Andrew Jeffers

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answered

Q: Hi All,

If a business becomes a franchisor, can it part own any of the franchises?

E.g.
Entity 1 is an established business and becomes a franchisor

Entity 2 is set up and becomes a franchisee

Is Entity 1 able own any percentage) of entity 2?

Thanks
Frank

A: Hi Frank,

Short answer is yes. BUT be careful of Payroll Tax issues down the track. A subsidiary of another entity is automatically grouped for Payroll Tax Issues.

I am not Lawyer but franchise laws should permit this to occur. I actually have something kinda similar. I run 5 Accounting firms and I run the franchise and then I own parts of the franchisees.

Make sure you get some good structuring advice.

AJ

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Q: I have investment property in my name worth 500k. I wish to build a duplex and borrow in my wife’s name. When we sell both duplexes, will we be able to split the Capital Gains Tax based on our individual borrowings?

A: Short Answer is NO.

CGT goes to the name on the title. I would do numbers and then discuss with accountant and lawyer about changing the title.

AJ

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Xero for Free for 4 months - PLUS conversion and Setup all FREE

Shuriken are offering FREE Xero for 4 months PLUS Xero Conversion and Setup FREE! This is a limited and only available for the first 50 people coming on board. The offer includes 1. Free Conversion us ...

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Q: We have a 108 acre farm in Qld which is registered for GST and has been in steady operation for 12 years as a beef cattle farm. We are planning to sell the farm and understand that GST will be payable unless we sell it to another party who wants to carry on farming. We are in an area where the lifestyle buyer will probably be the more likely buyer so we are wondering about ways to get around this. If we wind up the partnership and sell all the cattle and do not operate as a farm for say 6 months to a year and then sold to a private buyer, would the sale be GST exempt?

A: Hello,

This is a complex question. There are many factors at play here. Generally the GST is not payable when there is a going concern. Ie if the property is registered for GST and it is leased to a party who is operating a business at that premises then there is no GST payable.

However as I stated it is quite a complex question and I really think you need to sit down with a specialist in this specific legislation. GST can be complex and it is not one size fits all. There are exceptions to the rules. Who owns the property, who owns the business, Did you buy it as a going concern. etc etc. Also do not forget IF you do something for the sole purpose to avoid GST and or Income Tax then anti-avoidance provisions kick in and the path you undertake may be illegal.

Best advice would be get specialist advice and get written advice. I have a friend at BDO who could help. His name is Neil Billyard and he is the Tax Partner.

Thanks

AJ

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Q: I’ve heard about government grants for start-ups that help with the cost of tech, but does the tech need to be done in Australia or can it still be done overseas? I have a few quotes and the o/s supplier is much cheaper.

A: Hiya

There are a few schemes both state and federal.

There is the MVP state grant which is the Minimal Viable Product. You get up to $25k to get a prototype going. Dev must be done in Australia. There is also the Federal R & D grant.

Check out

https://www.revenue.nsw.gov.au/grants-schemes/small-business-grant
https://www.business.gov.au/assistance/research-and-development-tax-incentive

AJ

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Q: I would like to ask about a meeting my parents had with their financial advisor where it was suggested they should look at putting their money into investment bonds instead of super – they are in the mid 50’s and working full time. Is this a wise strategy?

A: Hi There,

I don't know if this is good advice but what I will say is they need a statement of advice SOA from their planner. Maybe get a copy of that and have a read so you can get up to speed.

In this their planner will go through all things like pros and cons etc their risk appetite, their financials goals etc.

AJ

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Q: Hi,
We have our own self managed superfund and now struggling with the all administration work. We want to roll into an industry fund and would like to ask about fees and hopefully pay less than 1%. Any recommendation, the funds is about $1.2M?

A: Hi There,

Yep do not go to AMP this is the word on the street they charge like a wounded bull. ....Look at the end of the day you really need to assess ALL the fees and charges including the ones that the fund manager takes BUT all associated fees and charges.

Also by utilising a program like class super you can get up to date info on your fund from your phone and all the paperwork can be automated including automated bank fees, automated shares information. Talk to your accountant. Another great software program is myprosperity

If you already have your SMSF you can get a planner to manage the funds for you as an alternative for rolling it all into an industry fund.

Check all fees and charges you may be surprised.

AJ

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Q: Fun Friday

What quote resonates with you, inspiring you to move forward?

A: Always make unreasonable requests. What is unreasonable tomorrow may be reasonable to someone else

answered

Q: A family member is a qualified chef and has moved to Australia from France and wants to start a restaurant. He has a working visa but is there any legal issues from starting his own business. Could he borrow money?

A: And I am not 100% up to date on the visa, would need to check what type of visa and the conditions. I have had clients in the past on holiday visa's start a business.

answered

A: Good Morning,

Yes he/she can start a business. They need to think about the structure whether it is as a sole trader or a company and the benefits and costs. This business has a high failure rate and if they start it as a sole trader then they will be personally liable and could go bankrupt in the worse case.

They can borrow money legally but will someone lend them money is more the question. I'll leave that to a broker. They could borrow private money from friends if they so desired and the friends decided to lend the money.

Go talk to a good accountant about the structuring and ask a good broker about a loan. In my experience loans are getting really tough at the moment.

AJ

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Q: We are waiting on the loan approval to buy a property but it is taking longer than we thought. The agent has said they will take the property off the market if we pay a 0.25% deposit but we want to know if the loan is not approved will we lose the deposit? Property price is $970,000 so it is a bit of money?

A: Ok So I am NOT a broker BUT all my clients are going through absolute grief trying to get a loan.

^ months bank statements, how often do you eat out. W saw on facebook you are having another baby.

It is truly a nightmare trying to get financed.

AJ

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Q: I would like to get the opinions of other business owners to how long before a new staff member needs to be working for the business before they become part of the employee share options. We introduced it last year for staff who have been with the business almost from the start 4 years ago but not sure whether new employees should have to wait 1, 2 or 3 years. What do people think?

A: Hi Matt,

Great question. I assume this is a private company?

Personally I would wait a few years to see how they perform. Nothing wrong with a recognition program and rewards attached before the Share Options are available.

You could profit share before hand, you could do bonuses, you can change the vesting date which means they don't get the shares for several years.

There are many ways to deal with the situation.

Sorry it was not that specific but hope it has opened your idea about other options.

AJ

answered

Q: Hi,
We have a family business and the accountant has it set up that my income is $40k more than my wife’s. We are looking to buy an investment property and also been advised to buy the property in my wife’s name. Does this sound like good advice and can we get a loan if the loan by using my wife’s name and will they look at both our income and the business profits?

A: Hi Marcus,

Scott news sounds good to me. Perhaps the reason why she is the only one on the title is that you are the only Director?

Maybe this was a risk minimisation strategy. As for proving you are getting a benefit from the investment property even though you are not on title my require a creative broker. ;)

AJ

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Q: Hello, my wife and I have been discussing buying a unit off the plan close to Sydney CBD. The loan have been approved but with the talk about the labour party negative gearing policy is now a good time to buying off the plan or should we look to a place like Newcastle or other regional areas and buying an existing home. Thank you

A: Hi Matthew

OK this is NOT advice but I really don't think the negative gearing thing will get up anyway. The amount of families with an investment property is small and then the amount with more than one is even smaller and most of them work in Canberra ;)

Also you should never buy a place based on the negative gearing aspect. What happens if you lose your job?

