When organising your estate it is important to nominate an executor in your Will. A “legal representative” of a deceased estate is the general term for either an executor or an administrator, and is the person responsible for looking after your estate on your passing. If your Will does not name an executor, the named executor is unable to act, or you die without a Will, the person whom the court appoints to administer the estate is called an administrator.

Duties of the legal representative include, but are not limited to, the following:

•   Organising your funeral or related service;
•   Collecting, maintaining and protecting assets pending final distribution of your estate;
•   Applying for probate or letters of administration;
•   Paying all debts, funeral and testamentary expenses;
•   Investing assets pending distribution of your estate;
•   Obtaining a tax file number and lodging any tax returns for your estate;
•   Distributing the assets as directed under your Will or the laws of intestacy.

Advance planning, good advice, and the proper assembly of important documents will all ensure that your estate is handled as easily as possible. The following issues should be considered when developing a thorough estate plan:

•   Appropriate care for any minor children.
•   Asset protection
•   Probate avoidance
•   Avoidance, minimisation and deferral of tax liabilities
•   Planning for illness or incapacity
•   Selection of guardians, personal representatives and other fiduciaries
•   Formation of family limited partnerships and other business entities
•   Succession strategies for family businesses.

A good estate plan should take into account both your personal and financial goals. For example, some families may need a trust to manage and distribute assets to minor children. Make sure that all of your assets of any value are considered when developing an estate plan, including real estate, business and farm interests, investments, retirement plans, life insurance proceeds, personal property, art or other collections, cash and personal effects.

Your estate plan will be formulated by taking into consideration the fair market value of your assets, how you own them legally, their growth potential, their liquidity, and what assets should be passed to specific individuals. A well planned estate will provide you with the comfort of knowing that your wishes will be carried out should anything happen to you in the future. This benefits not only you, but also your family members and other beneficiaries, who otherwise may face the burden of making choices for you without your input.

A major part of estate planning is preparing your Will, which is important at any stage in your life and is critical to ensure that when you die, your estate is handled the way you planned it. It is very important that your Will is valid and up to date. A Power of Attorney should also be considered. This is a binding legal document where you are able to appoint someone you trust to make decisions and managing your estates on your behalf. This is not only used when you are overseas or uncontactable, but is also important planning for if you become seriously sick or incapacitated. Other things to be taken into consideration are the preparation of enduring guardian, prenuptial agreements and testamentary trusts.

Here at The Quinn Group we are able to assist you in any Wills, estates or probate matters. Our experienced team of lawyers and accountants can help you plan your estate in order to give you peace of mind and reduce future stress for loved ones. For more information submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.

As an employer, you must register for PAYG withholding, whereas the ATO will notify you if your business must pay PAYG instalments. Before you can withhold any part payments for PAYG purposes you must register with the ATO. Registration must be done by the time you first withhold from a payment.

When hiring a new employee, it is important to be aware that you must receive their TFN declaration form within 28 days of the employee starting work. If employed by more than one person, the employee must have lodged separate TFN declarations with each. After the 28 days, if the declaration has still not been received, then you must take 46.5% out of the employee’s earnings for tax withholding. For every employee that acquires payments under the PAYG withholding system, a payment summary must be completed.

PAYG withholding

PAYG withholding is an obligation by law. Although, employees are given the option to have different deductions made, e.g. voluntary superannuation contributions and donations to charities. As an employer you must withhold an amount from the payments you make to the following:

•   your own employees
•   employees of another business that you pay
•   company directors for their services (if you operate your business as a company)
•   some ‘other’ types of workers such as contractors
•   a business you have paid that has not provided their ABN to you on an invoice or other document (if required)

Under the PAYG withholding system, if you make payments subject to withholding you must:

•   register for PAYG withholding
•   work out the status of your workers (if applicable)
•   become familiar with the types of payments you need to withhold from
•   work out the amount to withhold
•   report and pay withheld amounts to the ATO
•   provide payment summaries and lodge an annual report after the end of each income year.

In most circumstances you will need to withhold amounts from the following payments:

•   wages/salaries
•   where labour hire arrangements are made
•   where the payee has elected voluntary amounts to be deducted
•   if an ABN hasn’t been quoted

PAYG instalments

The PAYG instalment system is used for paying instalments during the income year, which go towards your expected income tax liability on your business and investment income. Your instalments for the year are credited against your income tax assessment at the end of the year to determine whether you owe more tax or are owed a refund.

