Our Top 5 Financial Resolutions

 

 

 

 

Start the new Financial year with our top five resolutions to boost your financial success:

1. Develop a budget – this is the most valuable tool for managing your finances. 

2. Manage your debts – chip away at your debts and you’ll spend less on interest

3. Improve your cashflow – have a look at your incomings and outgoings to see if there are ways to even out your cash flow.

4. Start saving – create a savings plan, remembering that every bit you put way adds up and makes a difference in the long run.

5. Focus on the future – get your finances under control and start  concentrating on your long-term investment strategy

Start now….  by watching our short video series:
Part 1 – Will I Have Enough to Retire?
Part 2 – Why Superannuation is Good for your Retirement
Part 3 – Are SMSF Worthwhile and When?
Part 4 – How to Build up my Super Balance?
Part 5 – Mortgage v Super – What is Best?
Part 6 – Pre-Retirement Strategies
Part 7 – How to Evaluate Good Advice

Tax Planning for Individuals and Businesses

As the end of financial year approaches, it is important that you take the time to focus on tax planning and tax issues that affect you before 30 June 2018 arrives.

We have outlined some of the key tax considerations in our Tax Planning information sheets.  Click on the following links to download these:

Tax Planning for Businesses – 2018

Tax Planning for Individuals – 2018

Should you require further information or assistance in tax planning, please contact your TAG adviser on 03 9886 0800.

Death of a Partner: A Guide for Families

Together with the Council of the Ageing (COTA) Victoria, one of TAG’s clients was involved with writing a guide for Families on the Death of a Partner.

This is a practical guide about the people who you need to notify and the legal processes that follow after the death of a partner.  It also helps people navigate and deal with the red tape during this difficult and emotional time.

‘Death of a partner: A guide for families’ was launched at the Registry of Births, Deaths and Marriages in Melbourne last week as part of the Victorian Law Week activities.  For a copy of the guide, click here

For more information, visit https://cotavic.org.au

 

TAG Tips – Federal Budget, what you need to know

Treasurer, Scott Morrison, delivered his third Federal Budget on 8 May 2018 and the third budget of the Turnbull government. We have summarised the Federal Budget essentials for our clients including individuals and small business owners.

Personal Income Tax

A number of measures were announced that seek to reduce personal income tax over the next seven years.

From 1 July 2018

  • A new non-refundable Low and Middle Income Tax Offset (LMITO) will be introduced to provide tax relief of up to $530 for taxpayers earning up to $90,000.
  • The offset phases out from $90,001 to $125,333. This offset will be in addition to the existing Low Income Tax Offset (LITO).
  • The Government will also increase the upper threshold of the 32.5% tax bracket from $87,000 to $90,000.

From 1 July 2022

  • The LITO will be increased from $445 to $645, extending the upper threshold of the 19% tax bracket from $37,000 to $41,000.
  • The upper threshold of the 32.5 % tax bracket will be increased from $90,000 to $120,000.

From 1 July 2024

  • The upper threshold of the 32.5% tax bracket will increase to $200,000, removing the 37% tax bracket completely.

For taxable incomes exceeding $200,000, taxpayers will pay the top marginal tax rate of 45% (excluding the 2% Medicare Levy).

Business Taxation

$20,000 Asset Write-Off

Businesses with less than $10 million turnover can continue to immediately write-off asset purchases of less than $20,000. This has been extended to 30 June 2019.

Non-Compliant PAYG withholding

From 1 July 2019, businesses/employees will be unable to claim tax deductions for wages and contractor payments (where the contractor does not provide an ABN), where they have not withheld any amount of Pay-As-You-Go (PAYG) from these payments.

Limiting Tax Deduction for Vacant Land

From 1 July 2019, income tax deductions will be denied for expenses associated with holding vacant land, such as interest expenses and rates. These costs may be added to the Capital Gains Tax cost base of the land where they would ordinarily be an element of the cost base. This is an integrity measure to discourage land owners from holding vacant land, a process more commonly known as ‘land banking’.

