How much Insurance is enough?

Like it or hate it, insurances are a necessary part of life. Given the risks involved when owning a house, driving a car, playing sport or running a business, insurance is the mechanism for protecting your financial interests against loss or damage. Just as people insure their material possessions, there is nothing more valuable than life itself and the income needed to live life.

When assessing the level of cover required, consideration must be given to such factors as (this list is not exhaustive):

• Level of income
• Income needs and desired lifestyle
• Large expenses – private school fees
• Other ongoing childcare costs
• Investment Assets
• Debts – mortgages, credit cards, etc
• Cost of refitting a house to accommodate a wheelchair

The ASIC Money Smart website has a great Life Insurance Needs Calculator .

What to do now?

How to be the best SMSF Trustee…. and how this can benefit your retirement

A Self Managed Super Fund (SMSF) can help you focus on having the funds to maintain a good lifestyle in retirement.

When you set up a SMSF you become the trustee of your SMSF. You can have the fund’s technical aspects handled by qualified experts, but you are still the ultimate boss!  Yes, you are the head of the Board when it comes to running your SMSF and the regulators are making it very clear – ignorance is no excuse. 

You don’t need to fear this if you:

Have the advice of experts
Make sure you have a super adviser. At TAG, our advisers are superannuation specialists. We provide professional development to the accounting industry via our annual superannuation seminar. TAG Super Seminar is Australia’s longest running and most successful superannuation seminar and is designed to help financial advisers keep up to date with superannuation changes.

Ask questions
Our advisers meet with every Trustee on an annual basis, which gives the Trustee a great opportunity to understand and ask questions about their specific situation.

Understand your responsibilities
TAG offers all Trustees of the funds we administer complimentary Trustee Training, which explains your role and responsibilities.

How do you make this happen?
Come along to our next Trustee Training to ensure you are the best Trustee you can be and optimise your retirement.

Tuesday 18th June, 6-7pm. REGISTER 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).

10 Investment Principles for Success

At TAG, we don’t believe in get rich quick schemes and we don’t have magical investment formulas. Our 10 investment principles are based on years of experience and successful implementation which we use for ourselves and with our clients.

1. Have a plan and set some goals

2. Establish your timeframe

3. Determine your tolerance to risk

4. Focus on quality and be patient

5. Resist the temptation to follow the herd

6. Invest regularly

7. Understand your cash flows

8. Never over commit with investments

9. Do something, as soon as you can

10. Get advice

What Should You Do Now?

For most people, getting started is the hardest step. Here are a few actions that you can take today:


If you have any questions, please don’t hesitate to contact me or your adviser.

Leigh Jobling, CPA
Partner, Investment Advisory & Wealth
TAG Financial Services


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).


Webinar Available: Superannuation – the post election landscape

In this 30-minute webinar our Super Specialist, Brenda Hutchinson provides a Federal Budget overview and discusses how you can make the most of the new Super changes for both your clients and for you.

More Information: If you would like more information, please don’t hesitate to contact Brenda Hutchinson.

To receive more updates on Super and more, join our mailing list.

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

Single Touch Payroll (STP) – Action Needed


Single Touch Payroll (STP) is a new regulation that changes how businesses report tax and super information to the Australian Tax Office (ATO). Previously, businesses could report this information once a year but now need to report each time they run their payroll.

Software providers (like MYOB or Xero) can tell you about the STP solution that they offer.

For small employers, with 19 or less employees, need to report through STP from 1 July 2019. Large employers, with 20 or more employees should now be reporting through STP.

For more information, go to:

If you are unsure whether you comply with STP, please contact your TAG Adviser.

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).

Cancellation of Insurance in Super


There are new rules around insurance in Superannuation Funds. From 1 July 2019, Superannuation Funds will cancel insurance on accounts that have not received contributions for at least 16 months. Your Fund will contact you if the insurance is about to end and ask whether you would like to continue.

Before cancelling your insurance, think about the benefits of keeping insurance through your superannuation:
• Your superannuation fund will get a tax deduction for the premiums – making it less expensive.
• You can have the cover you need, even when your budget is tight.
• It’s easy to manage as premiums are automatically deducted.
• Sometimes you will be accepted for cover without requiring a health check.
• You can generally choose the amount you are covered for.

