Greater Protection For This Brave New World!

The global epidemic we are all bravely facing has shown us just how important it is to ensure your family is protected and provided for in the unfortunate event of the death of a loved one 

With people losing their employment and lending institutions requiring more and more guarantees from their borrowers in order to secure finance, there is a greater need to ensure our assets are not diminished and are protected from creditors. 

It is important to consider if your circumstances have changed and if your will, power of attorney documents, company or trust structures (estate documents) are serviceable to your wants and needs. 

It is always recommended to review your estate documents every 3-5 years, however, within that time, if your circumstances do change your estate documents may not provide the most appropriate level of protection and may leave your estate exposed. 

Additionally, if you do not have any estate documents in place, it is vitally important to consider putting these in place to protect your loved ones and to ensure they are able to administer your estate as easily as possible during their difficult time. 

Below is a non-exhaustive list of matters to consider when reviewing your estate documents: 

  1. Who is your executor?
  2. Have you separated from your partner?
  3. Have you re-married or do you have a new spouse?
  4. Are you children still considered dependant upon you?
  5. Do you have life/death insurance and permanent disability insurance cover within your super?  Is the amount you are insured for enough?
  6. Have you in place a binding death benefit nomination for your life insurance and super?  Has the nomination lapsed or is the beneficiary an authorised person (spouse, child, financial dependant, estate)?
  7. Have you provided any specific assets of your estate to people under your will but that asset is no longer in your possession?
  8. Have you lost touch with a person who would currently benefit from your estate?
  9. Have you put enough protections in place for someone you are not providing for under your estate?
  10. Has anyone names within your will passed away?  What would happen to their share?  Has that been made clear within your will?
  11. Does your trust deed or company constitution provide provisions on what happens if you were to pass away?

If you are unsure on how to answer any of these questions or if you require a review of your estate it is recommended you have a discussion with one of our estate lawyers who will guide you on the best course of action.  

A bonus of Canny Group is that our team is able to provide you with a holistic service with our lawyers, accountants and financial advisors working together to provide you with the most efficient and effective advice. 

 

Katherine Taylor – Solicitor

BCriminology (History), LLB

HomeBuilder Grant

In June 2020, as part of its economic response to Coronavirus, the Australian Government announced its HomeBuilder Grant.  The purpose of which is to assist in the continuation of the construction industry through employment of trades and to maintain or increase the property market.

So, what is it all about?

The Grant provides eligible owner-occupiers with a grant of $25,000 to build a new home or to substantially renovate an existing home.  Owner-occupier refers to someone living in or intending to immediately live in a property as their main residence.

Here’s what you need to know if you are eligible…

LAND BUYERS / VACANT LAND / OFF-THE-PLAN BUILDS

The grant is available to owners who own land or are buying land and intend to build a home on the property as their main residence. Criteria each owner must meet:

  1. Be a natural person (ie not a company or trust)
  2. Be over 18 years old
  3. Are an Australian citizen
  4. The property is your main residence
  5. You are not an owner-builder
  6. You meet one of the following two income caps:
    1. INDIVIDUAL APPLICATION // no more than $125,000 per annum based on your 2018/19 taxable income OR
    2. COUPLE APPLICATION // no more than a combined value of $200,000 per annum based on your 2018/19 taxable income
  7. The building contract was signed between the 4th June 2020 and 31st December 2020
  8. Construction must begin within three months of the building contract signing date
  9. The builder cannot be a relative (must be an arm’s length transaction between unrelated parties)
  10. The property value (house and land) must not exceed $750,000

BONUS – this Grant is an additional monetary payment to the First Home Builders Grant for first home owners!

SUBSTANTIAL RENOVATIONS // Homeowners are eligible for the Grant if they enter into a building contract for works that will significantly improve their property but not for works that would be viewed as repairs to the home.  Criteria each owner must meet:

  1. Be a natural person (ie. not a company or trust)
  2. Be over 18 years old
  3. Are an Australian citizen
  4. The property is your main residence
  5. You are not an owner-builder
  6. You meet one of the following two income caps:
    1. INDIVIDUAL APPLICATION // no more than $125,000 per annum based on your 2018/19 taxable income OR
    2. COUPLE APPLICATION // no more than a combined value of $200,000 per annum based on your 2018/19 taxable income
  7. The building contract was signed between the 4th June 2020 and 31st December 2020
  8. Construction must begin within three months of the building contract signing date
  9. The builder cannot be a relative (must be an arm’s length transaction between unrelated parties)
  10. The contract price must be between $150,000 and $750,000
  11. The property value before the renovations must not exceed $1.5 million
  12. The works must be in connection with the dwelling (ie swimming pools, stand along garages and granny flats do not apply)

PROCESS + TIMING OF PAYMENT // Applications for the Grant are not yet available.  For new builds, the grant will be paid in line with the timing of payments for First Home Owner Grants, or at the discretion of their state and territory.