Other Business Announcements

From 1 July 2019, a limit of $10,000 will be introduced for cash payments made to businesses for goods and services. This will not apply to transactions with financial institutions or consumer-to-consumer non-business transactions.

Single Touch Payroll

Single Touch Payroll will be introduced from 1 July 2018 for businesses with 20 or more employees and from 1 July 2019 for business with less than 20 employees.

It was announced that from 1 July 2019, there will be additional funding for small business to transition to Single Touch Payroll reporting.

Private Taxation

It was announced that there will be no changes to the Small Business CGT concessions themselves, but indicated a specific integrity measure where partners in partnerships that alienate their income by assignment in rights to future income of the partnership will no longer be able to access the Small Business CGT concession on the capital gain made in relation to the right.

Unpaid Present Entitlements (UPEs) to be treated as loans under Division 7A

While the ATO currently applies Div 7A to UPEs the budget announcement is that they will legislate the ATO interpretation.

It is unclear how the new legislation will treat quarantined UPEs which the ATO have previously accepted in their ruling that the quarantined UPE are outside the scope of the ruling.

The changes announced in the 2016-17 Budget in relation to Div 7A loans have been deferred to 1 July 2019.

Superannuation

No. of Members in a SMSF

The maximum number of members within SMSF will be increased from four to six from 1 July 2019 to allow for greater succession planning.

SMSF Audits

For SMSFs with a good compliance record, the requirement for annual audits will be changed to a three-yearly requirement. To be eligible, SMSFs need to have a clear audit history and a record of lodging returns on time for three consecutive years

Work Test Exemption for Retirees

From 1 July 2019, for those aged 65 – 74 years will not be required to satisfy the work test in order to make personal contributions to superannuation in the first year that they would otherwise not satisfy the test. To qualify, the individual must also have a balance of less than $300,000.

 Superannuation Guarantee opt-out

From 1 July 2018, individuals who have multiple employment arrangements, and where those arrangements result in employer superannuation contributions exceeding the $25,000 concessional contribution cap, will be able to nominate to exclude earnings from the superannuation guarantee regime.

 Measures to Limit the Erosion of Member Balances

From 1 July 2019, there will be a:

  • 3% annual cap on passive fees on low balance accounts (less than $6,000);
  • a ban on exit fees;
  • changes to insurance arrangements for low balance accounts, members under 25 or accounts that have been inactive for 13 months; and requiring the transfer of all low balance inactive superannuation accounts to the ATO.

Trusts

Testamentary Trusts

From 1 July 2019, an integrity measure for minors receiving income from testamentary trusts will be introduced. The concessional tax rates available for minors receiving income from testamentary trusts will be limited to income derived from assets that are transferred from the deceased estate or the proceeds of the disposal or investment of those assets. Income received by minors from testamentary trusts is currently taxed at normal adult tax rates rather than the higher tax rates that normally apply to minors.

Round Robin Distributions

The specific anti-avoidance rule that applies to closely held trusts that undertake circular trust distributions in a “round robin” manner will be extended to family trusts.

From 1 July 2019, these types of arrangements will give rise to tax on such distributions at a rate equal to the top personal tax rate (plus Medicare Levy).

Disclaimer: The information contained in this document is general in nature only.  Professional advice should be sought before acting on any aspect of this document.  Liability limited by a scheme approved under Professional Standards Legislation.

More Information

For all the Federal Budget’s key initiatives, visit the Federal Government budget website at Federal Budget 2018-2019.

If you have any questions after reading this please contact your TAG Financial Services adviser on (03) 9886 0800 or via email.

Banking Royal Commission – it’s disappointing!