Spend plenty of time looking at places and do some solid research. I bought a unit in London and I saw 52 units before I made a decision. By the time I was ready it took me 5 minutes to decide to buy it. Why? because when you know so much about a topic/area then the decision process it very short.

Good Luck

AJ

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Q: First time in business and my friend and I want to start a casual dining wine bar on Sydney northern beaches. Going through financial projections and wondering what benchmark we should be using for profit margins. We have the funds to fit it out so no borrowings and another $50k to start. Any advice would be helpful?

A: Hi Mate,

The ATO publish standards for various industries like wages, cogs etc.

I am out at the moment but I’ll try and get you a link.

There is also a company called benchmarking.com and you can buy a industry specific report.

Don’t be constrained by other people’s benchmarks. Start with what you want tour profit to be then your wage and work backwards to create you desired sales.

When you have KPI’s and goals things are easier to achieve.

We have an office at manly. Drop in for a coffee.

AJ

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Q: Hi,

I am currently transitioning jobs and I have been asked if I would prefer PAYG or to be paid as a Sole Trader.

Can you please tell me if I am financially better to PAYG or be a Sole trader?

Rate per day I will be earning is $550 including super.

Any advise would be greatly appreciated!

A: Jade,

Do you want to do paperwork? Quick answer is no your are not.You provide personal services income which means you cannot get lower taxes by splitting income or claiming home office expense.

Even if you were to be a sole trader they are STILL obligated to pay your super DIRECTLY to your super fund.

AJ

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Q: I have a small business that has been going for a year and I need to access some capital to take advantage of two new contracts. No luck with the banks so I am wondering if it is possible to use some of my superannuation to invest into the business. We only need about $50,000, are there any limitations and do I need to set up a SMSF to do it?

A: Hi There,

Yep cannot use your super. This is called an in house asset.

NAB do a thing called trade finance against an invoice. Also there is debtors finance from the banks. Have you tried that?

AJ

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Q: Hello

My husband and I have just been advised by centrelink that we are not entitled to receive the aged pension because we have too much assets in the form of money, over the $290,000 allowed savings sum. My question is when we live off our savings and deplete it to the allowed savings mount or less, will we then be entitled to receive the full aged pension?

Thank you
Vanessa

A: Hi Vanessa

Ok I would ask Centrelink to recheck your eligibility and you to have a look and make sure you are filing in the forms correctly.

Do you own a home?

Please check out the rates attached https://www.superguide.com.au/accessing-superannuation/age-pension-asset-test-thresholds

If you and Hubbie own a home then the limit for assets excluding the family home is $380k. Yes you can spend some money and even give some away. BUT will only allow for a certain percentage, I think 5%, to not be included in your assets. Example you have $500k and give away $150k hence you have $350k left and now under the limit. Centrelink would consider your assets value at $475k being a reduction of $25k being 5% ( do not quote me I am not %100 sure but it is something like that)

A financial planner would be a good start to have a chat.

Hope that helps.

AJ

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Q: Hi,

We have bootstrapped our business but need capital to grow. A lot of roadblocks from banks and others for finance so we are thinking of offering a convertible note to raise $70,000. Has anyone got any experience with doing something like this and what do we need to look out for?

A: Hi Jason,

A convertible note is just a financial instrument. You can do several things to raise capital but you need to take care. A convertible note is really asking for loan money now and then being able for the lender to convert it into equity.

There are rules and regulations about raising capital from the general public contained in the Corporations Act 2001 Cth Who are you thinking of targeting?

Why not raise capital or just get a loan. If you have assets then you can raise money using the assets to back it up. There are also lenders who will lend money based on the sales of the business, there are people who will lend against the invoices - invoice discounting.

There are many options. Feel free to contact me directly for a chat.

AJ

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Wealthy Homeowner: Myth Or Reality?

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How to Use Facebook Messenger for Social Customer Service

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Salary Sacrifice Arrangements: Do or Don't?

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EOFY Checklist for Small Business Owners

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Investment Property Tax Tips - Keeping Track of Expenses

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answered

Q: I would like to ask if there is a way to keep track of how our super performs including the fees online … like we can with our home loan?

A: Hi There,

If you have your own fund then using a product like class super is an excellent way to keep track of all your investments and movements in the market. Class super is used by the accountant but you can get a login. There are other products the accountant can use like BGL Check with them.

Funds like AMP, if anyone is still there ;), you can login into it and see the fund and the investments aswell.

Anyway go and ask your fund and if you have a SMSF then ask your accountant for access or tram like class then ask them to get one for you.

AJ

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Your Taxpayer Rights In A Nutshell

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How to Respond to Negative Reviews: DOs and DON’Ts

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How to Recognise an ATO Tax Scam

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How to Deal With Business Tax Debt

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Determine How Much Retirement Savings You’ll Need

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answered

Q: I’ve been on the aged pension for 2 years. I have my own company I’ve lent $20k to over many years but want to close/wind up the company. If I prepare a Deed of Debt Forgiveness for the $20k between me as the lender and my company as the borrower, what are the tax implications (if any) for me and the company? Also would this affect my aged pension entitlements? (I’m paid under Centrelink’s “assets test” not “income test”)

A: HI Peter,

Usually, a debt forgiveness would result in income for the business. Saying that if you have lent the business money and there are no assets then I would assume that you have carried forward losses? Those losses should soak up the income.

So assuming there are sufficient carried forward losses then I would say that is ok. When you close it down there is an ASIC form to sign confirming there are no substantial debts owing. Also, don't forget you will need to do a final return and then also cancel the ABN.

As for the Centrelink stuff Ill be honest not my forte. If the company trades at a loss or breakeven then I would suspect you just inform them and provide the financials and then close the company.

AJ

answered

Q: My partner gave a car registered in his name to he’s mother, 4 years on she has never paid a toll and we now have people chasing us for the money . 1-can the debt be transferred to her name now it has gone this far 2-will this affect our credit history badly? Please help!

A: Hi Shannon,

OK you probably need legal advice here and I am not providing that.

I would suspect that the owner is responsible for the debts being your husband. Also from memory you are legally required to transfer the rego within a few weeks after you sell it. So going to the RTA and stating she owns the car may not help you.

I know that sucks but you will have to

1. Pay the fines

2. Transfer the rego

3. Recover the money from his mother either though a court action or a better way.

Sorry ;(

AJ

answered

Q: hi , Im just about to take a loan out Offshore for $1.5 USD and have wondered if I should leave $500-$750K in an offshore account and what Tax Implications could there be.?

A: Hi Alan,

OK Are you using the money for income producing activities in Australia or abroad?

Are you an Australian resident for tax purposes

Are you paying interest on the money? I assume so.

If you are an Aussie resident for Tax purposes and you are using the money to create income then the interest should be tax deductible and any interest earned on the money left in the OS bank account will be taxable.

Hope that helped.

AJ

answered

Q: Hi I have been trying to change accountants from a Melbourne firm to a Sunshine Coast Firm the new Accountants have sent a ethical Letter to the old accountants to release documents and tax records but an outstanding bill of my ex wifes hasn't been paid and they wont release any information or even respond to my emails and phone calls by business and tax returns are being held up by this. Can you please advise what I can do ?

