The ATO estimates that incorrect reporting of rental property income and expenses is costing around $1 billion each year in forgone tax
revenue. A big part of the problem is how taxpayers are claiming interest on their investment property loans.
We’ve seen an uptick in ATO activity focussing on refinanced or redrawn loans. This activity is a result of a major
data matching program of residential property loan data from financial institutions from 2021-22 to 2025-26. This data is being matched
to what taxpayers have claimed on their tax returns. Those with anomalies can expect contact from the ATO to explain the discrepancy.
If you have an investment property loan and redraw on the loan for a different purpose to the original borrowing, the loan account becomes a
mixed purpose account. Interest accruing on mixed purpose accounts need to be apportioned between each of the different purposes the money
was used for.
On the other hand, if the redrawn funds are used to produce investment income, then the interest on this portion of the loan should be
deductible.
For example, if you have redrawn on the loan to pay for a private holiday, or pay down personal debt, then the interest relating to this
portion of the loan balance is not deductible. Not only will the interest expenses need to be apportioned into deductible and non-deductible
parts, but repayments will normally need to be apportioned too.
Withdrawals from an offset account are treated as savings rather than a new borrowing. If you have a loan account and an interest offset
account is attached to this account that reduces the interest payable on the loan, withdrawing funds from the offset account will typically
increase the amount of interest accruing on the loan, but won’t change the deductible percentage of the interest expenses.
That is, when you withdraw funds from the offset account this is really a withdrawal of savings and won’t impact on the extent to which
interest accruing on the loan account is deductible.
If you have a home loan that was used to acquire your private home and you have funds sitting in an offset account, withdrawing those funds
to pay the deposit on a rental property won’t enable you to claim any of the interest accruing on the home loan.
However, if you redraw funds from the home loan to acquire a rental property then interest accruing on this portion of the loan should
be deductible. The tax treatment always depends on how the arrangement is structured.
Think you might have a problem? Contact us and we can investigate the issue before the ATO contact you.
They say every great journey begins with a single step - and yours in just beginning. Here's how to get on the path to financial
freedom at the same time.
There may be several reasons why you’ve decided it’s time to change accountants. These could range from your accountant taking months to complete your accounts or not being a responsive communicator to the fact that your accountant is “old school” and doesn’t understand cloud accounting.
Worried about running out of money in old age? We talk to retirement expert and women’s advocate Nicolette Rubinsztein about what women can do now to help their long term financial security.
Another financial year is about to finish! As a business owner, there are many obligations that you need to consider and action just before
and after 30 June.
Some of these will help to minimise your tax. Others will reduce your exposure to an ATO tax audit. We have outlined these action points to
assist you.
The moral of the story - You can’t leave assets in your Will which are not legally owned by you. Did you know this? It comes as a surprise to many as people just assumed that their all of their assets will be distributed according to their wishes outlined in their will.
From global keynote business leaders to interactive interview panels of local movers and shakers, B.I.T.E. Conference has proved to be the
hub for all things boundless, bold and brilliant for the past two years. We’re passionate about Australian businesses and the positive
contribution they make to the economy. We’re even more passionate about nurturing and growing small business on the Mornington Peninsula
and Greater Frankston region.
We invite you to join us at B.I.T.E Conference 2019 - The Business Event of the Year.
If your business is typical of most small to medium enterprises, approximately 60% of your total operating costs are earmarked for your workforce. So, how can you be sure you’re getting the best out of your team of super heroes and ROI for what is arguably your most substantial outlay?
To put it more directly: Are you getting the return you expected from your workforce spend?
Before you swap your briefcase for a beach towel, have you thought carefully about what life in a quieter location will really be like?
We are seeing a lot of property development on the Mornington Peninsula whether it be sub-dividing and developing two new houses, or on a larger scale.
There's recently been a big tax law change that may reduce the tax deductions for many businesses across Australia.
If you’re invested in property – or if you’re looking to buy your first home or downsize – the federal government has proposed some initiatives that might impact you. Here’s what you need to know.
Centrelink offers a range of financial benefits to help parents manage the cost of raising kids. And if you’re a single parent, you might even be eligible for additional financial support. This cheat sheet will give you an idea of which benefits you’re entitled to and how much they’re worth.
Does the idea of taking your best-selling Aussie product or service global appeal? Introducing your offering to international markets can be rewarding, provided you venture forth fully prepared.