Insurance is one of those things you pay for but never want to use and it can seem expensive. You would not drive your car around if it wasn’t insured, so you should carefully consider if you are not insuring you!

If you have any questions about your insurance, please contact your TAG Adviser.

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).

Woolworths Group Limited Buy-Back 2019

On April 1, Woolworths Group (WOW) announced it was undertaking a $1.7 billion off-market buyback that would complete by Friday May 24 2019. Offers to participate are open from Tuesday April 16 2019, until Friday May 24 2019. If you own WOW shares you should have recently received in the mail an offer to participate in the buy-back of WOW shares.

The offer is to buy the shares back off you at a discount to the market price, WOW is attempting to buyback the shares at the lowest possible price.

So why would a shareholder agree to sell at a lower price than you would get on the market? The incentive is that of the price received, $4.79 is capital component and the balance being a fully franked dividend. With the upcoming election bringing with it a possible threat to future benefit of franking credits, this might be a good opportunity for you.

The transaction may also create a capital loss which can be used to offset capital gains you may have, or think you may create, on the sale of other investments in this 2018/19 or future financial years.

For WOW shareholders on the lowest tax rate (or 0%) or who have a SMSF (either 15% or 0% tax rate) this could be worth considering. If you would like TAG Financials Services to work out the implications based on your current situation please call Leigh Jobling or Arden Shaw on 03 9886 0800. We can calculate the cost/benefit for you to assist you to make an informed decision.

If you sell your shares, but ultimately wanted to maintain your holding of WOW long term, you would need to re-buy them on market, which would incur a trading cost including brokerage.

Buy Back Discount

The Buy-Back will be conducted through a tender process. Eligible Shareholders who choose to participate can offer to sell some or all of their Shares to WOW:

  • at a discount between 10% to 14% of the Market Price.  The Market Price will be determined based on the average price across the 5 trading days prior to the close of trading on Friday 24th May 2019,
  • at the Buy-Back Price, which is an election to sell your Shares at the price determined by WOW following completion of the tender process, or
  • you can also nominate a Minimum Price below which you are not willing to sell any of your Shares.

Your Options

  1. Do nothing and keep your WOW shares.
  2. Participate in the Buy-Back, with all or part of your holding – you need to take action to participate.

If you do participate and want to retain the same holding as now, once the buy back is complete, you will need to purchase the shares back on market at the prevailing market price.

Based on similar buy-backs recently we expect that the buy-back will be heavily oversubscribed and thus investors would be likely subject to potentially large scale-back. If you own less than 180 shares you must offer them ALL to be bought back by WOW. If you own more than 180 shares and the buy back is scaled back and you are left with less than 65 shares they will buy the remainder of those shares as well.

We have analysed the value of the buy-back for those with a 0% tax rate using the closing market price of Woolworths on April 1 of $31.08 – see Chart 1 below. Using $31.08 as a guide and assuming the maximum 14% discount applies, this equates to a $26.73 buy-back price. With the capital component being $4.79, the other $21.94 would represent a fully franked dividend, which would have a $9.40 franking credit attached. For a tax-exempt Australian investor, we estimate the buy-back at a 14% discount would be worth approximately $36.13 (disregarding the time value of money), representing about $5.05 per share benefit or 16% more than the market price of WOW on April 1 2019.


Using these assumptions, if you sold say 1000 shares in the buy-back as opposed to on market, that had an assumed cost base of $20.00 per share:

  • 0% tax rate: $5.05 per share or $5,050 BETTER OFF.
    Brokerage to buy-back the 1,000 shares would reduce the gain. The capital loss may not be useful if you have a super fund 100% in “pension mode” or have 0% personal tax rate.
  • At 15% tax rate: $0.35 per share or $350 BETTER OFF.
    You would also have a $10,860 capital loss available to offset against any current or future gains. Brokerage to buy-back the 1,000 shares would be an additional cost.
  • At 39% tax rate: $7.17 per share or $7017 WORSE OFF.
    You would have a $10,860 capital losses available to offset against any current or future gains. Brokerage to buy-back the 1000 shares would be an additional cost.