A: Hi There,

Yes they are entitled to a Lien on your books and records.

There is no Legal or ethical obligation for them to release records unless their bill is paid.

Sorry. You can dispute their bill but you probably won't get your records until it has been paid.

AJ

answered

Q: We had a plumber come out and he fixed the issue in one hour. He gave us the invoice and it included a $90 service call and $100 for the one hour of work. Doesn’t the service call fee cover at least the first 30 min or so work?

A: Hi There,

Basically, they can charge whatever they like. There is not any legal standing that requires them to cover the first 30 minutes. ;(

I would suggest when engaging any tradie always check the call out and the hourly rate.

AJ

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answered

Q: A friend of mine he been at court three times for disqualify drive license, now he had an accident and was reported for driving without care and attention, now he have a court to go again, what would happen if he don’t attend the court and instead move to different states??

A: Hey There

Not a lawyer but I have some experience here.

A bench warrant may be issued by the court. Which means you are wanted or your friend is wanted by the police.

It is one thing to piss of the police but an entirely different thing to piss off a judge.

You must attend court otherwise there are serious consequences.

answered

Q: Hi there,
There is no category listed for my query regarding tertiary education so I’m just putting it out there. Long story short, My wife is doing a diploma in nursing, the company she signed up with went down the gurgler, after a six week period in limbo another company took over at the same place under a new banner with the same muppets running the show. Since such time it has gone from pretty ordinary to really bad. What type of solicitor deals with education issues?

A: Paul,

You don't need an education-specific lawyer. This is a contractual situation. However, It sounds like they went into administration/liquidation and then started up again. If you are owed money you should have received a notice from the liquidator about a creditors meeting. So you probably won't be able to get that money back at all. It is a waste of time and money.

Did you guys pay for the diploma or was it funded through FEE Help? Maybe you can complain about the Fee Help http://studyassist.gov.au/sites/studyassist/helppayingmyfees/fee-help and say they never delivered the course and you don't want to be charged.

I would just pull out. If you have paid new money to the new place then I would suggest asking for a refund an then going to your local court and apply for a "liquidated damages claim" in the small claims division. You can do this yourself with the assistance fo the Clerk or get a lawyer to draft one probably cost you around $300 - $400. This is capped by the way so it will not be thousands.

Hope that helped ;)

AJ

answered

Q: A company want to pay to put an advertising billboard in the front yard of the house I current live in and own (mortgage) as advertising. How should this work with tax? I understand I do not need to register for or charge GST as earnings from this will be under 75K. What other tax would I need to pay and at what rate? Is this included as income? Really struggling to find any information on this. Thanks

A: Hi There,

OK they may ask you to get an ABN otherwise they may withhold tax from you and pay it directly to the ATO on your behalf. See what they say. The ATO MAY not allow you to get an ABN because you need to be op[erating a business to get one. They are clamping down on ABN's.

As for the income if you use yourself then yes it will be added to your personal income when you do your tax return.

Hope that helped.

AJ

answered

Q: I have just registered as a sole trader. I will obviously have to set aside my own tax and super. Will concessional or non concessional contributions to super will be more beneficial to me?

A: Hi there,

Ok for super advice you need to talk to a licensed advisor.

Things to know

1. As a sole trader you don't need to pay super but saying that I personally think it's a great idea to have some savings for tomorrow.

2. As for setting aside you tax we have a progressive tax system which means you pay different percentage based on your income. Although 100k attracts a 40 something percent rate the effective tax rate for 100k is only 25%. It's good planning to set aside this cash so you don't get caught.

Hope that helped

AJ

answered

Q: Hi, I recently have started my own business, and I run out of an appointment book. Receive cash and eftpos transactions. When it comes to tax time, how do I show my earnings? Do I deposit the cash into a seperate account into my bank? Or is it ok to deposit and transfer into my house deposit savings account and description it as Business earnings?

A: Hi There,

OK are you a Sole Trader? or a Company?

Assuming you are a sole trader it is ok for you to deposit the money into your own bank account because at the end of the day you will be assessed on your total income.

However, for practical purposes it would be better to segregate your work and personal life. Have one account for the business and pay all bills from that account. Deposit all monies into that account. If you need to pay yourself a "wage" take a predetermined amount each month.

Try not to pay for personal expenses here and there from the business or with business cash. It will get confusing and it will end up costing you more for the accountant.

Hope that Helps

AJ

answered

Q: hi there just needing some sound advice. my mother recently passed away suddenly and has left her house to myself and my siblings will we have to pay capital gains tax on this house if we sell. we both reside in the house at the moment,also will we have to sell with the 2yrs of her death?

A: Excellent Advice from Brendan...

answered

Q: We run an I.T business and do quite a bit of contracting work with various government bodies. The terms are usually 30 days and most of the time things are ok but we are keen to accelerate our growth plans and would like to investigate business finance options such as debtor finance. Will lenders look at an I.T business for finance?

A: Hi There,

Debtor finance is a good way to assist a service industry business. There are several forms including non disclosed and disclosed.

However, beware of the charges. There is a line fee, a drawdown fee, an interest component. When you end up evaluating it all it can look to costs you only 8% but end up costing you over 20%.

If you own property then you would usually be able to get a business loan or a personal loan.

Hope that helped.

AJ

answered

Q: Hi. As part of a financial settlement I was ordered to take over the mortgage on an investment property my ex-partner had prior to us getting together (and we maintained whilst together). It has always been solely in his name and soon the mortgage will be in mine. My question is, if I sell this property will I have to pay capital gains tax on it? He only lived in it for 6 months prior to it being used as an investment property.

A: Ok really interesting question.

I am no expert but there are exemptions for CGT if there are family law court orders.

Seek out a specialist in this field.

Sorry cannot be of more help.

AJ

answered

Q: I was recently involved in an accident. It was on a wet day after a long dry spell so roads were slippery. After entering a roundabout we lost control of our car came to a stop but the person behind ran into us. We are uninsured because our car was an old car not worth insuring. We have received a claim from the other persons insurance. Are we liable to pay their costs? In my opinion it was an unfortunate accident although I do believe the other person had time to stop.

A: Ok should talk to a lawyer. Generally if they hit you from your behind they are at fault.

Were you facing the correct way when you were hit?

Sorry cannot help more.

AJ

answered

Q: i have been operating a hotel three years and now cannot contact the owner what can i do?He wants to sell business and we have a buyer but we cannot find him anywhere.

A: Do you pay them rent or anything?

Try this...

Send them 1c and then in the section where you can put details write PLEASE CONTACT SUE
Then send another 1c and write O4XX XXXX XXX or what ever your number is

Then when they see their bank statement you have sent them a message?

I know it is thinking outside the box but if that is all you can do then try that if the normal channels don't work.

AJ

answered

Q: We are a building company charging a client labour and materials that were putchased on their behalf. My question is when we invoice for material reimbursement, do we use the price we paid to our supplier with Gst, and add snother 10% Gst, or the net price of the material, then gst which is the same amt as we paid?
Im hearing lots of opinions on this but need to know what the law actually is on this?
Thanks,
Rayna

A: Hi Rayna

Brendan is correct here.

