Financial Plans Are COOL

IT IS PRETTY COOL TO HAVE AN ACTUAL FINANCIAL PLAN AND NOT JUST ‘ONE IN YOUR HEAD’

Whilst seeing a client, our discussion often turns to managing personal cash flow.  Some people are happy just living from pay-to-pay and don’t give much consideration to plans for the medium or long term.  Others haven’t really given the idea any thought but think it will all be “OK”.  However, more and more people are thinking about this, but don’t know where to start.

Financial management and retirement planning help people determine their personal saving targets, what they can afford to spend, and how best to arrange their financial affairs.  Retirement planning can quantify how much you need to have saved to retire.  When you are years away from retirement and your personal finances are ever-changing, this can seem like a challenging concept, but it is important to remember that a financial plan is a process, not a product.  It is something that requires discipline to start and at least annual maintenance and review.

A financial plan should include:

  • INVESTMENT PLANNING;
  • INSURANCE + RISK MANAGEMENT;
  • FINANCIAL MANAGEMENT;
  • RETIREMENT PLANNING;
  • TAX PLANNING; +
  • ESTATE PLANNING + LEGAL ASPECTS

Most people insure against at least some of the risks of financial loss due to death, medical issues and damage to property.  You could look at a well-structured and maintained financial plan as insuring against financial difficulty later in life.

Estate planning may also be an overlooked financial planning exercise.  The thing about estate planning is that it should go beyond simply preparing a will just to check off a box and say that it is done.  In a financial planning context, it is important to consider things like who your beneficiaries will be, joint asset ownership, income tax liabilities.  In the same way a married couple may plan for retirement together, it is important to consider what might happen if one spouse or the other died prematurely.  This may be as much a financial planning exercise as an estate law one.

Our financial planners – Samantha Butcher and Helen Yau can get you started on this journey and will assist and advise along the way.  Why don’t you call and make an appointment today, it’s that easy!

 

Amanda Wilkens – Director

B.Comm CPA

Buy Low Sell High

Buy Low Sell High is the first seminar in our free Property Seminar Series.

Buy Low Sell High is designed to provide an overview of the sale process, from engaging a real estate agent right through to handing the keys to the purchase.

We delve into:

  • WHO // you will need to engage to sell + why
  • WHAT // who does what, from the agent to the stylist right through to the broker + lender
  • CONVEYANCING // the general conveyancing process
  • SETTLEMENT DAY // what to expect + what happens if there is a delay
  • TRAPS + PITFALLS // that you should be wary of when consider to sell your property

So when the time is right to move on to your next dream home, selling your property for the best price will be a breeze!

Secure your FREE ticket through Eventbrite here.. https://www.eventbrite.com.au/e/buy-low-sell-high-tickets-75801936633

REFRESHMENTS INCLUDED + ALL CHILDREN WELCOME!

New Labour Hire Laws In Victoria

ATTENTION ALL BUSINESSES.. does your business or organisation use labour hire workers?  If this applied to you, then you need to be aware of the new labour hire laws that are now in place, and how they may affect you and your business!

 

Under the Labour Hire Licensing Act 2018, labour hire providers will have until 29 October 2019 to apply for and be granted a licence by the Victoria Labour Hire Authority to operate in Victoria.

Licences can be applied for from the Labour Hire Authority website.  These licences are valid for a period of no more than three years.

There is a test that needs to be satisfied to obtain and maintain a licence.  This is known as “fit and proper test”.  Businesses will need to prove past compliance with the applicable employment, tax, immigration and workplace health and safety laws.

To ensure compliance of the new licensing system, the Victoria Labour Hire Authority will employ inspectors.  These inspectors will be able to enter and search premises, examine, seize or inspect anything suspected of relating to a possible contravention.

