Category Archives: Monthly Reflections

Updates & Deadlines

A few reminders and pointers for you as we race towards June ..

  1. All our clients will shortly be receiving an offer to take up our optional ATO audit insurance offer for 2017/18. Remember the ATO can audit returns many years after they are lodged & (unlike normal law) you are deemed guilty until you can prove otherwise.  Our policy even covers you for returns prepared by a different agent. Note the new way of paying the premium this year – direct to the insurers, not via me.
  2. The current newsletter can be accessed in the normal manner here. Don’t forget to check the website for updates regularly. This month looks at deductions for work clothing and further details about the $1.6m super balance cap.
  3. Finally, the deadline for 2016 returns is only 6 weeks away. So if you are still to submit your paperwork, please do so soon. Note it’s first come, first served and I am away for a week in May, horse-riding through the Kimberly so won’t be working then!


Quick – get those Non Concessional Contributions in now

Finally, the proposed  super reforms have gone through with many changes to take place from July 2017.

One of these well publicised reforms is a change to the Non-Concessional Contribution (NCC) cap, which is to be reduced to $100k p.a. (previously $180k).

However, there are further changes to the NCC affecting those of you lucky enough to have $1.6m in super, or those who hope to attain those lofty heights in the medium to near term, which have had less press.

As an aside, to maintain reading interest & due to popular request, this is our fairly recent new family member (the horse not the child) which seems to be somewhat reducing our capacity for NCC’s, at least in the short term. He is lots of fun though, especially when I get to ride him while short-thing is at school, and then send her a selfie to really rub it in!


Anyway back to the point….

After 1 July 2017, if you have a total of more than $1.6m in super (whether in pension, transition to retirement pension, or super) you will not be allowed to put any NCC’s into super at all. That’s none whatsoever. Nil. Only the $25k concessional contributions will be allowed (eg SGC, salary sacrifice and personal deductible).

You may ask, why would I want to put more in super as earnings on balances over $1.6m will be taxed? This is quite correct, but the earnings will be taxed at a mere  15% on income and 10% on most capital gains, so it is not that bad really. Additionally if your superfund is invested in Australian shares, it will still receive the 30% franking credits which reduce (or possibly eliminate) any tax due.


The good news is that the old rules still apply until 30 June 2017, therefore assuming you have not triggered the bring forward caps in the last two years (in which case there are transitional rules), this is a last opportunity for those near or over the $1.6m cap and under age 65 (or over age 65 and passing the work test), to pop an additional $540k into super as a tax free NCC.

If you think this might be relevant please call to discuss your situation in more detail.

Lindsay 02 8090 4112

Easter Eggs and Huge Tax Bills!

This post comes as we hopefully enjoy some time off and lots of chocolate over the Easter weekend. Hubby is away and I am not sure where he has hidden my Easter egg, but I am sure he has put it somewhere and not forgotten!

But for some, unfortunately this time of year is not all beer and skittles. It is also the time for what can appear to be a never ending stream of payments to our friends at the ATO.

So what is going on?

Well there are two things happening at this time of year that can catch you by surprise. The first is that the balance of any tax due for the 2015 year is normally due to be paid about now. The exact amount and due date will be on your notice of assessment (NoA) and we send calendar reminders with the NoA to help you remember to pay.

Secondly, the ATO may adjust your quarterly instalments for the 2015/16 year based on estimates derived from your recently lodged 2015 return. This is standard practice for the ATO, but the method used to calculate the instalment can catch you by surprise.

To explain further let’s use an example.

The ATO have estimated that Fred needs to pay a total of $100k  in instalments for the 2015/16 year. They believe this will cover his 2016 tax liability, assuming Fred’s financial position is similar to the prior year.

Fred has already paid two instalments of $10k each and is waiting in anticipation for his Q3 March instalment notice to appear in his mygov inbox. Fred loves the way the new mygov system requires the use of email, sms codes and a web browser to access a single piece of paper. It can take him all day!

However, Fred’s enjoyment is quickly wiped out when he sees how much he owes. The ATO want $55k for the March instalment – how can this be!

Well the ATO want 3/4 of the annual amount due by the third instalment. So in this case they want $75k by quarter three.  As Fred has only paid $10k x 2 to date, the top up required to bring the cumulative total to $75k is a huge $55k. Which unfortunately falls due at about the same time as his balance of 2015 tax.

Sobbing quietly, Fred resorts to eating vast amounts of chocolate!

Fred’s future instalments will drop down to 1/4 of the total due ie $25k, but that doesn’t make April any easier.

Nobody likes surprise bills, so to assist, we provide timelines which detail when and how much tax will need to be paid over the year. These can be used to manage cashflows, can be hung on the fridge as a constant reminder of your upcoming payments, or can be used for dart practice. Whichever is more useful to you and makes you feel good.

So hopefully having digested this you now have a better understanding of the system, and will be prepared, and may I suggest seated, when you open your Q3 instalment notice.