You see when you pay for the goods you pay $100 and the ATO gets $10

Then you get to claim that $10 back in your own BAS

Then you charge that $10 when invoicing the client.

So at the end of the Day, the ATO will only get $10. all up.

Hope that clears things up for you.

AJ

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answered

Q: If I purchase an investment property through my SMSF and then on reaching retirement, I choose to wind up the superfund and transfer the house to myself for Owner Occupation, do I need to pay Stamp Duty on the transfer to myself, or is this exempt.?

A: Hi Ken,

Yep you can sell assets to yourself from the SMSF as Brendan suggested.

https://www.superguide.com.au/smsfs/smsf-investment-can-we-sell-fund-assets-to-members

AJ

answered

Q: Hi, is there any 'pay per hour' accountancy services ie. need a 20 minute call to ask questions and pay a fee for that...without having to buy a years worth of services or the like?

A: Good Advice from Brendan.

There are also R & D consultants who will take a cut of your return instead of hourly.

Do a google search.

AJ

answered

Q: Hi, I am completing my R&D form, and it asks if "Is the R&D entity that is registering the head company of a consolidated or multiple entry consolidated (MEC) group?" - During the year we created a wholley owned 'sub' company for trading, and some R&D expenses were spent through that entity. Is it simple just to assign those expenses to the head company or do we need to merge for tax purposes?

A: Hey There,

ok so only one company at a time can claim the R & D grant generally unless your nominate for the MEC. There are provisions about the size of the group I think $20m in total aswell. This dictates the percentage you will get back and or claim.

If you are in a loss you can get actual cash back.

Getting back to your issues check this out.

If you are the head company of a consolidated group or MEC group, your subsidiary members are treated as part of you (the head company) while they are part of the consolidated or MEC group for income tax purposes. Therefore, the R&D tax incentive applies to your consolidated group or MEC group as if it is a single entity.

https://www.ato.gov.au/Business/Research-and-development-tax-incentive/In-detail/Guides/Who-can-claim/?page=3

Like Brendan said this is a complicated area and under scrutiny at the moment from the ATO. We have a department that deals with R & D claims so get in contact if you want help with this.

AJ

answered

Q: How to I pay my own taxes and super?

A: Great answer before.

Also if you are self employed as a sole trader you are not required to pay Super.

Saying that it is always good practice to put something away for tomorrow. There are concessions and in fact the ATO will contribute some super aswell under certain conditions if you are a sole trader.

Hope that helped

AJ

answered

Q: My wife and I bought out place 3.5 years ago for 370K. A recent valuation placed it at 650k today. The increase being a bit of luck and some renovations etc. We are considering moving, and deciding whether we hold onto our current place and rent it out or sell it. Could service it and the bank is willing to lend it. What I'm worried about is capital gains tax. Given that we'd probably be planning to sell in 2-3 years, and the appreciation will probably slow, is it better to sell now?

A: Just remember CGT only happens when you sell it.

If the property goes up yes you will pay CGT but so what the property has appreciated.

In all honesty CGT should not be the driver of the reason to sell. The real driver should be will it go up more than the nett payments over the next three years.

Do a cost benefit analysis but CGT is a by product not the reason.

Hope that helped

AJ

answered

Q: I would like to do some work through an online work marketplace like freelancer.com or Fiverr. Do I need to get an ABN to do this kind of work? I already have a full-time job, this would be more of a side-hustle. Thanks,

Amy

A: Short answer is yes. If you transact business you need an ABN.

If you don't have an ABN then the person paying you is required to withhold a tax. Assuming they are an Australian business.

And you will have to include the income and expenses on your personal income tax return.

AJ

answered

Q: I am thinking of leaving a full time role to set up my own business but concerned about the initial cashflow. Everyone is telling me to go for it so I’d like to ask about finance and can I extend my home loan before starting the business. The unit is probably worth 500k and the home loan is $210k. Is this a good way to get started as I already have a number of clients in the waiting?

A: Hi Jacqui,

All top answers,

Before you go and use your money on a business venture there are a few things you should really ask yourself.

1. Should you be in business?

2. Is there a market for you goods or are you friends just telling you its a great idea?

3. When will you run our of cash?

Did you know that 10,000 companies go into liquidation every year and really 10,000 people go bankrupt?

Answer those first 3 questions before you go and spend a dime and also remember MVP. Minimum Viable Product. What is the cheapest and quickest way to get a product out there or service.

Good Luck!!

AJ

answered

Q: Hi
My daughter is a second year apprentice earning $10 per hour. She has just started doing a second job working in a bar and they are not taking any tax out of her $600 approx a month she earns from this.
Will she get a tax bill ??

A: Hi There

She cannot claim the tax free threshold at 2 jobs at the same time. They should be taking tax out. Get her to sign a new Tax Dec Form.

AJ

answered

Q: Hi. I am interested in buying my first investment property here in Australia and I am considering hiring a buyer's agent who charges a fixed fee (13k). Does anyone recommend using one or will I be better off doing everything myself? What's your experience?

A: Hi There

I have had mixed review from clients. Some have had good success and some have had failure.

I think the key thing is to get sharp on what you want in terms of returns, pricing etc. Make sure if you are using a buyers agent they do a full demographic analysis so you can assess the investment.

AJ

answered

Q: Hi there,
I bought a piece of land last year and want to sell it now. Is there any way to reduce CGT? does it make any difference if i invest the profit in a new property?
regrards

A: Do you hold it personally? Do you hold it as an enterprise? Do you hold it in trust or a company.

Have you held it for more than 12 months?

What is your current income?

All these issues will determine the rate of CGT.

Thanks need a little more clarification to assist.

AJ

answered

Q: My company made a loss last year. This year a profit for the year was made, but not enough to offset the the previous years loss. In the current company tax return do I include the previous losses in 7R (Tax Losses Deducted)? and do I put zero in 7T (Taxable/net income or loss)?
ie
Loss for 2016 was 46000
Profit for 2017 was 33000
I understand that 13U will include all losses carried forward.
So for the current years company tax return I would make the following entries?
7R (Tax Losses Deducted)=46000
7T (Taxable/net income or loss)=0 or 33000?
13U (Tax Losses carried forward)=13000 (less than 100k, so no Losses Schedule?)
Regards

A: Hey John,

Got me there. Let me have a quick look.

Ok have a look at this and see if you tick any of the boxes.

Generally, under $100k you will be ok but please double check.

AJ

answered

A: OK again i need to check tomorrow.

7T = 33,000 profit

plus or minus non-deductible expenses like superannuation for accounting purposes you would have taken a deduction BUT for the tax, you can only deduct what you actually pay.

Lets assume you have non reconciling items.

OK the in 7 R losses deducted = 33, 000

then your taxable income is 0

and you losses schedule should have a carried forward of 13,000

Sorry let me just check you said losses for 2015 were $46k is this brought forward losses or Just 2015 losses.

So if there were more carried forward losses then these would be included in your losses schedule.

Make sense?

AJ

answered

A: Hi John,

OK do not hold me to this because it has been a few years for me doing these personally.

As I understand it yes 7T has the profit for the year.

You then deduct the tax losses deducted in Section R in our software it follows directly through.