What is being brought to light by the Banking Royal Commission is disturbing, but for us in the industry it’s not surprising that some of the big institutions have not always acted in their clients’ best interest. Nearly 3 years ago, we made the move to obtain our own financial planning licence, so we are not tied in any way to a big institution. Even though the expense in obtaining and maintaining our licence is high, at least we are controlled by our own Board and can provide the services that clients need and want, with full disclosure of fees.

There are two things that really worry us about the consequences of the Royal Commission. Firstly, the bad behaviour of a few could seriously affect the next generation as they avoid the industry all together and don’t seek out quality financial advice. Secondly, the addition of another level of red tape that will add to the administrative burden and make the service more expensive. The result will be that another group will be excluded from seeking financial planning services because they simply cannot afford it.

The regulator should deal with the perpetrators in a manner that would act as a deterrent. This would allow the rest of the industry to move forward and talk about the good things that financial planning does for client outcomes. We have a lot of great stories and we have clients referring their family members and friends to our service. It’s a great service that is important to the financial security of our clients and shows how a good adviser can make a real difference.

The element of the financial planning industry (sadly quite significant) which is focused on bonuses for selling products and not on great client outcomes is a blight on our industry which is incredibly rewarding when done professionally and ethically.

If you would like to find out more about TAG:

Leigh Jobling, Partner, Investment Advisory and Wealth

Evolving with Gooroo

At TAG Financial Services, we are always looking at ways to improve our infrastructure and people, so we continue to grow and thrive in a challenging and evolving industry. We are excited to announce that we will be working with Gooroo over the next 3 years.  Gooroo will assist in the development of our team to ensure TAG can reach its strategic aspirations.

Mark Templeton (Managing Director, TAG Financial Services)

TAG has a long and proud history for over 20 years. As a Board we have recognised that in order to achieve our strategic aspirations, we must take advantage of new technology that can help us prepare our business and team for the future.  Gooroo provides scientific insights and tools that will inform our people strategy and how we design and develop our teams. We are very excited about the role and impact Gooroo will have.

About Gooroo

Gooroo is a people analytics platform.

Gooroo’s globally-unique technology uses artificial intelligence and neuroscience to help to organisations and individuals advance their ability to make better decisions that create better outcomes and futures.

Gooroo technology is used to:

  • make quicker and more accurate hiring decisions
  • design workforces and high performing teams
  • assess cultural alignment and impacts
  • evaluate organisational readiness for innovation, growth and the future of work
  • build permanent and contingent worker pools that speed access to higher quality and talent that fit the culture
  • inform development and career pathways for individuals
  • dramatically improve communication effectiveness to staff, customers and communities.

For more information about Gooroo, go to https://gooroo.io/

Investing – what’s stopping you?

What stops people from investing?  Michelle Griffiths, Partner, has spoken to 1,000s of people over the years and has heard all sorts of different reasons why they don’t invest…

In this short video, Michelle draws on this knowledge and takes you through:

  • The key reasons why people don’t invest
  • How to decide when it’s the right time
  • What you need to get started
  • Simple ways to get started

To view the recording click here

Disclaimer: The information contained is general in nature.  Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).

The Connected Practice

TAG Financial Services was recently featured at the MYOB Incite conference, in a video series on ‘The Connected Practice’. This highlights the amazing benefits a client can achieve using an Adviser (accountant) and a Bookkeeper to grow their business.

The results will surprise you.

To watch the MYOB ‘The Connected Practice’ videos, click on the links below:

Adviser (accountant)

Bookkeeper

The Client

The Connected Practice concept centres around creating value for clients through a dynamic collaboration. Today’s business owners want quick, accurate information, which can be relied upon to make important business decisions. Accountants and Bookkeepers working together can unleash opportunities to take a client’s business to the next level. Using different skillsets, each party brings a unique level of insight and experience to the table, which can drive potential growth for the client.

The platform for this is the cloud technology that we use to record and access the data, which integrates with the software used by Accountants.  Connecting all parties to the same reliable data allows clients’ needs to be addressed swiftly.