Naturally if you have more or less shares, or WOW scale back the buy-back more or less than expected, this would vary the outcome to you.

In all of the above examples if you chose to repurchase the shares, brokerage would be an additional cost. You would however have the benefit of a higher cost base carried forward.

If you choose to re-purchase, you may be better or worse off depending on movement in the share price.


  • The 15% tax rate applies to a super fund which is NOT paying pensions to the members of the fund.
  • The 0% tax rate applies to funds that ARE in “full pension phase” – subject to $1.6m pension caps.
  • If gains are made on assets held less than 12 months and the capital losses are used, the tax benefit of the losses would be greater.

The price you receive is unknown at the time you complete your form.

More Information

If you are interested, believe there are other benefits to you or would like further information, please do not hesitate to contact us.

If you receive investment advice from another adviser (e.g. a stock broker), we encourage you to contact them.

If you wish to participate in the buy-back, you need to follow the instruction on the letter you received.  You can submit your tender online, or download the tender form – to be completed and returned to the share registry by 5.00pm Friday 24th May 2019.  We suggest you take the necessary action well in advance.

If TAG provide you with investment advice, we need to know your intentions by Friday 17th May 2019.

Should you have any queries, please do not hesitate to contact Leigh Jobling or Arden Shaw on 03 9886 0800.


Disclaimer:   This is general information only and is not advice to participate in the WOW buy-back, or to buy hold or sell any shares in WOW, as we have not taken your personal circumstances into account. Whether participating in the buy-back is appropriate for you will depend on your personal circumstances and we encourage you to seek advice before acting on this information.  If TAG Financial Services are your investment advisers we welcome your call.  If you use your own share broker, you should speak with them, or we would be pleased to discuss the mechanics of the buy-back with you. There are numerous different options for participating in the buy-back, however we have only selected one for illustrative purposes only.

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 2019 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 – 2019

Tax Planning for Individuals – 2019 

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

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).

Do You Need an Estate Plan?

Most people believe Estate Planning is for the wealthy. But the issues don’t discriminate, and the concerns are often the same for everyone;

  • Who will get my money when I die?
  • Do I own everything / how much of my wealth is part of my estate?
  • Do I want assets to pass to specific people?
  • What are the specific tax time bombs and how do they impact my beneficiaries?
  • How do I ensure my wealth passes to my children and grandchildren, and is not exposed to family disputes?
  • How can I protect my beneficiaries from themselves, for example drug/alcohol dependencies or poor decision making?
  • How to manage family / relationship issues when considering Estate Planning.

Half of the country do not have a Will. Most people believe that everything will be OK, and while we may have that expectation, often we see the impact of unresolved or unclear intentions when beneficiaries have a financial windfall in place.

 What is an Estate Plan?

An Estate Plan is a clear, plain-English practical approach to deal with the above issues. The Estate Plan can then be used to facilitate the legal document e.g. a Will, to ensure your intentions can be followed with minimal disruptions.

For more information on Estate Planning, register and come along to our May Information Session – Where there’s a Will, there’s a Way. 

Alternatively, if you have a question, contact Jason Roccasalvo or Brenda Hutchinson.


Meet the TAG Team – Wendy Waack

Wendy Waack is our newest Partner and in this article Wendy outlines her career journey – and like many females, it is not straight forward.

I served my accounting apprenticeship at KPMG, which was fantastic. I literally had one foot on a plane for an overseas secondment (having just topped my KPMG year for the CA program) when I discovered I was pregnant with my first child. This quickly changed my direction in life and tempered my career ambitions.

Having 2 children, I stepped out of “working life” for a while and juggled family life whilst assisting in a family business. I had ambition but this was balanced with the needs of my family. I became involved in community and sporting groups which taught me about managing people and different expectations of people which developed my skills in different ways.

My goal for myself was to keep on learning and not to give up my accounting career. I bided my time.  I have worked at two accounting firms prior to TAG Financial Services and all those experiences have contributed to the building blocks that make up who I am today and what I can contribute.  Every experience whether at work or not, contributes to the person you are.