With the federal election done and dusted we've done a wrap up of how the Coalition win will affect you, either as a business or as an
individual.
Check it out.
Well the end of financial year is nearly here so what can you do prior to June 30 to keep more money in your pocket and not the tax man? Many proposals from budget night will also impact your future tax position. So take a read through and see which measures can potentially benefit your business
Session # 4 Business Value - Build a business with the end in mind
When establishing a business, most of us
will think about how to 'get there.' However, the widely forgotten yet hugely important contrasting component to a solid business plan is
also to know how you may one day exit the business. An effective exit or succession plan encourages the growth and sustainability of your
business.
Our
Lunch Learn Program
combines two
of
life's essentials; food and knowledge. And what better way to combine the two than with a 2 course catered lunch alongside like-minded
business owners who are keen to learn & network. A more casual alternative to formal training and seminars, the best lunch and learns
become an integral part of company culture - and a tasty perk that everyone looks forward to.
With only a few days til' the Federal Election on 18 May, there is a lot of wild speculation and 'fake news' in the media.
We're not trying to recommend who you should vote for. That's a deeply personal decision. Rather, we'd like to help explain how the outcome
of the Federal Election will impact you.
While women play an active role in everyday financial decisions, they are less involved in managing long-term investments than men, according to recent research published by the Commonwealth Bank.
It sounds like the beginning of a bar room joke, but in all seriousness and despite their stereotyped images, there are fundamental differences between the three positions.
WARNING TIME
The
Australian Taxation Office (ATO) is closing in fast on everyone who doesn't
properly declare their income and pay the correct amount of tax.
As
your Tax Accountants, we want to help you be aware of what the ATO is doing and
how you can protect yourself.
Housing affordability continues to be a major challenge for many Australians. But if you’re willing to live outside the big cities, you could find the right property for your budget – just don’t forget to consider your lifestyle needs.
Do not sell without first gaining professional advice
For the majority of small to medium sized business owners, the value of your business is your biggest asset, and very likely, your
retirement fund.
Upon sale of your business it is critical you receive the maximum available net proceeds. However, many taxpayers miss this once in a
lifetime chance through poor transactions planning and the holding of assets in inappropriate structures. Just because you consider yourself
a small business does not mean you have automatic access to all available CGT concessions.
While the rules are complex, if the correct planning is in place, a husband and wife team can receive up to $4 million tax free after the
sale of their business. (If you’ve run your business for at least 15 years, all the sale proceeds might be tax free!)
Are you thinking of acquiring, upgrading or replacing capital assets that will be used in running your business?
The Fringe Benefits Tax (FBT) year ended. With the ever increase budget deficits, the ATO will be reviewing whether all employers who
should be paying FBT are, and that they are paying the right amount.
To help you meet your fringe benefits obligations, we’ve put together a list of essentials every employer needs to know about FBT and review
every year, such as:
Nicolette Rubinsztein has built a successful career as a senior financial services executive and non-executive director – all while working part-time and caring for three young daughters. She shares her seven strategies for working parents who want to have a great career – and a happy family.
How to help a family member who can’t get finance get onto the property ladder without incurring capital gains tax.
SESSION 3: FINANCIAL AWARENESS
The better you understand your business, the easier it will be to make more money.
Management decisions rely on a sound understanding of the financial implications for a business. We have developed this workshop to enable
business owners to fully understand and interpret their numbers, so they have a strong foundation on which to grow their business.
We recommend this workshop to you if you are passionate about your business and want to better understand your numbers, so you can answer
questions like:
1. How much profit have I made this year?
2. Why has my profit increased but I have no cash?
3. Is my cash level increasing or decreasing?
4. What is affecting my cash level?
Spring is boom-time for the real estate industry, with a surge of homes on the market after the quieter winter months. So, if you’re planning to buy a home this season, the good news is that you should have plenty of options to choose from. But first, you’ll need to know what you’re looking for, depending on where you’re at in life
With the Fringe Benefits Tax (FBT) year end of 31 March 2019 upon us, it is time to assess the annual FBT obligations of your business.
Thinking about using your car, home or personal skills to make some extra cash over summer? Before you do, make sure you understand what’s involved.
The ‘sharing economy’ refers to the sharing of goods, skills or services for a fee, usually facilitated by a third party through a website or app.1 In recent years, it’s revolutionised how we book holidays, get around town, source help – and even earn money. So how can you aim to profit in this new economy?
