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Top Tax Tips – 8 August 2018

Are you entitled to claim fuel tax credits?

Please ensure that fuel tax credit (FTC) claims are made at the correct rate because the fuel tax credit rates have increased from 1 August 2018.  FTCs are calculated on the amount of fuel tax payable and the type of fuel (petrol, diesel, kerosene, blended fuels) used.  FTCs are available for vehicles with a gross vehicle mass exceeding 4.5 tonnes that travel on public roads.  FTCs may also be available for eligible business usage of machinery, plant, equipment and light vehicles travelling off public roads or on private roads.  Simplified fuel tax credit rules apply for claims of less than $10,000.

We would be pleased to assist with making FTC claims as well as reviewing whether correct rates for claiming FTCs have previously been used.

Streamlined superannuation release process to pay additional assessments

Ordinarily, taxpayers can only be paid from their superannuation fund if they reach certain conditions of release (e.g. turned 65, turned 60 and retired, reached preservation age and retired with no intention to be gainfully employed, has permanent incapacity or has a terminal medical condition).

However, as mentioned in a previous top tax tips, an individual has the option to obtain reimbursement from their superannuation fund to pay for additional assessments arising from:

  • excess concessional and non-concessional contributions (i.e. contributions exceeding the concessional cap of $25,000 or non-concessional cap of $100,000 a year); and
  • Division 293 assessments (i.e. 30% tax on contributions of individuals earning more than $250,000 a year).

A release authority must be prepared to receive such a reimbursement.  The process of applying for a release authority has been simplified from 1 July 2018.

Please speak to your Nexia Edwards Marshall NT Adviser so that we can assist you in applying for a release authority from the ATO to enable you to withdraw money from your superannuation fund to receive reimbursement.

Main residence CGT exemption: Parents living in a separate unit on your property

Generally, an individual taxpayer selling a home that was used as the individual’s main residence, will not pay any capital gains tax on the profit from such a sale.

However, if there are two accommodation units on a single property – for example where the individual taxpayer lives in one unit and the taxpayer’s sick and elderly parents live in the second unit – the sale of the property containing the two units will only qualify for a full main residence exemption if the units are used together as a single place of residence of abode.

The two units may possibly qualify as a single place of residence if the lives of the taxpayer and parents have been integrated sufficiently (usually indicated by a high level of involvement in caring for elderly sick parents and if units are connected and close to each other).

Because a taxpayer’s specific facts and circumstances may affect whether more than one unit of accommodation can qualify as a single place of residence (i.e. there is no simple “checklist or tick the box” answer to such a question), we would recommend that you speak to your Nexia Edwards Marshall NT Adviser so that we can assist in determining whether such a transaction would qualify for the main residence exemption.

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 Adviser.

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

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