Don't forget to complete the losses schedule for the future carried forward losses.

Ok hope I am right on this one. Pretty sure I am. I'll check with the staff tomorrow and confirm.

Thanks

AJ

answered

Q: I have a job that gives me 127K + suoer (9.5%) and I have applied for a NFP job that gives me 110K + salary packaging + super (9.5%). I am trying to work out what my take home pay difference will be (assuming I have HECS). Could anyone assist? I'm less concerned with knowing 'savings' obtained with salary packaging, and more concerned with take home pay (i.e net loss/gain).

If necessary, welcome to assume equivalent expenses to SP value in the former to assist with comparison against latter.

A: Hi there,

Ok to work out your tax go to www.shuriken.com there is a tax calculator at the top of the screen.

Do understand that some NFP are exempt or reduced FBT. Therefore you may be able to get up to 15k or more totally tax free because there is no FBT.

Hope that helped.

AJ

answered

Q: I bought a $2,500 laptop for a University Thesis in 2014/15 financial year. I've realised that I've actually been using it to work from home from 2015 to present (2017). My questions are:

a) I didn't initially purchase it for work use. Because I have been, is this claimable?
b) If it claimable, I've never claimed this expense previously, can I claim depreciation for the past years as well?

A: Hi There

Brendan just gave you excellent advice. I'd follow it. I have nothing to add.

AJ

answered

Q: Hi,
If I sell my own principal place of residence after I have renovated it under one year, Will I have to pay capital gains tax? I know if it's your principal place of residence everyone has told me No, however, I don't trust this because it would be 10 mths later and a capital gain of around $60,000 and I don't trust that the ATO will not add tax to that?

Appreciate your feedback

A: Hello There

There is a general exemption for your principal place of residence.

Check this out for more help.

There will be no CGT

AJ

answered

Q: We incurred a loss on a property investment within our smsf and would like to ask if it was possible to transfer the loss into a new smsf or our personal tax?

A: Yep

What they said is bang on ;)

AJ

answered

Q: Where can i appeal against the decision of a Deed Administrator (Deed of Company Administration) about my claim against a company? The Administrator was appointed by the Company. If we also want to complain the Administrator, which authority should we approach? The Administrator, the Company and us are based in Sydney, NSW.

A: Hiya,

Ok administrators and liquidators are governed by ASIC.

If you have an issue then contact ASIC.

Do a search on the administrator as they may have a history of being in trouble.

You should have received details
Of the meetings and a proof of debt. However only if the Director listed you as a creditor would you have been notified.

Hope that helps.

AJ

answered

Q: My car has been hitten by another car while I was waiting for the traffic light about 10days ago. I only have third party cover insurance, car driver who hitted my car said it is company car so he will submit the form when he goes to work. I’ve contacted insurance company which that car has insured, but they are saying there is no claim have been submitted. I contacted the driver but he is saying that he submitted the form to cfo, nothing he can do at the moment. What should I do now?

A: Hi there,

First instance I would complete an online police incident report stating the facts as you see them.

Next point of call would be to contact the CFO directly and find out what is happening.

Falling all that You can go and get a quote for your car to be repaired now and provide the other drivers insurance details to your panel beater who, before commencing work, should contact the insurance company for you.

Good luck

AJ

answered

Q: Hi, I recently start my own skincare range now. I would like to sell my skincare through Priceline or chemist warehouse. I had tried to contact them, but no reply. Can anyone in the industry give me some advice?

A: Congratulations Shelley,

Selling to a large chain is somewhat difficult and complicated. They usually have a procurement manager. You generally have to have volume and be prepared to contribute via rebate or cash for advertising and or product placement. You may also have to provide the marketing material like the cutout, banners etc. In some instances, you have to leave stock on consignment and even stock the shelves yourself. I do not say Chemist warehouse is exactly like this but these are common practices from the larger retailers and not specifically to your industry

Some advice? Without knowing a whole bunch about your product and volumes and price.

1. Have a clear distribution model and thoroughly think about the consequences of changing that down the track.
2. If you are still keen for the big boys maybe do some research about their process of appointing new suppliers
3. Try and find a smaller brand that is in there and try and reach out to them for some assistance.

Have a look at some industry companies and or bodies. I did a search and found these guys http://applynow.net.au/jobs/API285-category-manager-strategic-procurement

Good Luck

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answered

Q: When a master degree HR student apply for an entry level co-ordinator job, the interviewers are demanding a mininmum of 3 yrs experience, Please can someone suggest an alternative solution to get into the HR field with no previous experience? .,thnx Rob

A: Hi, Robert,

Maybe go and do some internship work for free to get at least some experience.

3 Years may not suffice but offering free work in exchange for experience may get a foot in the door at that place of employment or at least it will provide a reference for another entry-level job.

AJ

answered

Q: Q: I own my old home outright (The house in my name ) we want to knock it down and rebuild a single storey, We are also have our names in a property in which to help our only daughter to buy, Currently we are living in our daughter new home because our old home is unsafe to live in.
My daughter and us have borrowed 1.2mil in order to buy her dream home, my wife and myself total income approx$95k
When my daughter get married how do we obtain a construction h/loan to build the old house ?Rob

A: Hello Robert,

I know your question is about Loans but there are some severe Capital Gains Tax (CGT) issues for you here.

You can only have 1 principal place of residence exemption at any one time. What does that mean? It means if you sell your original house and it is considered your home then you pay no tax. If it is no longer considered your primary home then you will have to pay CGT for some period in which it no longer becomes your primary residence.

Likewise, because you and your wife and your daughter's name is in the new house it means that if the dream home is ever sold then you may be open to capital gains tax on that property.

This is not something I can advise over the net but I suggest you go and see a tax accountant to make sure you do things to eliminate the CGT issue OR worst case you know in the future you may have a tax liability and what that looks like.

AJ

answered

Q: Same Unit. I have an equity line and the unit is the surety over the loan.We paid back the equity loan to 0 dollars.
We then purchased a house that is now our residential home.We borrowed more money on the equity loan to buy the house. We use the equity loan for normal day to day use as well.The unit is now rented out.The unit is still the surety over the loan. Can we claim any interest off the unit for tax purposes or is it not possible because we paid the loan down before?
Rod B

A: Hello There

Yep sorry it sucks but not deductible. When you pay down the loan on an investment property and then use the funds back for personal use then no go on deductibility.

Maybe consider selling the old property, keeping the cash to pay of the home.

Use the home to buy another property. Then you will get the best tax advantages.

At the moment you are going to be stung on Tax because the rental income has no interest offset.

Thanks

AJ

answered

Q: Hello. Could you give me the accounting entries when a client pays a deposit in a client deposit held account right through to when a sales invoice is done and the customer pays? I need to know all the debits and credits for this with the corresponding accounts. Thank you.

A: OK Penny

DR Client Deposit Bank Account
CR Prepayment

Getting the money into the Client Deposit Account

DR Receivables
CR Sales

Registering the sale

DR Prepayment
CR Debtors

Reducing the debtors because it was pre paid.

Hope that helps.

AJ

answered

Q: I'm looking to start a new company with two others. Our new accountant recommended that we use a unit trust as the business entity. The reasons being is that we have varied business billing amounts, frequency and scenarios so we will operating and managing cost centres within the company. The idea is that the unit trust is a distribution mechanism and we are operating like individual businesses within. Tax implications? Is this a weird business structure?