Many investors have a personal share portfolio. When it comes to your SMSF, did you know that you can contribute more than simply cash? You are also able to contribute listed shares
One of the advantages of self-managed super funds (SMSFs) is the ability to acquire a business real property (BRP), such as a commercial property, a shop or even a farm through your SMSF.
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It's on again! SMART Business Solutions together with Clothes4U Boutique once again bring you the fabulously fun and feel-good event,
Fashion For A Cause.
Last year, this brilliant clothes-swap concept raised in excess $6,500 for the most vulnerable people in our Mornington Peninsula community.
You started your business with the intention of making it a success yet your long-term vision most likely does not take into account what will happen to your business when you retire or in the event you should not be able to continue working.
SESSION 2: Successful Selling
You're already good at what you do. However, most business owners have never received any formal sales training. In a world of rapid change,
tighter margins, and greater competition due to digital marketing, it’s essential that business owners dedicate time and energy to
obtaining their share of the market.
This Lunch & Learn session provides valuable sales learnings and advice to help you streamline your sales process, boost the
performance of your sales team and significantly improve your results.
Being successful in business demands you have certain essential components in place. Such as a durable business model. A solid plan of action. Sound financial management and bookkeeping.
The tax lodgement due date is fast approaching..... make sure you get organised to avoid any unnecessary penalties or interest changes.
The ATO has just announced that it will begin contacting businesses in the building and construction industry who have not lodged their Taxable Payments Annual Report for the 2018 and prior financial years. What is it? Do you need to report? What information should you report? What if you haven't lodged your report? We answer these questions and more.
Our Lunch Learn Program combines two of life's essentials; food and knowledge. And what better way to combine the two than with a 2 course catered lunch alongside like-minded business owners who are keen to learn & network.
A more casual alternative to formal training and seminars, the best lunch and learns become an integral part of company culture - and a tasty perk that everyone looks forward to.
With free advice, you often get what you pay for. It’s been a long time since I’ve been surprised by clients or colleagues telling me about the latest tip that’s shared around the barbeque. What strikes me is the blind faith put in these comments.
One of the most effective ways to deal with a cash flow crisis is to call in your debts. Only downside is this typically involves picking up the phone and speaking with your debtors in person.
For many, the word ‘budget’ is about as appealing as the word ‘diet’. It seems to imply what you will go without, rather than what you will achieve.
To a successful business owner, however, the word ‘budget’ has a very different meaning.
As an accountant, we wear many hats when dealing with clients. Sometimes we’re accountants, sometimes advisors, sometimes a confidante, and sometimes we’re just another parent of a kid on your child’s soccer team.
Our Lunch Learn Program combines two of life's essentials; food and knowledge. And what better way to combine the two than with a 2 course catered lunch alongside like-minded business owners who are keen to learn & network.
Our Lunch Learn Program combines two of life's essentials; food and knowledge. And what better way to combine the two than with a 2 course catered lunch alongside like-minded business owners who are keen to learn & network.
Our Lunch Learn Program combines two of life's essentials; food and knowledge. And what better way to combine the two than with a 2 course catered lunch alongside like-minded business owners who are keen to learn & network.
Whether it's generating more leads, or selling more to your existing customers, taking the time to set your marketing goals and determine the actions required to achieve them is the first step.
A new financial year is a bit like “new year’s eve”, a time to make those New Year’s resolutions. Insurance is not typically first and foremost in your mind when you’re dealing with the day-to-day running of your business.
Here it is, my blog on why I purchased $5,000 on Xero shares for each of my two children. For over 6 months I have been contemplating whether this experience would be beneficial to anyone if I shared it. I kept thinking, “Who would want to read it?” and “What would I say?” and “Would anyone care?” Well, here I sit on my way back from seeing the Grand Canyon whilst holidaying in the USA with the family. I have time, so I pulled out my iPad and started to write. So, here it is. The story of why I purchased those Xero shares.
Our Lunch & Learn Program combines two of life's essentials; food and knowledge. And what better way to combine the two than with a 2 course catered lunch alongside like-minded business owners who are keen to learn & network.
Tax planning is more than just a financial necessity—it's a strategic advantage for businesses of all sizes. By proactively managing your tax strategy, you can significantly reduce your liabilities, enhance cash flow, and ensure full compliance with ever-evolving tax regulations.
