Foreign Resident CGT Withholding
Capital Gains Tax Withholding applied from 1st July 2016 where taxable real Australian property with a market value greater than $2,000,000 (excluding GST) is disposed of. This is targeted at non-resident vendors; however it applies to all vendors regardless of their tax residency status. The default position of the legislation is that all vendors are deemed to be foreign residents unless they provide a clearance certificate to the purchaser.
The essence of the legislation is that for all sales of taxable Australian real property will be subject to a 10% of the sale price withholding tax and remitted to the Commissioner of Taxation, regardless of if the land is residential, commercial, vacant, primary production. This 10% is targeted at non-resident vendors, however will also apply to resident vendors who do not provide the clearance certificate. The Australian Taxation Office will issue a clearance certificate where the vendor provides the Commissioner with the approved form and based on that information there is nothing to suggest that a vendor will be a foreign resident during the specified period.
This legislation also applies to non cash transactions and can also apply where there is no cash consideration such as gifts, matrimonial property settlements, distributions from deceased estates and in specie trust distributions which will all require consideration of the market value if the transfer value is greater than $2,000,000.
As with most legislation, the devil is in the detail and care must be taken in regards to not only ordinary commercial property dealings and obtaining the clearance certificates to avoid a 10% remittance to the Australian Taxation Office, but also for non-commercial dealings.
Changes To Superannuation Proposals
The Government has announced several changes to the package of superannuation proposals made in the 2016 Federal Budget.
An annual non-concessional contributions cap of $100,000 from 1 July 2017. This will replace the original proposal of applying a lifetime non-concessional contributions cap of $500,000 to all non-concessional contributions made on or after 1 July 2017. Under the new proposal, individuals aged under 65 at the start of the financial year will continue to be able to 'bring forward' 3 years worth of non-concessional contributions. The bring forward would restart after the expiry of 3 years. There will be transitional arrangements which will apply in cases where an individual has triggered their bring forward but not fully utilised it before 1 July 2017. If you decided to not implement a recontribution strategy due to the lifetime limit proposed, discuss with your financial adviser if you should make a non-concessional contribution this year.
Individuals with a superannuation balance of more than $1.6m will no longer be eligible to make any non-concessional contributions after 1 July 2017. The eligibility threshold of $1.6m will be based on the balance at 30 June of the previous year. Discuss with your financial planner whether you should make a non-concessional contribution this year if you will reach the $1.6m balance prior to 30 June 2017, as you will not be able to after 1 July 2017 no matter your age or work status.
Catch up concessional contributions has been deferred until 1 July 2018. This defers the proposal to allow individuals with superannuation balances of $500,000 or less to carry forward unused concessional contributions for a period of 5 years.
If you are over 65 years of age and meet the work test this year, but won't next year, discuss with your financial adviser if you should make a $100,000 non-concessional contribution in June 2017 and deferring allocation until 2017/18.
The risk of cyber crime is growing. With the extent we all use technology in business, including portable devices such as smart phones and tablets, the potential cost of an attack can be significant, whether from down time, contaminating others, being held to ransom or from having a penalty imposed. The likelihood of such attacks is also increasing, largely due to their continued success of the fraudsters which helps them fund the development of their technology and promote their techniques. There should therefore be heightened attention to this risk.
These risks enter the computer systems from sources such as hackers gaining access via the internet or wifi, or via human error such as users inadvertently allowing them access via emails, web pages or electronic media.
No-one is as yet able to eliminate this risk entirely but there are some simple steps that can be taken to significantly reduce the risk, and the cost need not be no overly expensive. Some of these include;
- Emails - Prohibition on opening suspicious email attachments, how to identify which are a risk and not clicking links in emails from unfamiliar or suspicious senders
- Web Sites - only visiting reputable web sites
- Passwords – required on all devices, including requirements regarding their strength, manner of recording and frequency of change
- External devices - caution with use of USB drives and other data drives, and not using any other devices or computers on the work network until an induction process has been completed
- Wifi – consider banning the use of free wifi services on work related devices as these are a significant risk
- Remote Access - control of remote access to work related devices via password and restrictions on what devices and/or locations can access the data
- Monitoring – regularly test compliance with policies
- Training of your employees and steps to increase their awareness
- Regularly installing software updates
- Use of software tools such as programs that prevent any executable files being introduced
- Anti virus programs and regular updates
These policies have to flow from the top down, with the business leaders enforcing the policies and importance of compliance.
Note that any incidence of such fraud may need to be reported to the ATO and penalties can apply.
If you need assistance please contact our office.
Every business operator should have developed a clear and concise "elevator pitch" that you can present to an enquirer at any time. The concept of elevator pitches originated in New York City around the theatre areas, when aspiring business operator would get into a lift with a prominent producer. Whilst the lift travel from the ground floor would give a "pitch" to the producer about the story that they've written or service that they could provide. The pitch had to be completed in around 30 seconds because, by that time, the lift has reached the floor to which the producer was travelling.
The following is a suggestion on training for an elevator pitch to suit your business. The three key introductions are:
- You know how… Finish by naming your target audience. What's their target and how you're going to assist them to get new clients.
- Well, what we do is… What are the key benefits that you supply to your customers, such as saving them time and making more profit, supplying them with products to assist to deliver services that they want to deliver?
- In fact, our products will… Include the best case you can think of that backs up what you've said in your previous sentence (What we do is…). This might be a summary of the key products or services that you're producing that will help your target market to achieve their aspiration.
Remember not to talk too much. The whole presentation should be completed in 30 seconds. Simplicity is the key to a good elevator pitch. You need to be able to clearly identify the benefits you offer but look at it from the listener's point of view. Once you've drafted this, it's then essential that you practice, practice and practice, so that the presentation sounds very authentic. Hopefully it will create a great impression on the listener.