A: Hey Terence,

There are many ways to run the business.

A Unit Trust means you will have a specific number of units. The year end profit will be distributed according to the number of units you hold. So if one part of the business is making more than the other, then the profits may not be split according to the effort. Keep that in mind as you may need to pay different levels of wages.

A Trust will require a Trustee. I would suggest using a company as a Trustee commonly called a corporate trustee.

From a tax perspective, you are taxed personally on what you receive from the trust. Good to know is a trust cannot distribute a loss but can roll it over BUT if the TRUST does not pay out the profits then they could be taxed at the top marginal tax rate. So if you want to retain some money in the business you have to pull it out pay tax and reinvest it.

OK sometimes the units are placed in your kids or spouses' name or someone in a lower tax bracket to reduce tax.

However, a fixed unit that does not allow any flexibility like a discretionary trust. There are limits

Another way is to have a company and then they have a discretionary trust as the owner. You have one trust your business partner has another.

Company makes money pays 27.5% tax and then you keep the money in the business for use or pay it to yourself down the track as a Franked Dividend.

So you can also have a partnership.

There are issues around control, liability and asset protection on all these things and also Capital Gains Tax.

Go and grab a second opinion or ask the accountants the pros and cons and get them to put together a table.

Hope that helped.

AJ

answered

Q: The transaction that could not result in a credit balance in a debtor's account is:

sale of goods on credit that will be paid for in the next accounting period
receipt of a deposit for work ordered
return of faulty goods by a customer after payment had been made
payment by a customer after the debt had been written off as irrecoverable

I'm having trouble understanding this question. Could anyone please explain?

A: Hi Jack,

Hi sorry for the delay in getting back to you.

I hate double negative questions.

so what is the question asking?

So a debtors account? That is the debtors ledger showing you what they woe you. This is an asset account and dhence is a debit balance when someone owes you money. Dr Debtors Cr Sales.

so..

1. Sale of good on credit - Dr Debtors Cr Sales hence a debit balance

2. Receipt of a deposit Dr Cash Cr Debtors - OK so this is a credit balance

3. Return of Fauly Goods after payment has been made. Dr Stock CR Debtors hence Credit Balance

4. Payment DR Bank Cr Debtors - Credit Balance

Hence the answer is 1...

AJ

answered

Q: I use a vehicle for my job as I am required to travel to multiple sites each day, and I am also required to carry around a stepladder as well as multiple tools and safety equipment. Am I allowed to claim tax deductions on toll roads traveling to and from my first and last site of the day, as well as travelling between sites? Cheers.

A: Hi Alex,

The work to home home to work rule is true but does not apply in your case.

There are 2 things here.

1. Different sites non-regular. If you go to a non-regular work site then the cost to this place is deductible. So if you travel a lot you are ok. If however, the site becomes regular then no you cannot claim.

2. Yes if you carry something bulky for work then yes the whole trip is deductible.

Hope this helps.

Use the log book method as you will have a better deduction as opposed to cents per kilometer.

AJ

answered

Q: I'm helping an elderly friend keep track of their shares for taxation purposes. Their accountant gave them a form to complete for which they did remember what information needs to be put in each column. However on the sales side of this particular form is a column called Sales Value. They have forgotten what figure goes in here. Do they put the gross figure of the sale of shares which includes the brokers fees or is it the net figure excluding the brokers fee into this column?

A: Ok so sales price means price of share times the number of shares.

AJ

Hope that helped.

answered

Q: Hi, I recently incorporated my business about a year ago to Pty Ltd. ASIC have sent me a renewal for my business trading name. Do i need to renew this, even though i now have my PTY LTD?

Thanks

A: In a word yes!!there is a yearly subscription to the government otherwise they will de-register it.

AJ

answered

Q: How do you set up
Acn
To
Trust
To
ABN
To
Trading as different businesses to reduce tax

I want a concrete cutting business that hires tools off own hire company and uses own labour hire company

What are the pros and cons. How do I apply for this?

A: Hi There

Setting up a trust to reduce your tax is a little complicated but totally legal.

However, if your sole purpose for setting up the trust is to reduce tax then you may be caught by the anti-avoidance provisions contained in Part IV A of the act.

Therefore setting up a trust structure for protection purposes is also a good reason.

So There are a few ways to do it.

Set up a trading company
Create a Family Trust
Have a Corporate Trustee ( ie a company as the trustee)

An Alternate is just to set up the trust with a corporate trustee.

There are other ways but these are the most common. The full details need to be known, your reasons and the future. If you use a family trust then it's likely you can get investment into the business because it is a family trust.

Go and seek out some good advice and this is a costly process but well worth it in the end.

AJ

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A: Hi There,

Ok without looking at the form you have I would suggest that you have

1. Date of Acquisition
2. Price per share
3. Number of Shares
4. Cost Brokerage

Then next to it

1. Date of Sale
2. Sale price per share
3. Number of Shares
4. Sale Brokerage

The difference is then your gain.

Hope that helps...

AJ

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Q: I'm looking at an Income Statement. Inventory obsolescence is $990,000 while provision for inventory obsolescence is $1,133,000. Can you explain to me why the provision is higher than the expense account?

A: Hello,

Could also mean that there is 990k this financial year but there was a provision from last year of 233k

Have a look at last years balance sheet and P & L.

Thanks AJ

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Q: My husband and I are starting a new business. We had to declare estimated salaries for employees for the rest of the financial year. We guess it might be approx 120k however now have decided to payroll all staff through an agency and staff will be covered by agency workcover. Will we still get a bill from workcover at the end of the financial year??

A: OK Workcover is very interesting and you can get stuck paying it for contractors.

Generally you cant get stung twice hence if you are using an agency and they are covering it and it is included in your rate they charge then no I doubt you will get a bill.

AJ

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Q: Can primary production land in a trust for a child qualify for farm expenditure deductions from the trustees personal income tax ?

A: Hey There,

OK the answer is yes and no.

1. Is there a profit motive?

2. Is there income? You must have a profit motive to be able to deduct expenses.

3. Glen is correct you can not distribute losses but you can store them up and carry them forward.

4. And it would not be for the Trustees personal return. You have to remember that a Trustee acts with different hats. One for the Trust as Trustee and one for themselves as a citizen. These should never overlap.

Hope that helped.

AJ

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Q: Can I legally include a private transaction that was made by me several months before the date I founded my business in my company tax return?

A: Patrick that is funny....

OK Caroline,

The answer is yes and no.

What was it for? If you purchased a computer personally then you sell it to the business. BUT if you incurred expenses before the business was established like legal fees then no you cannot claim those after the fact.

AJ

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Q: We have a house that is worth approx $800,000 and we have just purchased a property in Queensland for $420,000. We would like to move up there but are unsure whether to rent out our current home or sell it? If we do sell it can we put any surplus funds into our super without it being taxed? We are about to hit our 50's and haven't got much super. We need to know what our options are.

Any advice would be helpful

A: Hiya

As James states, there are limits you can shove into Super which is after-tax dollars.

So you sell the house in Melbourne and it should be tax-free because it is your primary place of residence.