KEY POINTS FOR BUSINESS OWNERS:

  • LABOUR HIRE PROVIDERS MUST REGISTER ONLINE TO CREATE AN ACCOUNT + then apply for a licence.
  • LABOUR HIRE PROVIDERS WILL HAVE SIX MONTHS, or until 29 October 2019 to register online + apply for a licence.
  • IF PROVIDERS DO NOT APPLY FOR A LICENCE within the six-month transition period, they will be prohibited from providing labour hire services from 30 October 2019
  • UNLICENSED LABOUR HIRE PROVIDERS CAN FACE SUBSTANTIAL FINES, with a maximum penalty for a natural person being more than $120,000 + for a corporation exceeding $500,000.
  • HOSTS [BUSINESS WHO UTILISE LABOUR HIRE WITHIN THEIR BUSINESS] who enter into an arrangement after 29 October 2019 with a labour hire provider who has not applied for, or who has been refused a labour hire licence face substantial fines ranging from a maximum in excess of $120,00 for a natural person to in excess of $500,000 for a corporation.
  • THERE IS AN APPLICATION FEE, + ANNUAL LICENCE FEE, payable by the labour hire provider.

If your business uses labour hire workers in Victoria, we recommend you begin enquiringly with the providers as to their intentions with respect to applying for a licence.

Please contact Canny Legal on 5278 9500 if you have any queries regarding the new Labour Hire regime.

Property Seminar Series

With Spring in the air it’s no secret that it’s one of the best times of the year to go house shopping!  With that in mind, Canny Legal have put together their very own Property Seminar Series, with seminars covering the following topics:
  • SELLING A PROPERTY
  • BUYING A PROPERTY
  • INVESTMENT PROPERTIES
  • FIRST TIME HOME OWNERS
  • PURCHASE OF A COMMERCIAL PROPERTY
  • RENTAL/LEASING MATTERS
As well as our experienced and friendly team, we will also have special guests including local real estate agents, builders, financial brokers and many more to share their tips and tricks.

State of Wellness Summit

STATE OF WELLNESS SUMMIT // Creating Sustainable Positive Changes In The Lives of Women

We are honored to be sponsoring this amazing wellness movement that is all about creating sustainable positive changes in the lives of women.

You will be able to find our team on Thursday 10th October at GMHBA stadium sharing our knowledge with everyone on how NOT to sweat your finances.

Hosted by Geelong’s charismatic and life-changer Roxie Bennett, there will also be speakers including:
LAUREN BURNS // Olympic Gold Medalist, Naturopath/Nutritionist
JANE KINNEAR // Positive Change Coach, Speaker + Registered Nurse
REBECCA WINKLER // Naturopath + GAPS Practitioner
JO SURKITT // Though Leader, Speaker, Leader + Positive Change Creator
CAL STEWART // Feng Shui Consultant
MADELINE WEST // Food and Mood Centre at Deakin University
KIM BYRNE // Female Mentor, Author + Acclaimed Surfer
AMANDA WILKENS // Canny Group Director, CPA, Chief Financial Operator + Supporter of Women in Business
SAMANTHA BUTCHER // Financial Adviser
DR. CAROLINE TAYLOR-WALKER // Principal Doctor + Lecturer

THURSDAY 10TH OCTOBER 2019
HIGHER MARK @ GMHBA STADIUM GEELONG

Director Amanda Wilkens along financial adviser Samantha Butcher are going to be on stage from 3.30pm for the Q+A Expert Panel answering all of the questions related to women finances.

By using the following link, https://www.stateofwellness.com.au/ we are lucky enough to be able to offer a $50 discount on all tickets that are purchased, just enter CannyFriend as the promo code to apply your discount.

Deceased Estates

There are no inheritance or estate taxes in Australia.  The person responsible for administering a deceased estate is most commonly referred to as an executor, but could also be an administrator where letters of administration are granted by a court.  Both are considered a legal personal representative by us.

When a person dies, there are some important tax and superannuation issues for the executor and the beneficiaries, including:

 

IF YOU ARE A BENEFICIARY OF A DECEASED ESTATE

There may be some tax obligations for beneficiaries, depending on the nature of any distribution they may receive:

RECEIVING SUPER BENEFITS

If the deceased person had super, the super fund’s trustee will work out who to pay any benefit to [either as a lump sum or an income stream].  Super paid after a person’s death is called a ‘super death benefit’.  The tax on a super death benefit depends on:

  • WHETHER YOU WERE A DEPENDENT OF THE DECEASED UNDER TAXATION LAW
  • WHETHER IT IS PAID AS A LUMP SUM OR INCOME STREAM
  • WHETHER THE SUPER IS TAX-FREE OR TAXABLE AND WHETHER THE SUPER FUND HAS ALREADY PAID TAX ON THE TAXABLE COMPONENT
  • YOUR AGE AND THE AGE OF THE DECEASED PERSON WHEN THEY DIED (FOR INCOME STREAMS).

