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Top Tax Tips – 7 June

Simpler business activity statements (BAS) from 1 July 2017

From 1 July 2017, all small businesses with a GST turnover of less than $10 million will be able to report less GST information on their business activity statement (BAS) to reduce time and costs of GST record-keeping and reporting.  Such small businesses registered for GST after 19 January 2017 may start using the simpler BAS reporting method immediately.

Such small businesses will only have to inform the ATO about GST on purchases and total sales (instead of filling in a number of other labels that may not be relevant to the business).

More deductions for contributions to superannuation from 1 July 2017

From 1 July 2017, more people (e.g. contractors or employees) will be able to claim deductions for personal superannuation contributions because they will no longer need to satisfy the requirement to derive less than 10% of total income from salary or wages.

Practically this means that from 1 July 2017 all employees aged 75 or younger may claim a deduction for personal superannuation contributions provided total employer and employee contributions do not exceed the $25,000 concessional contributions cap.

Compliance reviews and $1.6 million transfer balance cap

The ATO generally will not conduct compliance reviews if members of self- managed superannuation funds (SMSFs) take action before 1 July 2017 to remove any excess money from their retirement balance in excess of the $1.6 million transfer balance cap that applies from 1 July 2017.

This commutation can be done either by rolling over the excess into accumulation phase (where earnings will now be taxed at 15%) or withdrawing the excess from the SMSF as a lump sum payment (where earnings will now be taxed at the member’s marginal tax rate).

Because SMSF accounts are only usually finalised after 30 June, a member may not precisely know the value of their retirement balance at 30 June 2017 and may therefore not know the precise amount of excess that will have to be commuted.

Therefore, as a concession, the ATO will not review a commutation that specifies a written methodology to calculate the precise amount (even if the precise amount can only be ascertained after 30 June 2017 based on historical data).  An example of an ATO acceptable commutation would be where the trustee makes a written request before 1 July 2017 to commute “amounts on 30 June 2017 in excess of the $1.6 million”.  Please note that the decision to commute must be made in writing and cannot be revoked.

Regrettably, the new superannuation rules coming into effect on 1 July 2017 are complex.  We would be pleased to assist you with complying with the new rules that apply to members of all superannuation funds, not just self-managed superannuation funds.

How can Nexia Edwards Marshall NT help you?

For any questions or to discuss any of the above in relation to your personal situation, please contact Sarah McEachern or your Nexia Edwards Marshall NT Advisor.

The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall NT. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Advisor.

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