At 50, I was asked to be a Partner of TAG Financial Services. For me, this was icing on the cake as I already loved working at TAG. TAG has a culture that many other firms should be envious of, so yes, it is a great place to be. For some, the title of Partner may be the most impressive aspect but for me it is the opportunity to learn, contribute, mentor others and be part of something that makes a difference.

So, whatever stage of your career journey you are at, nothing is unachievable. Work out what suits you, stop being everything to everyone and enjoy yourself.

The Federal Budget & ALP Proposals

Treasurer, Josh Frydenberg, delivered the Federal Budget on 2 April 2019. Below is our summary of the Federal Budget superannuation essentials as well as the ALP policy proposals.

Federal Budget – Superannuation Essentials

Work Test Requirement

From 1 July 2020, individuals aged 65 and 66 will be able to make voluntary concessional and non-concessional superannuation contributions, without need to meet the “work test”.

Currently, individuals aged 65-74 must work at least 40 hours in any 30-day period in the financial year in which the contributions are made (the “work test”) in order to make voluntary personal contributions

This will give people nearing retirement the opportunity to increase their retirement savings regardless of their working arrangements.

Spouse Contributions Age Limit

From 1 July 2020, the age limit for spouse contributions will increase from 69 to 74 years.

Currently those individuals aged 70 years and over cannot receive contributions made by another person on their behalf.

Streamlining Requirements for the Exempt Current Pension Income (ECPI) Calculation

The Budget includes measures to reduce costs and simplify reporting for superannuation funds by streamlining the administrative requirements for the calculation of the ECPI from 1 July 2020.

Superannuation fund trustees will be allowed to choose their preferred method of calculating ECPI where they have interests in both the accumulation and retirement phases during an income year.

It has been confirmed that superannuation funds will not need to obtain an actuarial certificate when calculating ECPI using the proportionate method, where all members of the fund are fully in the retirement phase for all of the income year.

Tax Relief for Merging Funds

The current tax relief for merging superannuation funds was due to expire on 1 July 2020. This will now be made permanent. This will ensure fund member balances will not be impacted by tax when their funds merge.

The aim of this tax relief is to remove tax as an impediment to mergers, facilitate industry consolidation and improve retirement outcomes for members.

Self Managed Superannuation Funds (SMSF) are excluded from this tax relief.

Expansion of SuperStream Rollover Standard

The Government will provide $19.3 million to the ATO over 3 years from 2020-21, to send electronic requests to superannuation funds for the release of money required under a number of superannuation arrangements.

This change, which will take effect from 31 March 2021, will be implemented by expanding the electronic SuperStream Rollover Standard used for the transfer of information and money between employers, superannuation funds and the ATO.

To coincide with the expansion of the SuperStream Rollover Standard, the start date of Self Managed Superannuation Fund (SMSF) rollovers into Superstream will be delayed until 31 March 2021.

Superannuation Insurance

The Government has confirmed a delayed start date of 1 October 2019 for ensuring insurance within superannuation is only offered on an opt-in basis for accounts with balances of less than $6,000 and new accounts belonging to members under the age of 25.

Extension of Bring-Forward Contribution Eligibility

From 1 July 2020, the bring-forward arrangements which currently apply to individuals aged less than 65 years will be extended to those aged 65 and 66, in line with the removal of the work test for members of this age.

The bring-forward rules allow individuals meeting the age requirement to make three years worth of non-concessional superannuation contributions, thereby contributing up to $300,000 in a single year, with no further non-concessional contributions for the following two years.”

ALP Proposals

With a Federal Election set to take place in the next three months and a range of significant tax changes being proposed (but largely undiscussed) by the Australian Labor Party, it seems an opportune time to shed some light on the proposed changes proposed if there was to be a change of government.