RECEIVING ASSETS

Capital gains tax (CGT) applies to the disposal of an asset; so if you receive an asset you are not affected by CGT.  If you later sell that asset, CGT may apply.

EARNING INCOME

If you as a beneficiary are presently entitled to income of the deceased estate, the income is assessable in the year your present entitlement arose, not in the year the amount is received.

For example, if you were presently entitled to the deceased estate income on 30 June 2018 but did not receive it until September 2018, you are personally assessable on that amount in the year ended 30 June 2018, not in the year ended 30 June 2019.

COMPLETING YOUR TAX RETURN

As a beneficiary, you need the following information:

  • YOUR SHARE OF TRUST INCOME TO WHICH YOU ARE PRESENTLY ENTITLED
  • THE AMOUNT OF YOUR ENTITLEMENT THAT WAS PAID TO SOMEONE ELSE FOR YOUR BENEFIT
  • THE ASSESSABLE INCOME AMOUNT
  • YOUR SHARE OF FRANKING CREDITS ASSOCIATED WITH ANY DIVIDENDS IN THE TRUST DISTRIBUTION
    • THIS MEANS THAT THE COMPANY PAYING THE DIVIDENDS HAS PAID INCOME TAX FOR THE AMOUNT.
    • IF YOU ARE AN AUSTRALIAN RESIDENT BENEFICIARY, YOU ARE ENTITLED TO THE ASSOCIATED FRANKING CREDIT WHEN THE INCOME DISTRIBUTION IS INCLUDED IN YOUR TAX RETURN FOR INDIVIDUALS.

BENEFICIARIES PRESENTLY ENTITLED BUT UNDER A LEGAL DISABILITY

If you are a beneficiary presently entitled but under a legal disability you also need to know the amount of tax the trust paid on your behalf.  If you need to lodge your own tax return you are entitled to receive a tax credit for this so that the same amount isn’t taxed twice.

NON-RESIDENT BENEFICIARIES

If you are a non-resident beneficiary, you will also need to know the amount of:

  • INTEREST IN YOUR DISTRIBUTION AND THE WITHHOLDING TAX PAID
  • UNFRANKED DIVIDENDS IN YOUR DISTRIBUTION AND THE WITHHOLDING TAX PAID
  • FRANKED DIVIDENDS IN YOUR DISTRIBUTION
  • TAX THE TRUST PAID ON YOUR BEHALF

 

Kim Sandhu – Senior Accountant

CPA – B.Com M.Acc

Investment Properties – What Happens When You Sell?

Investment Properties – What happens when you sell?

When you sell an investment property, you are likely to make a capital gain or profit and will be required to pay tax on it.  The tax consequences depend on a range of issues, from whether you inherited or purchased the property, to your intention for the property if it was a new build.

In certain circumstances, an inherited property can be tax free when it is sold, but this is dependent on who you inherited the property from, how they used the property before you and when you sold it.  Was it an investment property for them or a principal place of residence?  The answers to these questions will have a bearing on whether there is no taxable capital gain or whether you will end up with a large amount of tax to pay.

Your intention for an investment property can make a difference on whether the ATO will consider it to be subject to capital gains tax or if it should be considered a profit-making venture, especially if you are building on vacant land.  Your intention should be made clear from the outset and documented to avoid complications further down the track.  If your intention is to build a property and keep it for a number of years and rent it, this leans more to the fact that it should be treated as a capital gain.  If you have to sell earlier than you had wished for, the ATO could view it as being a profit-making venture, depending on the time frame between the build being complete and the sale.  This is where documenting your intention can become important.  Where you buy vacant land, or land with a house and demolish it, then proceed to build units on the land, the ATO will consider this a profit-making venture.  In this circumstance, you are likely to be required to register for GST as well.

There are many considerations that need to be taken into account when selling an investment property and it is not always a simple process to determine the tax consequences.

 

Danny Grigg – Senior Accountant

B.Comm CA

Advantages + Disadvantages of Investment Properties

Advantages + Disadvantages of Investment Properties

Purchasing an investment property can be a very exciting time and can help build your wealth over time.  However, before rushing out to buy an investment property, it is important you consider the pros and cons.