Have a great Easter


October Reflect


Another busy month of seemingly perpetual motion on this end!

There have been some interesting highlights. The school holidays included a trip to Brisbane to watch short thing compete in a sports aerobics competition. If your daughters are thinking of going down this path, beware. Imagine listening to a well known eighties disco tune, played faster than normal so it sounds like chipmunks, at warp volume and repeated about 50 times! Ear plugs & gin are a must at these events.

As revenge, the family have supported me at two diving competitions that I recently competed in. I have a few new dives (some quite scary) that I will add onto the now “almost viral” you-tube video on the website for all your amusement when I have a moment. I am still doing splendidly well due to the lack of competitors in my age group, however I am still not quite game enough to compete on 3 metre yet! Maybe next time!

On a more serious note, I was recently asked by the Institute of Chartered Accountants in Sydney to present a talk about how to setup an accounting practice, and specifically the difficulties & opportunities faced by UK accountants coming to Australia on skilled visas. This is a subject that I can rant on about for quite some time, especially with a glass of wine in hand, as for those who don’t know it took me eight years to jump through various ridiculous hoops to get to where I was when I left England. However, ranting aside, the talk went really well and even more exciting, the Institute of Chartered Accountants of England & Wales are featuring me in a two page article in their magazine this month. Fame at last!

On the tax sidewe have the newsletter available for the month on the website with lots of tips and tricks for you, so have a look at that when you have a moment – there is always something in it for everyone.

On the investment side the flexi 100 investment is open again for the next few weeks only. This opportunity comes out every 6 months and is often referred to as the no-brainer investment. It really is as good as it appears. I have put together a video explaining this in a bit more detail – it’s very short so please check it out.

So there we have it.

Please feel free to forward to family and friends, and call me if you want to discuss any of these further – 02 8090 4112 or 07 3103 0771.


August Reflect

Hi Everyone,

Just managing to squeeze the August newsletter in before the end of the month – but I have many excuses including my birthday!

The trees are budding, spring is near and I have 4 hand reared ring-tailed possums almost ready for release. Anyone want them released in their garden? Still, hand feeding possums whilst watching TV makes the endless election “news” almost bearable. However, not everyone has this privilege, so I have another way for you to amuse yourself. Your challenge this week is to spring clean your mortgage!

The lovely Barry (the friendly independent mortgage broker) has offered to give everyone a free spring mortgage make over. There are no excuses – and no catches – get on the phone and sort it out. Click here for his contact details

Did you know that mortgage rates are at a 53 year low? With this in mind, you might like to consider locking in a fixed rate for any amounts you can’t see yourself repaying in the next three or five years. Three year fixed rates are available for less than 5%. Alternatively, you could borrow and invest the funds in the market – the probability of your returns beating the interest payments are high. Need help with the investments? Give me a call.

Our newsletter has some interesting articles in it this month. Again on the mortgage theme, offset accounts and the way they are treated for tax purposes when investing, are explained. The ATO target audit areas are detailed, and there is an explanation of the new means tested private health insurance rebate. Read it here.

It is in your interest to let you health fund know if you are no longer eligible for the 30% rebate on the cost of your health insurance. If you don’t, you will get a nasty tax bill when you lodge your 2014 tax return and the ATO reclaim the rebate back. Read the newsletter then ring your health fund.

Finally, I have spent a long time this month on various courses and seminars getting my head around the aged care system in Australia, in order to help our clients and their parents navigate this somewhat confusing system. If your parents are still with us, watch this space over the next few months for tips and tricks as to how to get the best outcome for your folks. Of course, if you hear of anyone starting to think about their parents and the aged care system, please give them my number. It is really, really easy to make extraordinarily expensive mistakes which can be avoided with a bit of early planning. Questions that get asked in this emotional time & some ways we can help are detailed here.

On a similar vein, I will also be posting estate planning tips over the next few months, with the hope that as a family unit you work together to stop the tax man taking a slab of the family estate. There is no death tax as such, but structure it wrong and 30% will disappear on death. Let’s avoid that.

However, before we can do that we need to be able to talk about money as a family. So, to help (and this is the reason the newsletter is so late!) I have my first webinar. Yes! I hope you are as excited about this as I am – it took bloody ages! Yet I am sure it will get quicker (and more polished) with practice. So grab yourself a cup of tea and click here. Never realised I had such a pommy accent!

So there we have it.

Please feel free to forward to family and friends, and call me if you want to discuss any of these further: 02 8090 4112 or 07 3103 0771.


April Reflect: How Much is Enough?

Dear All,

We were lucky enough in March to benefit from one of the wide range of activities available at schools today. Short thing went away on school camp for a week!

Smelling freedom, we rushed off to Bankstown to take the “home-made plane” for a holiday, and over 4 days we covered nearly 4,000km. We visited Charleville (a ghost of a town, suffering badly from multiple floods), Birdsville (a pub that really is in the middle of nowhere), Broken Hill (surprisingly cosmopolitan – with a great restaurant on top of the slag heap) and finally Temora. Perhaps where Glenn would love to retire, as you can actually live right on the taxiway of the airport – can’t wait!