You can only have one primary place exemption at any one time.

Whether you rent or buy you really should run the numbers including Income, Tax, capital allowance deductions and tax effect.

You will probably have to several hundred dollars getting a good accountant to run the numbers but it will be worthwhile in the long run.

AJ

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A: Hello

OK is this a question with 4 alternate answers?

AJ

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Q: My Dad recently passed away leaving my Mum as sole Beneficiary. There was some money in a joint Bank account and some more in Dad's own name.
My Mum is already in a Nursing Home and suffering from Dementia. Will the money transferring from Dad's single name to Mum require a re-assessment of Mum's pension and whose responsibility is it to commence any necessary review ?
Also if Mum was to gift some of the money to siblings, what limits apply without impacting her pension.
Thanks.

A: Hey Ken,

Sorry to hear that news. Usually when getting the pension a couple is assessed together on assets outside the family home.

Obviously the couple limit is higher than the individual. Have a look on the Centrelink website.

As for gifting money you can BUT Centrelink only allow a reduction of your asset based of a certain amount each year. So give away 100k does not mean reducing your assets for the means test for 100k

Hope that helps.

AJ

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Q: I was terminated on the grounds of absentee, there was previous warning in regards to my sick leaves and late notification, on the date I was terminated by the manager, it was over the phone with no written notice. After a month, the operation manager contacted, given me 2 options whether to reinstate to the formal position or have all my annual leave paid with 5 weeks additional as compensation for incorrect procedure of termination
Is my case strong? Should I take the offer?

A: Hi there,

Go to fair work NSW. Everything depends on the size of the business and the length of employment.

Have a look there are issues about abandonment of work etc.

On the website you can easily answer some questions that show you what to which you are entitled.

AJ

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Q: I would like to import a product from overseas, and gain exclusive distribution rights here in Australia. What should be the first steps?

A: Hi there,

When you say what are the first steps do you mean finding the product, negotiating, registering a business, registering for GST. It is a very open question. Could you be a little more specific please so I can assist.

AJ

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Q: Hi,
My husband and I have a property worth around 900,000. We owe the bank approx 450,000.
Should we rent the property and use caladeral to purchase new property? Rental income would be around $450 per week.

Or shoukd we sell and but another property outright?

We also have savings of $100,000 to put towards an investment

Any ideas please

Thank you

A: Belinda,

Is this your primary residence? Will this house go up in value more than where you are proposing to live? The current rent is not a very high return and you will pay tax on that money but equally you can deduct expenses from that income.

You are allowed to rent somewhere else and still keep your original house capital gains tax free for up to 6 years.

So have a think about the capital gain aspect and run some numbers. We can run the numbers for you if you like.

AJ

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Q: Hi , I'm having trouble getting payment from a company that I have completed work for, what are the best ways to make them pay? Thanks josh

A: Hi there,

Ok call them first, send letter of demand then you can sue them in the small claims division of the local court.

You can lodge this yourself at the local court.

Costs will be about $300 all up for you if you do it yourself.

AJ

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Q: I am looking for a small business tax adviser that understands fintech startups and the concessions and grants that are available and also research and development in investment start up businesses?

A: Rebecca,

We were made for each other. I have a Msc in e-commerce as well as accounting qualifications. I have got clients R & D grants and we can meet at the greengate at Killara to strategise.;)

Contact me ..

AJ

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Q: Hi, my family sold a property overseas and want to send me money as a gift. Do I pay tax on money received as gift from an overseas account and is there an amount that is free of tax? Thank you!

A: Hi there,

There is no gift tax in Australia however you may get questioned by AUSTRAC.

Also the ATO may consider this income and you may need to prove it is not because it was a gift.

AJ

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Q: We are both on Centrelink pensions we have seperated but share care and a housing place as we have two children who have severe lifelong disabilities and care for one child each. They are just about to be left a house in a will from family would it be smart to put it straight into the children's names or into one of our names as we will be lifelong guardians?

A: Hi Karen,

Are theses aged pensions? The family home is exempt. So even if you put it in your name you should be ok.

It could go in your name on Trust but it really depends what the will says.

I would be holding it on trust. You need a lawyer to go through everything and perhaps consider planning what happens if someone happens to your guys.

Thanks

AJ

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Q: Hi we are a family of 3, Mum, Dad & Daughter. We are going to run a caravan park which pays $350pw retainer plus 30% of income. (Average annual income is only $110,000 so we will get about $33k pa plus retainer).
We know we have to set up an abn but how would we do that so it shows each of us earns a third to reduce the tax?

A: Hi there,

I would suggest a family trust where you are all beneficiaries.

Your total income will be about 60k and split 3 ways means probably no tax.

Go and see a good Accountant.

AJ

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Q: Our daughter has just got her P’s and we are looking at getting her a car. If our budget is around $15-16000 does anyone have any recommendations as to the type of car?

A: Second hand Vw golf is always a good choice.

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Q: Hi,
My dad is selling his house to give me money to buy my first home. around 400 thousand. we were just told we would have to pay tax on this. is there a way around this? We wanted the house to go in just my name for the first home owners grant.

A: Hi Sarah,

There is no Gift Tax in Australia. Please see article here. http://shuriken.com/gift-tax-blog/

There is NO tax for you to pay here.

Call me to chat if you like.

AJ

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Q: I am a graduate accountant who is interested in commencing either the CA or CPA programs. The only thing that is holding me back is finding an external mentor. Unfortunately, in the company that I currently work none of my managers are accredited.
How can I find an accredited mentor?

A: Hi Daniela

Call CPA and the Institute. I know CPA charges a few if they find one for you but you can find your own aswell.

Maybe talk to a lecturer that you know to see if they know anyone. All you need is to find a CPA or a CA. thats all the qualifications they need to do the mentoring.

AJ

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Q: I have a house in a good capital gains area and have moved into my partners house 6 months ago. He died and gifted me the house and 100 acre property. I have other income from smsf ( just turned 60), and another blue chip property shared with business partner. ( the rental provides a reasonable living for us both). My question is about the tax of the gift property in low capital gain area ( but where I choose to live) , and if I would best to rent the former dwelling, or sell it.?

A: Hi Suzie,

Wow a few issues here and some life decisions. I'll see if I can assist.

1. OK before you and your partner got together you had your house and he had his property? The first thing to consider is the main residence exemption for capital gains tax. Where two people meet and then get together and move into a house one of the parties must make a main residence election. The main residence exemption applies to the house you live it. You are not required to pay CGT on your main residnce.

So you have a choice to pick one of the properties as the main residence for both. You may also choose to apply the main residence to different properties but then you would only get 50% as an exemption when you sell it.

It applies from the time you moved in together - So this is an issue

2. Gift Tax - There is no such thing as gift tax in Australia. We had death taxes a few years ago but they are gone. OK if the property was considered the primary residence for your partner and it has been willed to you then you have a window of 2 years to sell that property and then it is exemt from CGT.

3. Renting or selling - You need to run the numbers, land tax, etc..... Also the farm was it pre 1985? CGT does apply on a property but not the 5 acres around the house. If it is a pre 1985 asset then you are fine but if not then there may be some CGT if you sell the farm even though it was the primary residence.