The Adviser (accountant)

Clean data that is instantly accessible through cloud technology allows the accountant to produce compliance work efficiently and cost effectively. This creates opportunity to add value through advice in areas such as tax, structuring and financial analysis. Accountants can utilise their technical knowledge to identify potential growth and business opportunities for the client. In an advisory role, the Accountant can help the client achieve their business goals and provide clarity by helping them make intelligent business decisions.

The Bookkeeper

A bookkeeper works with clients to produce clean data through efficient transaction processing functions. This includes advising the client on how to fully utilising technology, optimising efficiency with software and cloud-based products to produce accurate, timely business data that drives business success.

By working together, the Adviser (accountant) and the Bookkeeper can create more value for clients than ever before.

 

How to get a free holiday every year for the next 30 years

Interest rates are at historical lows, lenders are fiercely competitive; and our customers are winning.

In a recent example, a TAG client accepted our invitation to a complimentary home loan review.

During the review it was discovered their home loan interest rate was close to a full percentage point above the sharpest rate we can secure from our panel of 30 lenders and hundreds of products. A simple refinance of their home loan resulted in a saving of $4,475 p.a. or $134,250 over the full term of the loan. Needless to say, the client was elated and decided to treat her family to a holiday every year for the next 30 years!

To find out more:

Complimentary Meeting: TAG can provide advice on your own circumstances with a complimentary home or investment loan review. Contact us to organise a time.

Join our Mailing List: for TAG updates and invites to info sessions and webinars.

Contact Us: if you have any questions about home and investment loans.

Disclaimer: The information contained on this page is general in nature. Professional advice should be sought before acting on any aspect on this page.

TAG Finance and Loans Pty Ltd ABN 25 609 906 863 Credit Representative Number 483873

National Mortgage Brokers Pty Ltd ABN 88 093 874 376 Australian Credit License 391209

Buying Property in a SMSF v Individual Name

Investing in property can be a great way to finance your retirement. But what’s the difference between buying property in a self-managed super fund (SMSF) versus buying property in your individual name? Will you be better off buying property in your superannuation? It’s not a straightforward answer. There are a lot of variables that influence this answer including the asset type, liquidity outside SMSF and contribution levels, just to name a few.

We’ve outlined the key benefits and drawbacks in buying property in SMSF.

Benefits

Combining Investing as a Family

By combining your superannuation account balances with other members of your family, you may be able to invest in a larger asset.

Tax Effective

Superannuation receives concessional tax treatment on assets, where earnings within the SMSF are taxed at 15%, and capital gains at 10% for assets held more than 12 months.  If you hold onto the property until retirement, the earnings may be tax-free.

Pre-Tax Repayments

You can salary sacrifice additional income to super and pay off your loan faster.

Supporting your Business

If you buy a commercial property, you are able to lease the property to your business at current market rates.

Drawbacks

Lack of Diversification

Having all your eggs in one basket can make it difficult when you need cash from your superannuation fund.

Set up Costs

You need to consider SMSF set up costs and higher interest rates when getting a loan through your SMSF.

No Personal Benefit

The investment property must be purchased at ‘arm’s length’ on a strict commercial basis. If the investment is a residential property, you cannot purchase from, lease to, or rent to a related party.

Cash Flow Certainty

Ensure your level of SMSF contributions and rental income are enough to cover all costs.

Your investments need to be aligned to your long-term plan to achieve your retirement goals. Do your homework and get the advice from a financial professional. A little focus goes a long way.

To find out more:

Complimentary Meeting: TAG can provide advice on your own circumstances before you start this investment strategy to ensure you get the best outcome for your retirement. Contact us to organise a time.

Watch our video: Buying Property in Super.

Join our mailing list: for TAG updates and invites to info sessions and webinars.

Contact Us: if you have any questions or want to commence your journey to financial success with a complimentary meeting.

Disclaimer: The information contained on this page is general in nature.  Professional advice should be sought before acting on any aspect on this page.