ADVANTAGES

  • Provision of rental income to help top of other income
  • Help reduce income tax if the property is negatively geared i.e. the rental income is less than the interest on the loan
  • Potential capital growth in value of the property
  • Can be less volatile than shares or other investment options

DISADVANTAGES

  • Lack of investment diversification
  • A lot of money is tied up in one asset that can take time to sell
  • Buying and selling costs can be high
  • Tenancy risk. There is a chance your investment property will have periods of time where it is not tenanted.
  • You are responsible for all ongoing maintenance
  • Capital gains tax will be payable if the property is sold at a profit
  • Interest rate risk – a rise in rates will result in higher loan repayments and a potential reduction in net income
  • A substantial amount of capital is required from the outset

As always, we encourage you to seek professional advice to ensure the decision is right for you.

 

Samantha Butcher – Financial Adviser

BComs Dip FS

How To Plan For Your Possible 2019 Tax Refund + Possibly Maximise It!

How to plan for your possible 2019 tax refund and possibly maximise it!

As the days tick down towards the end of the financial year it is without doubt that many of you are beginning to consider your 2019 Tax Return and hope or perhaps expect you will be in a tax refundable position this year.

I suggest now is the time to begin collating your tax receipts into a tidy folder.  Grouping your deductible tax invoices by the type of expense will assist dramatically in allowing us to process your return effectively and efficiently.  For those taxpayers that have numerous allowable deductions, consider storing copies of the tax invoices on your phone in a folder titled “2018/19 Tax Receipts”.  Further, for example, a tradesman who may have purchased a number of tools during the year, adding these into an excel spreadsheet and totalling them will be of great assistance.

With the above in mind in order maximise any tax refund you may be entitled to [or reduce your tax payable] ensuring you include/remember all your allowable deductions is essential.  The Australian Taxation Office provides “industry and occupation specific guides” [see link at the bottom of the article].  These guides will allow a number of you to review what expenditures you may have incurred in carrying on your job as a wage earner in common industries [note this is not an exhaustive list].  Moreover, they will advise you on a number of deductions that are not allowable and save you the time of collecting these.

Hopefully the above tips will assist you this tax season and come the new financial year we look forward to seeing you all and again assisting in the preparation of your Tax Returns.

https://www.ato.gov.au/Individuals/Income-and-deductions/Occupation-and-industry-specific-guides/

 

Sam Higgins – Accountant

BComm

Cars + Running Expenses

Did you know transport is the second largest expense after housing, equating to almost 14% of household budgets?  As this cost continues to climb, people are looking for more effective ways to reduce their daily bills.  A Novated Lease on a new or existing vehicle may be the solution, providing significant tax savings on the purchase price and running costs of a vehicle.

BE SURE TO CONSIDER ALL YOUR OPTIONS..

Have you consulted with Canny Group about a smarter way to purchase your next vehicle?  Or if there is a more financially sound way to run your existing one?

As transport costs continue to climb, people are looking for more effective ways to reduce their daily bills.  On average individuals spend over $17,000 annually on transportation, equating to almost 14% of household budgets^.

A Novated Lease on a new or existing vehicle may be a solution to ease transport bills.  It is a three-way agreement between you, the financier and your employer, consisting of a vehicle salary packaging arrangement to pay a large portion of the finance and running costs using your pre-tax income. No business-use is required.

There is no other product or method in Australia that allows tax savings on the personal-use of a vehicle.

And whilst business-use can be taken into account, because of the way the ATO have catered for this concession, unless significant, business-use likely won’t increase the saving any further.

Novated Lease savings come from four key areas:

  • PAYG TAX ON VEHICLE REPAYMENTS + RUNNING COSTS – Australian tax law allows you to salary package a significant portion of the total finance repayments and anything the ATO deems to be a necessary vehicle running cost.
  • GST ON FINANCE REPAYMENTS + RUNNING COSTS – In addition to saving on PAYG tax, you also have the ability to save the GST on the salary packaged portion of finance repayments and running costs (i.e. an additional 10%).
  • REDUCED VEHICLE PURCHASE PRICE – Leasing providers like FleetChoice have purchasing power, resulting in significant discounts on the price of a new vehicle.
  • NO GST ON VEHICLE PURCHASE PRICE – If you purchase the vehicle from a GST-registered vendor (e.g. A fleet provider, a new/used car dealership or a GST registered business), you have the opportunity to not pay GST on the purchase price of the vehicle.  The vendor is paid the full price for the vehicle however you will only finance the GST exclusive price of the vehicle.

