Super changes and full expensing 12-month extension now law
A plethora of superannuation law tweaks has recently been made (via recent legislative reforms) which include:
- Removing the $450 monthly super guarantee threshold.
- Reducing the eligibility age for making downsizer contributions from 65 to 60.
- Changes to facilitate the removal of the work test for those aged between 67 and 75 regarding non-concessional and salary sacrificed contributions. In addition, the bring-forward rule will now be available for people under the age of 75 (rather than 67, as is currently the case).
- Increasing the maximum releasable amount under the First Home Super Saver scheme from $30,000 to $50,000.
- Allowing super fund trustees to choose not to use the segregated assets method in certain circumstances.
Furthermore, the Government has also ‘made good’
on their promise to extend accelerated depreciation
with legislation passing to allow current Temporary
Full Expensing measures to continue for another
12 months (i.e., to 30 June 2023).
12-month extension of the
temporary loss carry-back measure
As announced in the 2020/2021 Federal Budget,
legislation has now passed to allow eligible
corporate entities (i.e., with, amongst other things,
an aggregated turnover of less than $5 billion) a
12-month extension to claim a loss carry-back tax
offset in the 2023 income year. Keeping and maintaining SMSF
records
Trustees of SMSFs have been put on notice
by the ATO that keeping and maintaining good
records is one of their key responsibilities and legal
obligations. Good record keeping ensures trustees
can ensure accurate and timely SMSF accounts,
audits and income tax return lodgments. SMSF – statistical overview from
2020 lodgments published
As of 30 June 2021, SMSFs have been reported
as making up 25% of all super assets (i.e., $822
billion as of 30 June 2021). New shield against debt recovery
proposed for small business
Small businesses are to be afforded the ability to
apply to the Small Business Taxation Division of the
Administrative Appeals Tribunal (‘the Tribunal’) for
orders to stay (i.e., temporarily suspend) specific
ATO debt recovery actions. Broadly, amending
legislation will allow the Tribunal to make such an
order only if the proceeding is brought under the
Small Business Taxation Division of the Tribunal. Small employers and STP – the
ATO gets serious
The ATO has advised it is in the process of shifting
from its previous engagement and communication
focus on Single Touch Payroll (‘STP’). In particular,
it will begin a ‘failure to lodge penalty’ process for
small business employers (i.e., those with 19 or
fewer employers) who have yet to commence STP
reporting. Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
The law allows eligible companies to carry-back tax
losses from 2020, 2021, 2022 and now the 2023
income year to previously-taxed profits in the 2019
or later income years.
A company that does not elect to carry back losses
under this temporary (yet extended) measure is still
eligible to carry losses forward as usual.
As a result, the ATO has recently confirmed that
even where SMSF trustees rely upon super or
tax professionals to administer their SMSF, each
trustee remains personally responsible for good
record keeping.
If trustees are unsure of their obligations, the
ATO has encouraged them to view the ATO’s
record-keeping videos available on their website
(refer to QC 23333) and undertake an approved
education course (refer to QC 41142) to improve
their understanding and knowledge.
Editor: Talking about SMSFs... The ATO has
recently released some interesting statistics,
outlined in the article below. These statistics were
taken from the information provided in the 2020
SMSF annual return lodgments.
At the same time, there were approximately 598,000
SMSFs with almost 1.115 million individual
members. Furthermore, as of 30 June 2020, on
average, each SMSF has assets of just over $1.3
million.
The ATO has also reported that the total
contributions to all SMSFs in 2020 was around
$17.9 billion (a 4% increase from 2019).
Finally, according to ATO statistics, over 25,000
SMSFs were established in 2021 (with average
assets of $391,000 upon establishment), and
of these new SMSFs, 85% were founded with a
corporate trustee (i.e., rather than an individual
trustee).
This proposal (initially announced in the most recent
Federal Budget) aims to provide small business
entities (‘SBEs’) with a cheaper and easier way to
pause the effects of an ATO decision to recover a
tax debt whilst their tax dispute is being considered.
STP reporting has been mandatory for most small
employers from the 2020 income year, with a final
‘nudge letter’ being issued to approximately 700
small employers in late January 2022.
Notably, the ATO advised that any remaining
non-compliant small employers (i.e., those not
subject to any appropriate reporting extensions
or exemptions) will have been issued pre-penalty
warning letters from 18 February 2022.
Where an employer receives a pre-penalty warning
letter, they will have a further 28 days to take action
by either starting to lodge or contacting the ATO
before a failure to lodge penalty will be imposed.
Editor: Should you have any questions (or require
any assistance) about any of the issues raised in
this update, please feel free to contact our office.