Superannuation

Will employment laws change after the election?

Will employment laws change after the election?

A Federal Election is anticipated in the first half of this year. If current opinion polls are to be believed there is a real possibility that the Government will change, which is likely to result in industrial relations reform. 

Sladen Snippet – Super contribution caps, rates and thresholds for 2016/17 year released

Sladen Snippet – Super contribution caps, rates and thresholds for 2016/17 year released

The Australian Taxation Office (ATO) has released key super contribution caps, rates and thresholds for the 2016/17 year. These include:

  • Concessional contribution caps – for persons aged less than 49 on 30 June 2016 the cap will remain at $30,000 -  for persons aged 49+ on 30 June 2016 the higher cap of $35,000 will apply;
  • Non-concessional contributions cap- will remain at $180,000, while the “bring forward” cap will remain at $540,000;
  • CGT contributions cap - will increase to $1,415,000.
  • Super guarantee maximum super contribution base- will increase to $51,620 per quarter, while the super guarantee rate will remain at 9.5%;
  • Lump sum low rate cap- will increase to $195,000.

Sladen Snippet – concept of unit trust clarified for the public trading trust rules

Sladen Snippet – concept of unit trust clarified for the public trading trust rules

The Full Federal Court has provided some welcome clarification as to what constitutes a unit trust when it upheld an appeal by the Commissioner of Taxation, in the decision of CoT v ElecNet (Aust) Pty Ltd (Trustee). In the original decision (discussed in a previous Sladen Snippet) the Federal Court found that a trust established for the purpose of assisting workers when they are retrenched was a unit trust, on the basis of the expanded definition of “unit” in the public trading trust rules.

Sladen Snippet – public trading trust rules no longer to apply for super funds - transitional rules announced

Sladen Snippet – public trading trust rules no longer to apply for super funds - transitional rules announced

The Government has released the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Bill 2015 which, if enacted, will mean that, from 1 July 2016, the fact that self managed superannuation fund(s) (SMSFs) hold more than 20% of the units in a unit trust will not cause the unit trust to be a public trading trust.

The public trading trust rules result in a unit trust being treated as a company in certain ways (for example, it is taxed at the corporate rate and its distributions can be franked). These changes are to apply to existing unit trusts (that are public trading trusts) as well as unit trusts set up after 1 July 2016. 

Sladen Snippet – Non-commercial LRBA loans must be rectified by 30 June 2016

Sladen Snippet – Non-commercial LRBA loans must be rectified by 30 June 2016

The Australian Taxation Office (ATO) has confirmed that it will not take active steps to review non-commercial limited recourse borrowing arrangement (LRBA) loans prior to 30 June 2016.

Self Managed Superannuation Fund (SMSF) trustees are being encouraged to rectify their non-commercial LRBA loans by putting them on arm’s length terms by 30 June 2016. If that occurs then the ATO has confirmed that it will not actively review such non-commercial LRBA loans in prior years. Although not expressly stated on the ATO’s website, the ATO has indicated that such rectification does not need to be retrospective.

Sladen Snippet - Roll-over relief for Small Business Restructures

Sladen Snippet - Roll-over relief for Small Business Restructures

The Federal Treasury has released the Exposure Draft for the Tax and Superannuation Laws Amendment (2015 Measures No. 6) Bill 2015: Small business restructure rollovers to amend the Income Tax Assessment Act 1997 to allow small businesses to defer gains and losses arising from the transfer of capital gains tax assets, depreciating assets, trading stock and revenue assets between entities as part of a restructure.

The proposed amendments attempt to provide greater flexibility for small businesses to change the legal structure through which they operate without triggering adverse taxation consequences.

Hot Issues in Structuring and Rewarding Employees

Hot Issues in Structuring and Rewarding Employees

On 28 October, 2015 Sladen Legal delivered a presentation on various topics in the area of Hot Issues in Structuring and Rewarding Employees.

Topics presented were:

  • Professional Practices Structures – the ATO views and the law - Rob Jeremiah
  • Superannuation and employees - Phil Broderick
  • Employment risks in corporate and business restructures - Louise Houlihan
  • The new employee share scheme regime – the promised land or a mirage? - Carlos Barros

SMSFs and Asset Protection

SMSFs and Asset Protection

When people think of self managed superannuation funds (SMSFs) they mostly think of a vehicle to provide retirement benefits and their concessional tax treatment. In contrast, the asset protection benefit provided by SMSFs is often not considered.

This topic was addressed by Sladen Legal’s Phil Broderick, who delivered a presentation on SMSFs and Asset Protection, as part of the Television Education Network’s 3rd Annual Asset Protection Conference, on 15 October 2015.

Sladen Snippet – Australian-owned private companies exempt from public disclosure taxation rules

Sladen Snippet – Australian-owned private companies exempt from public disclosure taxation rules

Australian-owned private companies are now exempt from public disclosure taxation rules, as the Tax and Superannuation Laws Amendment (Better Targeting the Income Tax Transparency Laws) Bill 2015 (the Bill) passed through the Senate yesterday.

The Bill amends the Taxation Administration Act 1953 to exempt Australian-owned private companies from the requirement that the Commissioner of Taxation publish information about a corporate tax entity with a total income equal to or exceeding $100 million for an income year.

SMSFs and Real Estate Upon the Death of a Survivor

SMSFs and Real Estate Upon the Death of a Survivor

A typical Self Managed Superannuation Fund (SMSF), being the classic “mum and dad” SMSF, generally transitions pretty smoothly through the lifecycle of its members. This includes the accumulation of assets in the growth/accumulation stage and managing benefit payments through the pension stage. It also usually transitions smoothly on the death of the first with the ability to pay a death pension to the survivor.

However, there is one event that can create significant transition issues for SMSFs, being the death of the surviving spouse, particularly in instances where the fund holds lumpy assets such as real estate.

Seamlessly Integrating Superannuation into Effective Estate Planning

Seamlessly Integrating Superannuation into Effective Estate Planning

On 1 September 2015, Sladen Legal’s Phil Broderick delivered a presentation on Seamlessly Integrating Superannuation into Effective Estate Planning, as part the Legalwise seminar topic of Estate Planning: Maximising Asset Protection.