Put simply, a Novated Lease allows you to drive the car you want and pay for it in a cost effective way.  It’s also common for families to take advantage of multiple Novated Leases as the lease holder does not need to be the main driver of the vehicle.

Whether you travel 0km or 50,000km per year, the total cost of ownership under a novated lease is more often than not, much cheaper than had you paid cash for the vehicle.

Significant discounts on new cars are accessible via a Fleet Provider because of the sheer volume of vehicles they purchase each year.  And whilst a used or demo vehicle could be put into a Novated Lease agreement, it’s a good idea to get a comparative lease quote on the brand new equivalent.  In some cases, a year old used vehicle or demo model may come in at the same lease cost, or more!

Alternatively, if you aren’t ready to say goodbye to your existing car, you can have a Novated Leasing Consultant run the numbers on packaging your existing vehicle and running costs into a Novated Lease agreement.

Whilst fleet pricing is just as good all year round, May-June can provide that little bit of extra saving.  With EOFY knocking down the door, if you find you are in the market for a car, it might be a good idea to enquire into a Novated Lease soon, so you have enough time to compare your vehicle options wisely.

Most people don’t realise the amount of money they spend on getting from A to B, including to and from work.  It’s the second largest expense after housing, so it’s not surprising that 48% of employees are stressed about the cost of transport^.

If this sounds like something you are interested in knowing more about, get in touch here or speak to a Novated Specialist on 1300 34 33 88.

Alternatively if you would like to understand more about the benefits Novated Leasing can bring to your business, at no cost, download a free copy of The Forgotten Employer Initiative whitepaper.

FleetChoice specialise in the SME market and we make it easy for the employer because ultimately they do have to agree to be a part of the employees Novated Leasing agreement.

 

By Ellen Jessop

After a long 10+ years in the industry, Ellen has a passionate focus and demonstrated history in Income Tax Law, Fringe Benefits and more specifically Novated Leasing.  Enjoyer of expensive things like Reformer Pilates and our good old friend interior design, she currently helps pay for her fabulous Art Deco apartment renovation and ongoing exercise classes using the savings she enjoys on leasing her car.

 

*(FY19; 32.5% for those on $37,001-$90,000 annual Income, 37% for those on $90,001-$180,000 annual income). ^Source: 2018 Employer Talent Investment index. A national study conducted by Mantis Research.

 

 

Financial Savvy

Mark it in your diaries ladies.. FRIDAY 31ST MAY + FRIDAY 21ST JUNE!

We are hosting a FREE seminar for women who would like some education on their finances + most importantly their financial security!

Our in-house Financial Planner, Samantha Butcher will be covering topics such as:

  • Women’s Money Challenges
  • Life Events + Women
  • Women’s Money Goals
  • The Need for Insurance
  • Tax Effective Ways to Contribute to Superannuation
  • Superannuation Beneficiaries
  • Superannuation Investment Options
  • Budgeting/Credit Card Debts
  • Wills + Powers of Attorney

Refreshments included + all children welcome!

LIMITED TICKETS VIA EVENTBRITE: https://www.eventbrite.com.au/e/financial-savvy-tickets-62243498981

Cyber Security – How Not To Be An April Fool

Do you know how valuable you are?  Identity thieves do!

Every year thousands of Australians have their identities stolen.  Criminals use stolen personal information to commit identity crimes.  This can leave their victims with a bad credit rating and impact their ability to gain finance, run a business, or access government services.

Once your identity is stolen it can take a long time to recover.  The same goes for your business, staff and client information and ensuring that this is also secure.  If your data is lost or compromised, it can be extremely difficult as well as very costly to recover.

The Australian Taxation Office (ATO) along with the leading industry bodies, consultation with the Cyber Security Working Group (CSWG), a group of tax practitioner industry groups and other partners, such as software developer associations have created a list of top identity security tips to help keep you, your information and your business safe.

