Pensions (SMSF) – here’s what you need to know…

The fund assets that support pensions in your SMSF and the income earned from those assets, enjoy concessional tax treatment only while a member is receiving the pension or income stream!

Generally, when an SMSF pension ceases, for example, on the death of a member, the exemption of pension assets from capital gains tax also ceases, as does the deceased member’s pension exemption from income tax.

However, if the fund trust deed and other documentation provides for auto-reversionary pensions, then the payment of  the pension may continue after death, to the surviving spouse!

If you have any queries or need advice then CONTACT US now at BSN & Co!

Lodgement deadline for tax returns is looming!

In the coming weeks there will be publicity regarding your income tax return lodgement for 2019/2020 by the 31^st October 2020 deadline.

However, the good news is… this doesn’t apply to those who use a registered tax agent!

If you are on a tax agent’s list prior to 31 October, generally you will have an extended deadline to lodge your 2019/2020 tax return by 15 May 2021.

Could you benefit from the extended tax return lodgement deadline?  Then don’t delay!   CONTACT US before the 31^st October 2020 deadline.

We can add you to our tax list and prepare your income tax return ready for lodgement by the tax agent deadline of 15 May 2021.

Remember, you must be on our tax list before the 31^st October deadline to get the tax agent extension!

Employer August reimbursements

The monthly business declarations to claim reimbursements for payments made to employees during August are required between 1 September and 14 September 2020.

Extension

Payments under JobKeeper have been extended to 28 March 2021 for eligible businesses (including self-employed) and not-for-profits

Tiered payment rates for JobKeeper extension periods

The following fortnightly payment rates will apply for eligible employees and business participants:

The lower rate will apply to eligible employees and business participants working less than 20 hrs/week on average from 28 September 2020 – the average hours will be based on the four weekly pay periods before either 1 March 2020 or 1 July 2020, which ever produces the higher hours

Employers will be required to nominate the payment rate for each of their eligible employees or business participant.

Changes to eligibility

• Employees’ eligibility for the JobKeeper Payment can now be assessed from 1 July 2020, rather than 1 March 2020.
• Employees can now be nominated by new employers if their employment has changed since the JobKeeper Payment began. However, they can still only be nominated by one employer at any given time.
• Employers have until 31 August 2020 to meet the wage condition for new eligible employees under the 1 July eligibility test for:

Fortnight 10 – commencing on 3 August;  and

 Fortnight 11 – commencing on 17 August 2020

Businesses can claim reimbursement for their new eligible employees between 1 and 14 September 2020, when they lodge their August monthly declaration.

Your eligible business and not-for-profit clients can still enrol at any time until the program closes.

Assessment of eligibility

Employers will be required to reassess their eligibility by reference to their actual GST turnover relative to a comparable period in 2019:

The requirement to reassess a business’ eligibility to the Jobkeeper payment from 28 September 2020 implies that if the decrease in turnover is not satisfied for the Jobkeeper extension periods then the business will be ineligible to claim Jobkeeper payments from the ATO even though the business was eligible to the Jobkeeper payment previously.

If you need assistance with JobKeeper payment enrolment or reporting, CONTACT US without delay!

PHOTO CREDIT: ATO

CASH FLOW BOOSTS

The cash flow boosts for employers are tax free payments which, nevertheless, represent reportable income for accounting purposes, but are not assessable income for tax purposes, for the recipient employer, self employed

COMPANY TAX RATES

The 2019/2020 company tax rate of 27.5% for “base rate”entities (turnover less than $25m, passive income less than 80%) falls in 2020/2021 to 26% and in the following 2021/2022 year to 25%.

EARLY ACCESS TO SUPERANNUATION

There are no tax implications for the “early access $10,000” coronavirus measures, and access now extended to 31 December 2020.

JOBKEEPER PAYMENTS

The support payments to employers and the self-employed are assessable income for employers and the self-employed, and subsequent payments of Jobkeeper to employees are also assessable.

PAYG WITHHOLDING

From 1 July 2019 payments to employees, directors, contractors are only deductible if the PAYG withholding obligations as to payment and ATO reporting have been met.

WORKING FROM HOME

The shortcut claiming method of 80c/hour available from 1 March 2020 to 30 June 2020 has now been extended into the 2020/2021 financial year, to 30 September 2020.

If you have need assistance with any of these , CONTACT US today without delay!