For substantial renovations, the grant will be paid once at least $150,000 of the contract price has been paid for the renovation.

ADDITIONAL CONSIDERATIONS // While all States and Territories have signed the National Partnership Agreement for the Grant to proceed, each State and Territory through their relative Revenue Office’s (or equivalent) will be setting their own guidelines and framework for applications and these may slightly alter the criteria above.

Please do not hesitate to contact our friendly legal team should you wish to discuss the Home Builder Grant further.

ADDITIONAL RESOURCES:

Watch this space – SRO – https://www.sro.vic.gov.au/owning-property/australian-homebuilder-grant

Australian Government – https://treasury.gov.au/coronavirus/homebuilder

 

Katherine Taylor – Solicitor

BCriminology (History), LLB

 

2020 Tax Returns + 3 Ways To Make The Most Out Of It!

Did you know that the average Australian received a tax refund of $2,381?  That’s enough to splurge on some new furniture or an LED Smart TV, right?  Well, before you head down to your local shopping centre with your tax refund in hand, take a look at three ways we’ve come up with to spend your tax return.  We’re confident that the following strategies will help you make the most out of your tax return and create positive change in your life.

#1 SET UP AN EMERGENCY FUND

Research conducted in last year’s Financial Consciousness Index found that a concerning 13.4 million Australian’s do not have emergency savings to fall back on if there were unable to earn an income for more than three months.  The study also found that 7.5 million Australian’s struggle to pay their bills and are not saving money regularly.  With this is mind, why not use this year’s tax return to set up an emergency fund and make this the start of your savings plan.  Our team at Canny Advisory can help you with budgeting and saving to ensure that you have the right financial plan in place to set yourself up for success.

TIP // speak to one of our Financial Planners or Advisers to find out the easiest way to make this happen without even noticing!

#2 MEET WITH AN ESTATE PLANNING LAWYER

As the saving goes, there are only two certainties in life; death and taxes.  Unfortunately, more than half of Australian adults do not have a will.  So, with this year’s tax return, why not protect your loved ones and sit down with an estate planning lawyer to draw up a will or testamentary trust.  Our team at Canny Legal can help you with your estate planning needs, including wills, enduring powers of attorney and medical power of attorney.  Getting this sorted can be the final way you say ‘I love you’ to the people you love the most.

TIP // check out www.cannygroup.com.au/wills to complete your Will in the comfort of your own home, without having to leave your couch!

#3 STARTING YOUR SIDE HUSTLE

If you have an idea of starting a side business, use this year’s tax return to kick-start this once and for all.  it doesn’t take much more than $2,381 to get started these days: a basic website and some Facebook or Instagram ads to attract your first paying customers.  Why not make this the start of your side hustle and see if you can generate a return on investment and get your business off the ground.  It’s also worth keeping in mind that our team at Canny Accounting can help you to take your side hustle to the next level.  We will ensure that you’re equipped with the knowledge to manage your side hustle the right way and take advantage of opportunities as they present themselves.

TIP // speak to one of our team to ask them about booking your ticket to our FREE Side Hustle webinar to help you get started the right way!

So, how will you spend your tax return this year?

 

Chris Graham – Client Services

Contracts Can Be Cruel!

You found the perfect property, the vendor and their agent have been amazing, friendly, flexible and have been open to all of your requests through the negotiation stage.  Sounds to good to be true?  It might just be!

If you’re thinking about purchasing a property, do not take the word of the vendor or their agent.  The details of any negotiations are in the pages of the contract.  As stated by Ronald Regal – “trust, but verify”.

Conveyancing has gone through significant changes over the past 5-10 years.  Processes and legislation have modified and, subsequently, so to has the contract of sale.  Gone are the days of fairness and equality in a contract, with contracts now re-written to solely protect the vendor leaving the contract reflecting a ‘no vendor liability’ or ‘take it or leave it’ status.  Further, as the property market expands and there is more interest surrounding a property, you may feel pressured to sign on the dotted line without first obtaining advice.

A contract reflects the negotiations between you and the vendor.  A standard clause now placed in contracts is that the contract is the entire agreement and you will not be able to rely on any promises, assurances or agreements made by the vendor or their agent unless that are inserted into the contract.  It is, therefore, very important that all negotiations with the vendor are disclosed and inserted into the contract.

It is also important for the contract to be reviewed so you are aware of your obligations.  The worst contracts will see you not being able to make any claims against the vendor for damage caused by the vendor or for their failures to comply with building regulations or contamination of the land.  Further, the penalties applied for delayed settlements, delayed paperwork and requests for finance approval extensions can make for a very expensive exercise.