Some tips and tricks for Individuals to consider:

TREAT YOUR PERSONAL INFORMATION LIKE CASH

Do not leave your personal information lying around. If your personal information is stole, it is very difficult to get back.  Keep your personal information private.  Only share it when you are required to, and only share it through authorised processes and to authorised people.

Some tips and tricks for Businesses to consider:

REMOVE SYSTEM ACCESS FROM PEOPLE WHO NO LONGER NEED IT

Immediately remove access for people who; no longer work for your business or have changed positions and no longer require access.  Unauthorised access to systems by past employees is a common cause of identity security or fraud issues for businesses.

DO NOT USE USBS OR EXTERNAL HARD DRIVES FROM AN UNFAMILIAR SOURCE

USBs and external hard drives may contain malware, which can infect your business computers without you noticing.  It can cost your business a lot of money to repair the damage.  Stolen information could be used to commit crimes, often in your business’s name.

Some tips and tricks for both individuals and businesses to consider:

ENSURE YOUR PASSWORDS ARE STRONG AND SECURE

Use multi-factor authentication where possible.  Regularly change passwords, and do not share them.  Multi-factor authentication required used to provide multiple pieces of information to authenticate themselves – for example, a text message sent to your phone when logging in to a website.  An additional layer of security on your accounts can make it harder for others to access your accounts.  Strong passwords with a mix of upper and lower case letters, numbers, and symbols also make your accounts harder to hack.

ENSURE ALL DEVICES HAVE THE LATEST AVAILABLE SECURITY UPDATES

Run weekly anti-virus and malware scans and have up-to-date security software.  Instances of malicious software (malware) are increasing.  It can be easy to accidentally click on an email or website link which can infect your computer.  In some instances, your device may be impacted by ransomware.  Ransomeware can; lock your computer until you pay a fee to criminal and/or install software which provides access to your bank accounts, allowing criminals to steal your money.

USE A SPAM FILTER ON YOUR EMAIL ACCOUNT

Always use a spam filter on your email account and do not open unsolicited messages.  Be wary of downloading attachments or opening email links you receive, even if they are from a person or a business you know.  They can infect your computer with malware and lead to your business or client information being used to commit fraud.  Spam emails can be embedded with malware and/or used to trick you into providing information, paying fraudulent invoices or buying non-legitimate goods.

SECURE YOUR WIRELESS NETWORK

Be vigilant when using public wireless networks.  Avoid making online transactions while using public or complimentary wi-fi.  Not all wi-fi access points are secure.  By making online transactions (such as online banking) on an unsecured network, you can put your information and money at risk.

BE VIGILANT ABOUT WHAT YOU SHARE ON SOCIAL MEDIA

Keep personal information private and be aware of who you are interacting with.  People are accustomed to sharing personal information on social media.  The same goes for many businesses as they also now have a social media presence.  However, before sharing ask yourself if it is information you want strangers to have access to.  It is very easy for information on social media sites to be shared outside of your network, even when your security settings are set to private.  Scammers can take information you publicly display and impersonate you or your business.  Impersonators may send emails to trick your staff into providing valuable information or releasing funds.

MONITOR YOUR ACCOUNTS FOR UNUSUAL ACTIVITY OR TRANSACTIONS

Check your accounts (including bank accounts, digital portals and social media) for transactions or interactions you did not make, or content you did not post.  If an organisation you deal with sends you an email alerting you to unexpected changes on your account, do not; click on included hyperlinks or open any attachments.  You should immediately; check your account and contact the organisation by phone.

ENSURE YOUR MAIL IS SECURE

Ensure your mail is secure and consider using a secure PO Box.  Mail theft is a leading cause of personal information security breaches.

DO NOT DOWNLOAD PROGRAMS OR OPEN ATTACHMENTS

Some programs contain malware that can infect your computer, or be used to harvest your personal and business information.  Be sure you are downloading authorised and legitimate programs.  Unless you know the program is legitimate, do not open attachments or download it.

DO NOT LEAVE YOUR INFORMATION UNATTENDED

Secure your electronic devices wherever you are.  Your personal information can be taken in an instant.  In some situations, you won’t even know it was stolen.  Make sure you; do not leave electronic devices unattended, secure your electronic devices with passcodes and securely store portable storage devices (such as thumb and hard drives) when not in use.

 

Source: Australian Taxation Office (ATO)