4. Deductions - There is an age old thing about improvement or repair. If you improve you generally deduct over the life of the asset. If you repair then you can usually get a deduction. see this awesome guide from the ATO https://www.ato.gov.au/uploadedFiles/Content/IND/downloads/Rental-properties-2017.pdf

You really need to get in front of an accountant and spend some money. There are many many issues here.

Thanks

AJ

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Q: I am starting a travel blog and hoping to use it as a tax write off. I'm currently spending approximately $40k a year on travel and thought that if I start a business I might be able to claim some of the expenses on tax. My question is, what company structure best suits my needs?

A: Jonathan

Firstly in order for you to take deductions you need to qualify the primary purpose test.
If your primary purpose is to try travel and have fun then try and use this to write of for Tax then you will not qualify for the primary purpose test and in fact you will be committing a crime. Look at Part 4 A anti avoidance provisions.

So going forward you need to have a business plan / business intention. You need to be motivated by Profit. Hence you may have to prove to the ATO that you are intending to make money out of this venture.

If you are not planning on making this a big business then from a cost effective point of view a sole trader may be the best way to go.

AJ

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Q: Am I still able to claim tax deductions that are billed under my personal name after I set up a PTY LTD company?

A: Hi Michael,

Yes and no.

For example if you bought a laptop in your psetonal name you can sell it to the company and get paid.

If you ran the business as a sole trader then you can claim expenses personally.

Just remember some expenses you can take a deduction others you have to deduct over several years.

Hope that helps

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Q: I work overseas and live overseas more than 6 months a year. I want to take a loan from overseas to buy a house in Australia do I pay tax on the capital or just interest earned if any?

A: HI Sharyn,

If you take a loan from Overseas and then use that to invest in Australia you will not pay tax on that Loan. In fact, I assume you are paying interest on that Loan overseas? This will be deductible.

The rental income from the property will be Taxed in Australia less any allowable deductions.

Hope this helped.

If you need anything email

aj@shuriken.com

AJ

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Q: My mother has passed intestate and her superfund has determined to pay 100% of her super to her spouse, my step father. My step father intends dividing the super keeping 20% for himself and paying my mother's 4 adult children each 20%.
Can you advise whether it is appropriate I consider this as gifted funds and do not pay tax on my 20%, or should I pay the ATO the applicable tax which I believe is 15% of the inherited super funds?

A: Hi Tim,

If that is the case, and I don't know if you can, then you would probably have to pay Tax on your distribution as you were a non-dependant.

You probably need to spend some time with someone and run the numbers and assess all the facts and find out what is the best what and how this will impact your step father.

It depends on his age, it depends on his other assets. I mean the Super would have been included when assessing him and your mother in the past anyway BUT saying that there are different levels for a couple as opposed to a single person.

If you want some actual advice happy to book you at a time. In the mean time I would just go and get all the facts together and do some research on the net.

AJ

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A: HI Tim,

What James said is accurate but to give you a little background there are specific reasons why there are free.

Payments from a Superfund to a Dependent tend to be tax-free. If you received the money directly from the fund then you may have to pay some tax. So this is a good thing.

The money from your Step Father top yourselves is considered a gift and there is NO gift tax in Australia.

However be careful because the money your Step Father received and then gave away can still be counted as his assets for the purpose of assessing the aged pension. Just because you give it away does NOT mean it cannot be counted in your Assets.

Thanks

AJ

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Q: I have been offered a job but need to get an ABN as that's how they pay just wondering what taxes I have to pay week to week as the job is using there truck there fuel and there insurances just need to know what I have to put aside each week?

A: Hi David

The first thing you really need to understand is if you are a real contractor or an employee.

Just because they make you get an ABN does not automatically mean you are a contractor.

What Suresh has said above is correct but have a look at this first and keep aside that money.

https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=ECDTSGET&anchor=ECDTSGET/questions/ECDT#ECDTSGET/questions/ECDT

If you need help email me aj@shuriken.com

AJ

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Q: When selling a portion of your business do you need to pay capital gains tax on the percentage that you are selling?

A: Hi Michael,

Are you selling shares in the business? Are you getting a new Partner? Is it a Trust? How long have you had the business?

There is small business relief exemptions available for CGT for small business which includes roll over, Money into Super, 15-year exemption rule.

If you are getting a new partner then maybe an issue of new shares is the better option.

send me an email with details aj@shuriken.com and we can have an in-depth chat. This is a complicated issue but not difficult.

AJ

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Q: Is the policy different for an international student to buy a house compared to a permanent resident/citizen?

A: Hi Henry

If we forget the borrowing money issues there are rules about which foreigners can purchase property and what type of property they can purchase.

Generally, an OS purchaser can buy a new property or a second-hand one which is a knockdown. They cannot buy used houses.

BUT saying that things changed a few years ago which enabled some visa holders could buy a second hand property and then have 2 years to sell it once they have left the country.

http://firb.gov.au/real-estate/

check out this site and it should help. OR go and see an immigration person.

call Jacob Wyllie http://www.fcbgroup.com.au/people/jacob-wyllie/

Thanks

AJ

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Q: Can you please tell me if older brother is the main person to our father's estate, if any details decisions are to be made, does he not have to consult the rest of his siblings concerning renting our dad's house out. As no one consults me on anything?

A: Hi There

Not a Lawyer so this is NOT legal advice.

Generally the deceased would have nominated a person or persons, through their will, to be the Executor.

Has an Executor been nominated? Have you done Probate? Maybe as Patrick said have a look and go and see a lawyer. In the first instance see who has been named as the Executor.

AJ

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Q: Hi. I've just started working with a courier franchise. I need my own ABN. Ive never worked with a abn no before and was wondering what is the best way to go about it and reduce my tax and what I'm able to claim. Thanking you.?

A: Hi There,

What Linda said is correct BUT also you need to determine if you are a contractor or an employee regardless of what the person paying your bills says.

Check out this link from the ATO and determine if you are a quasi-employee or a bonafide contractor. https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=ECDTSGET&anchor=ECDTSGET/questions/ECDT#ECDTSGET/questions/ECDT

You may be considered a PSI. Personal Services Income which means your ability to get some deductions reduces even more like splitting the income with a spouse or claiming rent expense.

Have a look at the Tool and see what it says. Just because an employer claims you are a contractor does not necessarily mean you are. You may be entitled to Super.

Thanks

AJ

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Q: Hi, I have recently purchased half of the Family farm. For accounting/ bookkeeping purpose, is it best to set up a partnership or trust? Open to other suggestions

A: Hi Tammy,

As stated by the other people if you have purchased it already then you must have a structure already.

Maybe the question be about tenants in common or joint tenancy?

What are you trying to achieve? Do you need to start with that question first before you then choose the vehicle by which to own the asset?

Work out the answer and then pose the question again and maybe we can help.

email me for clarification aj@shuriken.com

AJ

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Q: What is the tax rate for ETP termination of employment for an individual who is over 56 - is it 32% or 17%?

A: HI There

OK there answer is not a simple question. It depends on what is included. Things like a genuine redundancy and Long Service leave or unused annual leave can conflate the situation.

For full details check out this ATO paper which explains all.

If you are still unsure drop me an email aj@shuriken.com

https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/BUS00355078N709800513.pdf

AJ