A further catch is when an agent asks for you to sign the contract as a way to secure your offer to the vendor, but, you have not yet had the contract reviewed and amendments may be required.  The agent may then provide this to the vendor and, if accepted, the contract becomes binding.

Amendments to the contract are part of the negotiations and should be completed prior to your signing any contract.  You may be able to reply on the 3-day cooling off period, but, it is best to speak with our office in this regard.

If you need any advice in relation to your purchase or potential purchase, please get in touch with us and we would be happy to assist you!

 

Katherine Taylor – Solicitor

BCriminology (History), LLB

Young Money – Estate Planning For Millennials

We understand life is busy, whether you are studying full-time, travelling the world or thriving in your career.  Like most of us, the last thing on many young peoples’ minds are what will happen to their assets if they were to pass away suddenly.

And what assets do young people have to be worried about?  Aside from personal items, many will be thinking that all they have is some money in the bank, personal items, and maybe, a first home with minimal equity. However, many don’t consider their superannuation fund as a personal asset worth worrying about, but we all should.

Superannuation is one of those assets that many people just set and forget.  Your superannuation can be your most valuable asset, particularly as a young person, when, although the balance of actual super you have accrued is minimal, the automatic life insurance attaching to many retail and industry superannuation funds may be worth hundreds of thousands of dollars.  This will form part of your ‘superannuation death benefit’ should you pass away.

Most superannuation funds allow their members to nominate who will receive their death benefit [accumulated super and life insurance] upon their death.  What is often not communicated by the super fund, is that superannuation law only allows a limited category of persons to benefit from your superannuation fund.  Those people are a spouse or de facto partner, children or your estate [distributed by your will].

So, what happens if you don’t have a partner or children?  Well by putting in place a simple Will, you can nominate your estate by completing a death benefit nomination, and by your will you can then distribute this significant asset to third parties [for example, to parents, siblings, friends or charities].

We also know that whilst you may know and understand that you need a will, you just don’t have the time [or inclination] for multiple appointments with a lawyer during business hours to get it done.  We like doing things differently here and have recently developed an online Will service to provide a reliable and accurate will for those with straightforward circumstances who want to prepare a will on their terms.  Our Off The Rack will option is fully autonomous and can be completed anytime and anywhere [ie. on your couch in trackies at 9pm with a glass of wine in-hand] and your document is delivered to your inbox within one business day.  We also have our Tailored will option which combines online preparation with a short appointment with our lawyers to finalise and sign it, and of course, should you want the piece of mind of a fully custom will with detailed advice, our Bespoke will option is also available.

Visit https://www.cannygroup.com.au/wills/ to find out more or to get your will started, and if you’re not sure which option is right for you, complete the short questionnaire to point you in the right direction.

Powers of Attorney are another vital element of estate planning that are generally overlooked by young people. Download our free Seven Essentials of Estate Planning Guide, or look out for a future bulletin to learn more.

 

Kayla Kennedy – Solicitor

LLB

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.

Estate Planning

I’ve often thought that ‘life planning’ would be a much more appropriate label than ‘estate planning’; estate planning is [and should be] so much more than simply planning for your death.

Of course, planning for how your assets should be dealt with upon your death by preparing a Will is an important component of the plan, but it only one component of what should be much broader life planning – and that planning should begin as early as possible.

Estate planning extends well beyond Wills, to incorporate Powers of Attorney, Superannuation, business ownership, trust structures, tax planning and broader family arrangements, all of which may have no effect until you are unwell or pass away, but should all be part of your planning whilst you are fit and well and enjoying life.

Your estate planning should be front of mind during many of life’s big moments, including the following:

  • PURCHASING A PROPERTY // planning should include how the property is owned, whether that is in your sole name, joint names with another person, or in the name of a company or trust. Getting this right will determine who can receive an interest in the property should you pass away, and can also avoid unnecessary stamp duty, tax and legal expenses in transferring the property down the track;
  • GETTING MARRIED OR SEPARATING FROM YOUR SPOUSE PARTNER // the joy of getting married, or the difficulty of a relationship breakdown, both have an impact on your estate planning. Prior to the event, you should be reviewing any existing wills, powers of attorney, superannuation arrangements, business ownership structures and the ownership of your own assets;
  • HAVING CHILDREN, OR YOUR CHILDREN BECOMING YOUNG ADULTS // your children are the centre of your world, and should also be the centre of your estate plan, whether that is to provide for the care and provision of your minor children, or to benefit and protect your adult children for the challenges in their own lives;
  • STARTING A BUSINESS, OR PLANNING YOUR TRANSITION OUT OF A BUSINESS // both extremely exciting times, and both requiring significant planning to ensure smooth operation of the business and treatment of key people within it.

For bonus points, great estate/life planning will combine elements of legal advice and documents, financial advice and accounting advice, which is addressed in a cohesive, open and organised manner.