Anyway, whilst away and sampling the delights of mini bottles of wine at the Charleville RSL (where, yes they dress for dinner! – eaten whilst sitting on plastic garden furniture) we did what all couples should do at least once a quarter.

We checked how the retirement plan was going!

It may sound fundamentally dull, however if you are going to live a life of moderately luxurious retirement – shall we say $60k p.a. to live on, you will need c.$1.5m in today’s dollars in your retirement fund when you turn 65. The magic fairy doesn’t make this happen. You do!

So assuming that you are putting in the full concessional contribution of $25,000 each and every year, have good investment returns (I have used 4% above inflation), work to age 65 and have adequate income protection in place (to age 65) in case you can’t work, then here is a ball park figure of what you need in your fund now, based on your current age, in today’s dollars.

Your Age & What Your Balance Needs to Be:

40 – $165,000

45 – $340,000

50 – $550,000

55 – $800,000

60 – $1,100,000

65 – $1,500,000

So how are you going? On target, or falling short? If, like most Australians, you are falling short, you need to take action now – that’s today. So here is your homework…

There are three essential steps to the process;

Write down your assets and liabilities as they stand now. Then, together if you are in a couple, discuss how you are going to pay off those debts, grow your assets and fund your retirement. Please discuss whether you are going to sell the family home to retire on – this is a huge stumbling block for most couples.

Prepare a cash flow of exactly what the family money has been spent on over the past few months. Work out where you can save. Your aim is to free up cash flow to invest. You are not allowed to say that you could not possibly spend less – if that’s the case, how on earth are you going to live in retirement on a much lower income?

Finally, talk to me as to how to use the spare cash flow to salary sacrifice up to the maximum and then invest outside super to generate additional wealth.

Simple really, but it won’t happen if you don’t take control and get on with it! So do it today.

Please feel free to forward to family and friends, and call me if you want to discuss any of these further on 02 8090 4112 or 07 3103 0771


March Reflect

lb monthly

Good Evening All,

Ah, March at last thank goodness. Not because March is a particularly exciting month in the world of tax (that’s May), but because once again February was my alcohol free month for the year.

I’ve been doing this for years – well before it became trendy. Each year I think I must get myself organised for sponsorship, so you can all make tax deductible donations of course, but once again I didn’t get around to it. So you are all let off the hook for another 12 months. I managed to survive the whole 28 days, only once (on a particularly stressful day), having to resort to sniffing at a bottle of plonk that had been left half open in the fridge all month!

So, for the two clients who recently sent “thank you” cases of wine (a custom that I think needs to be encouraged – perhaps even enforced), I am looking forward to finally being able to open them – although perhaps not all at once!

However, before I sit down with a nice little merlot, here are five things I want you to do this month to help you get more control of your finances …..

1. Get your super statements out, add up the contributions made since 1 July 2011, add on those you expect to make up to June 30 2012, and make sure you will not exceed the contributions threshold of $25,000. If you are going to go over the cap reduce your contributions now to avoid the potential excess contributions tax. Note that is no longer a higher maximum for the over 50’s.

2. Open a superfund account for each of your kids (of any age) put a couple of hundred dollars in it for them & tick the high growth option. Any cheap superfund is fine, try Australian Super or Virgin Australian Super both suitable for small balances, or look at page 3 of this months newsletter on my website for further cheap super options. You will need to apply for a TFN for each child first, if they don’t already have one. You will need to go to an ATO ‘Shopfront” to do this, click here for locations taking various ID and a pint of the child’s blood. (No, not really the blood bit!)

3. Need more property in your portfolio? Remember NRAS? Have another look at this guide to NRAS we sent out last year. If you want to know more contact Emma Allen on 0409 153 875 to discuss how to invest in a new rental property, Australia wide, and have the government pay you c.$10k tax free rent each year. Emma doesn’t work for me, I just like what she does!

4. If we have not received your 2012 tax records please send them in ASAP in order that we can complete your returns before the looming dead line. The ATO will fine $550 for late returns – not to mention bringing my very important on time lodgement % down!

5. Make sure you have signed up for our blog where we will be putting free information to help you pay less tax and build more wealth on a regular basis.

Finally, the March newsletter will be on the website over the weekend under the newsletter tab. Anyone over the age of 55 needs to read page 8 if they don’t already have a transition to retirement pension in place. Anyone employing others please read page 6 for upcoming changes, and everyone running a business should read the first page for changes to capital allowances.

So there we have it, wish me luck (and less rain) for the gear-up girl bike ride challenge that short thing and I are doing on Sunday.

Please feel free to forward to family and friends, and call me if you want to discuss any of these further. 02 8090 4112 or 07 3103 0771 or 0413 952 180.