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Your 6 step guide to building a tax effective asset portfolio

An investment is tax effective if you pay less tax than an investment with the same risk and expected return. Lower tax can help your savings grow faster, but remember not to invest based on tax benefits alone.

Whether you’re starting out and wanting to make smart investment choices for your portfolio or you’ve been investing for some time and looking at new ways to make your tax more effective on existing assets, this guide will help give steer you in the right direction.

Read on for guidance on what makes some investments more tax effective…

  1. Don’t be discouraged by marginal tax
  2. Make the most of your super
  3. Managing tax on shares and property
  4. Investment bonds
  5. Be wary of ‘tax-driven’ schemes
  6. Protect your investments
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ATO: SuperStream is here for small employers

SuperStream has now started for small businesses. If your business has 19 or fewer employees, it’s time to get ready.

What is SuperStream?

SuperStream is making super contributions super simple. It changes the way you pay super for your employees. Before SuperStream, it was common to hear from employers about how difficult and time consuming it is to make multiple super contributions to multiple super funds in multiple ways. For a lot of employers, paying super took hours. SuperStream standardises this.

SuperStream is about linking electronic payments and reporting. Under SuperStream employers are able to pay super to multiple super funds in one transaction. This should reduce the time it takes to pay super to minutes and reduce payment processing costs.

You have up to 12 months to implement SuperStream. Don’t leave it to the last minute – get started now.

How to get ready

There are some simple steps you can to take to get ready.

  • You can use our handy step-by step checklist.
  • You don’t need to prepare for SuperStream alone. Contact your accounting professional, default fund or payroll provider to help you find the best solution that suits your business needs.
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ATO swoops on phoenix business

The ATO, supported by NSW and Federal Police, has made surprise visits to over a dozen sites across Sydney as part of an investigation into potentially fraudulent phoenix activity.

Recent figures show that phoenix activity costs the Australian economy up to $3.2 billion each year.

Honest businesses suffer the most, losing almost $2 billion in unpaid debts and the non-supply of purchased goods and services.

The ATO said that, if a member of the public has any knowledge or concerns about companies that may be exhibiting phoenix behaviour, they can report it online at ato.gov.au/reportaconcern or by calling 1800 060 062.

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Depreciation for farmers brought forward

The May Budget provided that from 1 July 2016. Australian farmers would be able to claim a tax deduction on capital expenditure incurred on:

  • water facilities;
  • fodder storage assets: and
  • Fencing.

Farmers would be able to fully deduct the cost of water facilities and fencing in the year they were purchased. and deduct the cost of fodder storage
assets over three years.

The Treasurer has now announced this measure will be brought forward to acquisitions of these assets after 7.30pm 12 May 2015.

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ATO warns over-claiming is easier to detect than ever

In relation to 2014/15 individual income tax returns to be lodged this year. the ATO says it will be focusing on:

  • unusually high work-related expense claims across all industries and occupations
  • expenses claimed that have already been reimbursed by employers; and
  • claims for private expenses such as travel from home to work.

it said that the ATO‘s ability to identity and investigate claims that differ from the norm is improving each year at a rapid rate.

Every return is scrutinised and it is becoming a lot easier to identify claims that are significantly higher than those claimed by people with similar
occupations and employment income,

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Practice Update July ATO is trying SMS messages to try and clear debt

ATO is trying SMS messages to try and clear debt

The ATO has advised that it is using SMS and emails tor promotional and information purposes.
They say that, if individual taxpayers receive an SMS or email claiming to be from the ATO, they can check the list of the ATO’s current activities (on its website at ATO Online Services) to verify that it’s genuine.

However, ATO messages will never ask taxpayers to reply by SMS and / or email to provide personal information. such as the taxpayers tax file number or their personal bank account number or BSB.

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Government moves to get Single Touch Payroll right

Under Single Touch Payroll, employers accounting software will automatically report payroll to the AT0 when employees are paid.

This will eliminate the need for employers to repon employee related Pay As You Go Withholding (PAYGW) in their activity statements throughout the year and employee payment summaries at the end of the year.

However. the government has advised that it has become aware that a start date at July 2016 will not be available for many businesses.

It also recognises the cash-flow implications for business or real time payments, and will therefore only be consulting further on real time reporting. with voluntary real time payments as an option.

It has asked Treasury and the ATO to consult with business and the software industry on the scope and liming tor the Single Touch Payroll initiative. with targeted pilots maybe starting from July 2016.

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