 

For further information regarding estate planning, please contact us to receive a FREE copy of our ‘7 Steps to Estate Planning Guide’, and look out for future dates for our ‘Estate of Mind’ seminar series at https://www.eventbrite.com.au/e/estate-of-mind-tickets-66157682409

 

Stefan Manche – Senior Associate Solicitor

LLB, BComm

PPSR – Personal Property Securities Register

Hidden interests…buyers beware!

Persons who obtain finance, more commonly commercial, car or personal finance, a security interest is generally registered on the Personal Property Securities Register known as the PPSR.  In doing so, they are securing their interests on the borrower’s personal property, such as cars, boats, plant and equipment, but does not include land, certain licences and a few other exceptions.  While registration of a security interest is not compulsory, a financier (secured party) may lose its priority to the personal property if it is in competition with other security interests.

If you are looking to purchase business, plant, equipment, car, boat, trailer or the like, a search of the person and/or company in ownership of the property is a must as part of your due diligence.  At settlement and transfer of the property you have a right to clear and free possession of that property from the seller.  If the personal property is under finance and the PPSR charge is not released when the property is transferred to you, the financier has a right, in the first instance, to repossess the property should the seller default on their loan arrangement.  It is important that any security interests are discharge prior to the property being transferred to you.

The PPSR is a single national register for personal property security interests and an online noticeboard of the particulars of a security interest for a particular individual or company.

Follow the link below to find out more information about the PPSR: https://www.ppsr.gov.au/ppsr-overview

If you wish to discuss your own secured property or that of a sellers please contact our legal team on 03 5278 95000 or email legal@cannygroup.com.au

 

Katherine Taylor – Law Clerk

BCriminology (History)

Casual Conversion Rights

Often our business clients want advice on putting into place employment arrangements that are flexible in the form of casual employment arrangements that may also suit employees.

At times the business may want confidence in the employee’s performance before considering a full time contract or the business may be approached by a casual employee who seeks to be converted to full time employment after working regular hours.

In September 2018 the Fair Work Commission (FWC) turned its attention to the question of “Casual Conversion” and the employer’s obligation to convert a causal employee working regular hours to full time or part time permanent employment.  From 1 October 2018 the FWC varied many awards to include this right.  Subject to certain prerequisites in many circumstances (that is 84 Modern Awards in addition some 28 Modern Awards that already contain the right) an employee has a right to request casual conversion to permanent employment.

The rights is subject to the casual employee working a pattern of hours over the previous 12 months that they could continue to perform on a full time or part time basis under the provision of the applicable award.

Subject to the formalities such as the request being in writing the employer may refuse only on reasonable grounds such as: the employee is not working regular hours; it is known or reasonably foreseeable the employee’s position will end; it is known that the employee’s hours will significantly reduce in the next 12 months.  Any such ground must be provided to the employee in writing in 21 days of the request being made.  If the employee disputes the alleged facts or claimed reasonable bases, the dispute will be heard at FWC.

Accordingly business are not required to offer employees under relevant Modern Awards permanent employment and the casual employee’s right depends on the facts determining regular employment over the preceding 12 months.  If casual employees prefer flexibility and 25% higher pay they will not exercise this right.

If you would like more information, or to find our how we can help – please get in touch with our team.

 

Richard Pinkstone – Principal Solicitor

BA, LLB

Debt Recoveries

The world of business dealings is underpinned by trust and reliance on promises to supply goods or services often with the consideration such as payment of money, a debt being due sometime in the future.  Once a contract is legally enforceable, the Court will, if the contract is breached, allow the injured party to seek recovery in the Courts.

Canny Legal regularly act in “debt recovery” proceedings.  Some claims may be very simple such as a failure or refusal to pay monies on account.  However in the cut and thrust of business dealings, contracting parties may have complex arrangements to reach out to potential customers and rely on more complex trading terms.

Suppliers may offer their customers credit terms reflecting their trade requirements.  For example a plumber may have a business which has many projects under way and needs plumbing supplies to compete works before it gets paid from expected future profit.  The supplying company may agree to trade on credit with interest which should also be secured by a personal guarantee and a charge over the director’s property. In this scenario we often find our client’s customers may “bite off more than they can chew” and default in their accounts resulting in debt recovery proceedings.

On the other side of the fence we also act for defendants against claims for monies due and owing and we will explore any genuine defences available to defeat the claim or reduce it by way of set-off.

Debt recovery requires the careful weigh-up of a return for recovery on a debt as against time, legal costs and the uncertainties of litigation.  There will be a range of facts to consider before being able to assess and legally advice on the merits of each claim or each defence.

If you would like more information, we are always here to help.  Please get in touch with our team.

 

Richard Pinkstone – Principal Solicitor

BA, LLB