There are seven major tax changes being proposed by the ALP:

  • Taxpayers will no longer be able to receive a tax refund from the receipt of franking credits
  • Houses will no longer be able to be negatively geared unless the house is new
  • Capital Gains Tax general discount of 50% will reduce to 25%
  • Family Trust Distributions to adult beneficiaries will be taxed at a minimum rate of 30% (up from 0%)
  • Non-Concessional Superannuation Contribution Limits to fall from $100k to $75k
  • Superannuation Fund Borrowing will no longer be able to be used to purchase a property
  • Company Tax Rate to drop from 27.5% to 25% in the 2022 tax year

Franking credits represent tax that have already been paid on profits made by a company.  In order to avoid the double taxation of those profits, company shareholders were allowed to count franking credits as tax paid on that income and where appropriate receive a refund for that tax where the tax rate was less than that of a company.  The proposed legislation will have a significant impact particularly in superannuation funds where retirees are relying on the refund of those credits to make ends meet.

Negative Gearing allows a tax payer to claim a loss on a rental property when the income from that investment does not cover the costs of that investment.  That loss can then be offset against other income derived by that taxpayer resulting in a lower tax bill.  Negative gearing is a strategy sometimes used by couples to get into the property market when they cannot yet afford to buy a home.  The resulting reduction in their taxable income and therefore their tax payable each year allows them to be able to afford to enter the property market.

The General Discount on capital gains was introduced to take into account that a capital gain can take many years to accumulate and is payable when an asset is sold.  If that gain was measured and taxed on an annual basis (rather than at the end), the tax payable on those annual gains would be lower because the taxpayers marginal rate of tax would be lower.  The 50% discount reflects that when the asset is sold, all capital gains are brought to account in that one year (instead of being spread over many years) which often forces the taxpayer into higher marginal tax brackets resulting in an artificially high tax payable on a gain that has been earned over many years.

Family Trust Distributions have traditionally been taxed at marginal tax rates in the hands of beneficiaries and it is being argued that distributions from trusts are being used to “split” income.  The nature of discretionary trusts is that a trustee acts in the best interests of its beneficiaries (including which beneficiaries shall receive the income generated from the assets of the trust).  Each beneficiary then pays tax on their distribution based on their individual tax situation. To tax distributions to adults at a minimum rate of 30% goes against the nature of a discretionary trust, when you consider that a trustee could allocate a capital amount of cash to a beneficiary (or a portion of a business) and the interest earned on that cash by the beneficiary would be taxed at the individuals marginal tax rate.

The Contribution Limits for non-concessional contributions into superannuation fell from $180k per year to $100k per year in 2016 and individuals can no longer make this type of contribution when their member balance is over $1.6m.  The ALP is proposing to further reduce these contributions to $75k.  Individuals do not get a tax deduction for these contributions and the main purpose behind them is for an individual to be able to quickly build their superannuation balance (often after an asset has been sold) prior to retirement so that they will not be reliant on the government for a pension.  This change seems to be harming the very people that the ALP hold themselves out to be supporting.

Superannuation Fund Borrowing allows individuals with moderate superannuation fund balances to leverage their superannuation monies into a long-term investment asset (property) which is often appropriate for a longer term investment vehicle like superannuation.  This can often mean the difference between retiring with an insufficient superannuation balance or retiring with a comfortable superannuation balance.  Superannuation fund members with significant member balances will be able to buy property without borrowing, where as superannuation fund members with modest balances often need the assistance of borrowed funds to enter the property market. The ALP is proposing that the ability of superannuation funds to be able to borrow will be entirely removed.

The Company Tax Rate dropping from 27.5% to 25% allows companies to save tax on their profits while those profits are retained in the company.  We note however that much of the profits earned in a company will be distributed to its shareholders in the form of a dividend.  The dividend from the company will be franked at 25% instead of at 27.5% and the shareholders will pay tax on the dividend at their marginal tax rates (which in essence will not change).  Thus, while the company will pay less tax, the shareholders will pay more tax based on receiving fewer franking credits with their dividend.

To conclude, the major tax changes proposed by the ALP appear to target low to middle income Australians rather than the “top end of town” and appear to be based on the premise of bringing property prices down to make home ownership more affordable.  A property price crash would unsettle the economy with potentially significant effects on banks (and their willingness to lend to new borrowers) and businesses depending on how far the ripples reach.

More Information: If you would like more information, please don’t hesitate to contact Jason Roccasalvo or Brenda Hutchinson.


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