by Mark | Jul 22, 2016 | Insights, Insurance
Do you and your family have adequate insurance cover? Did you know there is a more tax-effective way to fund your insurance? How does it work? Personal insurance is a smart way to protect your quality of life and provide support for your loved ones if you get sick or injured. While you often hear how important it is to have sufficient cover, it’s just as important to be smart about the structure of your insurance – so that the dollars you pay for premiums work harder for you. Most types of life insurance can be held inside or outside of super. These include: Income Protection (IP). Pays a regular monthly benefit if you become severely disabled by sickness or injuries and you are unable to work – potentially helping your partner take time off work to care for you and/or cover mortgage repayments. Life cover. Pays a benefit if you die or become terminally ill – helping your family take care of debts and ongoing household expenses. Total & Permanent Disablement (TPD) cover. Pays a benefit if you are permanently disabled – helping cover the long-term costs of care for you and your family. There are advantages and disadvantages to holding insurance inside or outside of super. Advantages Insurance inside super IP, Life and TPD (any occupation) insurance premiums are generally tax deductible to your super fund. You can pay your premiums using accumulated super money or by making additional super contributions – which may come from your before-tax income....
by Mark | Jul 5, 2016 | Insights, Key Alert
The Reserve Bank of Australia left the cash interest rates on hold at 1.75 per cent on Tuesday, although governor Glenn Stevens hinted at cuts ahead if inflation remains low. With continuing signs of weakening local economic activity and growing concerns over the state of the international economy, the likelihood is increasing however of a cut in rates over coming months. Next month: Economists say the central bank’s focus remains weak inflation, leaving the second-quarter consumer price index, released at the end of July, central to its next move. A surprisingly low first-quarter inflation read-out forced a 25 basis point cut, to 1.75 per cent, in May. Most expect the June-quarter CPI to come in below the RBA’s 2 to 3 per cent target range....
by Mark | Jun 29, 2016 | Insights
Does your spouse earn less than $13,800 p.a.? Do you wish to increase your combined super savings? Would you like to reduce your income tax liability? How does it work? If your spouse is on a low income, you may be able to make contributions into their super account and claim a tax offset. This contribution is a non-concessional contribution and will form part of the tax-free component of your spouse’s super account. You may receive an 18% tax offset when you contribute to your spouse’s super fund (see below for conditions). The offset only applies to the first $3,000 of your contributions in a year, with a maximum offset of $540. The offset reduces as your spouse’s income rises above $10,800p.a. and cuts out when your spouse’s income is $13,800 p.a. or more. What does it mean for me? Spouse contributions can be an effective way to increase your spouse’s super. As this is a tax offset rather than a tax deduction, you may receive a direct saving against your income tax liability. Using spouse contributions and other available strategies means couples can enjoy more benefits when they save together. How do I know if I qualify? You may be entitled to a maximum tax offset of up to $540 each financial year if: You did not claim a tax deduction for the contributions Both you and your spouse were Australian residents when the contributions were made You and your spouse were not living separately and apart on a permanent basis when you made the contributions Your spouse is under 70, or if aged between 65 and...
by Mark | May 30, 2016 | Insights, Superannuation
How does it work? The Government co-contribution is an initiative to help eligible low to middle income earners boost their retirement savings. If your total income¹ is less than $35,454 p.a. and you make personal (i.e. after-tax) contributions to your super any time this financial year, the Government will match your contributions on a $0.50 per dollar basis up to $500. If your total income1 is less than $50,454 p.a. the Government’s matching rate will be reduced as per the table below. Assuming you qualify, the Government will automatically match and forward the co-contribution to your super fund once you’ve: made an after-tax contribution, and submitted a tax return for the financial year in which you’ve made your Note: This article has been prepared based on the law standing at the time of publication. Please speak to your Financial Planner before making any contributions to super for the purposes of securing a Government co-contribution. 1. Assessable income plus reportable fringe benefits and reportable employer super contributions. What does it mean for me? The Government co-contribution is an easy and cost-effective way to boost your retirement savings using some of your own money, and some of the Government’s money. The potential downside is that you won’t be able to access your retirement savings until you’re eligible to access your super, which for most people will be at retirement age How much will I receive? How much you receive depends on your income. For example: If your after-tax contribution for this financial year is $1,000 And your income is: Your Government co-contribution is: $35,454 or less * ...
by Mark | May 22, 2016 | Education Series, Insights, Investment, Property, SMSF
Are you the trustee of a self-managed super fund (SMSF)? Have you been thinking about setting up a SMSF? Do you want to invest in a property inside super? Do you have a long-term investment timeframe? Let’s look at the broad outline of how this can be achieved. How does it work? Changes to superannuation legislation allow self-managed super funds (SMSFs) to borrow to invest, providing certain conditions are met. If you have an SMSF, you may be able to use these arrangements to help buy a residential investment property through your fund. Say, for example, your SMSF wants to buy a residential investment property but doesn’t have enough funds for a full purchase. It does, however, have enough funds to make a partial payment. The SMSF can purchase the property under a Limited Recourse Borrowing Arrangement (LRBA) (i.e. in the event of default, the lender only has recourse to the property and cannot claim any other SMSF assets). In this scenario: The SMSF makes a partial payment on the property, and borrows funds to pay the balance plus other acquisition costs – using the property as security under a ‘limited recourse’ The property is held in a trust for the SMSF, which is entitled to the rental income The SMSF pays off the loan over the agreed period After the loan is repaid, legal ownership of the property can be transferred to the SMSF What does it mean for me? This strategy allows your SMSF to acquire property that’s worth more than what is available in the fund, by repaying multiple installments over the long...
by Mark | Aug 25, 2015 | Periodic Market & Investment Update
What is occurring and why? We are now currently seeing swings in the equity market better than the bowling of James Anderson in the recent Ashes cricket series. Like the Australian batsman, equity markets have been very volatile over the last couple of months. This is being driven by an ongoing contraction in China’s manufacturing sector, turbulence in Europe and now a falling Australian share market it’s no surprise investors are starting to ask…where to next? We are seeing a similar situation now that we did back in 2011, however then it was Greece defaults and the US reaching their debt ceiling. Then we saw a 22% fall in the local market. Now, it’s China in particular impacting on Australian markets, and also currency – the AUD/GBP has risen to around $2.15 / £0.47 for the first time in many years. The Chinese share market went berserk earlier this year, and is now back at the level it started 2015 at. As we know, generally speaking the Chinese do like to gamble (as do Australians … I’m a little over how many gambling ads we see on TV), and not being able to do so within the confines of China (and not everyone can hop across to Macau) has seen the levels of borrowing to invest in shares rise sharply. As margin calls hit when the market falls, this promotes more selling. Locally, the fall in the Australian market has been particularly stark; down nearly 1.5% on Friday 21 August; down over 4.0% yesterday (at close, 24 August); possible falls today however the market has recovered after an initial...
