on the same day. Because the crypto was acquired and used in a short period for personal use, it qualifies as a personal use asset and is exempt from CGT. When crypto is not a personal use asset. In most cases, crypto assets are not personal use assets when they are: Held as an investment : For example, holding crypto to sell at a favourable exchange rate. Part of a profit-making scheme : Such as actively trading crypto for profit. Used in a business : For example, accepting crypto payments for goods or services. Used as top-ups. For example, topping up prepaid debit cards or gift cards, or if a payment gateway (e.g., PayPal) is used to facilitate purchases. Example: Crypto held as an investment. Emma regularly buys crypto intending to sell at a favourable rate. After some time, he decides to use a portion of his crypto to purchase goods. Since Emma’s primary purpose for holding the crypto was investment, it doesn’t qualify as a personal use asset. Record-keeping is essential. To ensure you meet your tax obligations, it’s important to keep detailed records of: Your intention when acquiring the crypto. How and when the crypto was used. The value of the crypto at the time of each transaction. For more detailed guidance, check out this ATO resource on keeping crypto records . Here’s how we can help. At Ascent Accountants, we’re committed to helping you understand your tax obligations and make informed decisions about your crypto assets. If you’re unsure whether your crypto qualifies as a personal use asset or how tax rules apply to your situation, reach out to us for tailored advice .  By working with us, you can ensure your crypto compliance while maximising any potential tax benefits.

10 Things to Ask Your Parents: Estate Planning to Prepare for the Future

December 13, 2024
As our parents grow older, planning becomes more than a thoughtful gesture—it's a necessity. Whether preparing for a time when they can no longer manage their affairs, deciding on late-life care, or end-of-life arrangements, ensuring the following ten essentials are in order can make things easier when the time comes. 1. Prepare an Enduring Power of Attorney This legal document designates someone trustworthy to make financial and medical decisions on your parent's behalf if they become incapable of doing so themselves. Discussing and documenting who will be appointed is essential while everyone is of sound mind. 2. Update and Have Access to the Will Your parent's will is the key to handling their estate as they would want, so knowing its exact location allows you to act quickly if necessary. Ensure the document is easily accessible, valid, and up to date before it's needed. 3. List of Professionals Be sure to have a list of any professionals your parents use for their estate, including their lawyer and accountant. 4. Provide Access to Paperwork If your parents keep their paperwork somewhere, be sure to know where. If keeping the documentation in a safe, a deposit box, or with a professional, ensure that you have access to the code or the details of their representative when the time comes. 5. Update Financial and Legal Documents It's essential to ensure that your parents' financial and legal documents are up to date. This includes tax records, bank account details, and personal identification information. Keeping this documentation organised will make it easier for you to manage their affairs after they pass away, avoiding delays or complications. 6. Check Superannuation and Beneficiaries It's crucial to know whether your parents have a super account, who the non-lapsing binding death nominated individual is to handle the funds, and who the nominated beneficiaries are. Confirm the specifics and ensure that the beneficiaries are still relevant beforehand. 7. Make a List of Logins Creating a list of logins, passwords, PINs, online accounts, and parties to be notified after death will make the notification process much more manageable. Policies like life insurance should be documented, including premium details and the beneficiaries. This will prevent confusion later and ensure claims are processed smoothly. 8. Understand Assets and Debts Having a list of your parent's assets and any outstanding debts is essential in managing their financial affairs when they pass. A clear record of your parents' assets and investments may include any property, shares, bank accounts, and any other valuables or assets. Do the same for debts, and include mortgages, personal loans, credit card debt, or other financial obligations. Having a complete list of both will make it easier to handle the distribution of the estate and avoid misunderstandings. 9. Final Wishes and Health Care Preferences Ensure you understand your parents' final wishes regarding health care and end-of-life decisions are recorded. This may include having an enduring power of guardianship or an advanced health directive. One allows another person to make decisions on your parent's behalf while the other records their wishes. Any end-of-life wishes should be documented to avoid unnecessary stress or conflict when the time comes. 10. Pre-Plan Funeral Arrangements Discussing funeral arrangements and paying in advance can save the family financial stress at an already difficult time. Working with your parents to record their wishes or help them pre-plan and pay for their funeral will ensure everything is organised as they would like.

The Importance of Using a Professional to Manage Your Property

December 13, 2024
Investing in property can be a highly lucrative venture, but it requires dedication, time, and attention to detail. The key to maximising your returns and safeguarding the value of your asset lies in how well you manage the asset while protecting its value. Managing a property yourself can be overwhelming, and if you don't have the expertise or resources, you may be compromising the long-term success of your investment. That's where a professional property manager or management service can make all the difference. Why Hire a Professional Property Manager? A professional property manager offers several key benefits that make managing your property easy, efficient, and profitable while ensuring your investment thrives. A Property Manager Keeps You Compliant The rental market in Australia constantly changes. These shifts in the industry and reviews of the law can catch landlords, especially those who don't have the time to keep up and fail to realise they are not compliant. Having an experienced property manager sidesteps this issue as they must stay updated with compliance changes. Great Property Managers Bring Expert Knowledge and Experience Professional property managers have a deep understanding of the real estate market and know how to navigate maintenance, tenant selection, and property compliance issues. With years of experience in the industry, they can help you avoid costly mistakes and ensure that your property is maintained to the highest standard. Assist With Quality Tenant Selection and Retention Property managers have access to a broad network of potential tenants and are skilled at selecting those who are reliable and responsible. This reduces vacancies and provides you with a steady income stream. Provide Efficient Maintenance For Long-Term Value A well-maintained property is more attractive to tenants and can significantly improve its long-term value. A professional property manager oversees regular maintenance, repairs, and inspections, ensuring everything is in great shape. They also stay current with regulations and compliance requirements, reducing the risk of legal issues. Offer Time and Stress Management Managing a property is more than just collecting rent - it's also acting as a front line for tenants' property issues, saving the owner time. These issues may include handling tenant complaints, dealing with repairs, and managing emergencies. A property manager takes care of these tasks, giving owners the peace of mind that nothing is overlooked. The Best Property Managers Help to Maximise Your Investment A skilled property manager works to maximise your rental income. They do this by advising on a competitive rental price to minimise vacancies while selecting tenants that will keep your property in excellent condition. Their ability to handle all aspects of property management allows you to reap the full financial rewards of your investment. Secure a Quality Property Manager Get in touch with the team at Ascent Property Co to discover how our services can unlock your property investment's full potential. For more information or to get started, call Luke Langford at 0493 672 956 or Nigel Parker at 9356 8033. Alternatively, you can email Luke at luke@ascentpropertyco.com.au . Let us handle the hard work and enjoy leaving your property in expert hands.
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