The instalment amounts you will be required to pay each period are calculated by the ATO. These amounts are based on your latest income tax assessment. If you lodge a new tax return or amend your latest return, these amounts may be different to the amounts printed on your activity statement. How much you will actually have to pay will also depend on how often you pay instalments, this can be either quarterly or twice a year.

Reporting PAYG tax is done via your activity statement. When it comes to termination payments, you need only report them if the sum paid is in cash, and greater than $5000. It is important to report accurate information and figures to the ATO in order to avoid penalties and confusion.

The world of tax can be extremely complex and if obligations are not adhered to it can often become quite stressful, not to mention costly. The accountants, lawyers and tax agents at The Quinn Group are able to assist you with all tax and ATO related matters. For advice or more information submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.

Family Tax Benefit Part A

You may be eligible for Family Tax Benefit Part A if you meet certain residency requirements and if you care for a dependent child for at least 35 percent of the time (at least 128 nights a year), if you have:

• a dependent child aged under 16, or
• a dependent child aged 16-20 years who has completed a Year 12 or equivalent qualification, or who is undertaking full-time education or training leading to a Year 12 or equivalent qualification, or
• a dependent full time student aged 21 to 24 (who are not receiving Youth Allowance or similar payments like ABSTUDY or Veterans’ Children Education Supplement.)

If you are eligible for Part A you might also qualify for additional benefits such as, Large Family Supplement, Multiple Birth Allowance, Rent Assistance or a Health Care Card. These will be added on to your Family Tax Benefit Part A rate.  You may also be eligible to receive the Supplement which is paid for each eligible child at the end of each financial year after you and/or your partner have lodged an income tax return.

Your Family Tax Benefit Part A may also be affected by shared care and child support and can be paid in fortnightly instalments, or as a lump sum payment.

Family Tax Benefit Part B

Part B gives extra assistance to sole parent families and to families with one main income where one parent chooses to stay at home or balance some paid work with caring for their children. You can receive Family Tax Benefit Part B if you and/or your partner and your child meet the basic eligibility conditions relating to children, residency, two parent families and single parent families.

• You have a dependent child who is under 16 years, or 16-18 years and a full-time student who does not receive youth allowance or a similar payment.
• The parent earning the higher amount earns $150,000 or less for that financial year. If the primary earner’s income is under that limit, an income test is then applied to the parent earning the lower amount. The parent earning the lower amount can earn up to $4,672 for the financial year before it reduces the rate of Family Tax Benefit Part B payable.
• If you are a single parent, you can get the maximum rate of Family Tax Benefit Part B provided your income is $150,000 per year or less. (If you share the care of your child, there are special rules about how much Family Tax Benefit Part B you can be paid.)

Much the same as Part A, you may also be eligible for the Part B supplement which is paid per family at the end of each financial year after you and/or your partner have lodged an income tax return, if required to do so. Your Family Tax Benefit instalment payments may also be stopped if you and/or your partner have not lodged income tax returns or informed the Family Assistance Office that you are not required to do so within the required timeframe.

Here at The Quinn Group, our experienced team of tax agents and accountants are able to assist you and your family with understanding and applying for the Family Tax Benefit and other general tax queries. To find out more information submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.

All NSW employers must have a workers compensation policy if they pay more than $7500 in wages per annum, employ an apprentice or trainee, or are part of a group for premium purposes.

The New South Wales workers compensation system comprises four elements:

1. New South Wales WorkCover Scheme – provides workers compensation insurance through contracted Scheme Agents to employers operating in New South Wales. 
2. SICorp (through the Treasury Managed Fund) – manages workers compensation, administration and financial liability for most public sector employers except those who are self-insurers. 
3. Self-insurers – organisations with enough capital to underwrite, pay and manage their own claims. There are strict criteria that employers must meet prior to WorkCover granting a self-insurers licence.
4. Specialised insurers – hold restricted licences to underwrite workers compensation insurance risk for a specific industry or class of business or employers.

At the beginning and end of each workers compensation insurance policy period an employer must supply their Scheme Agent with a declaration of their wages. The workers compensation premium will be based on the amount of wages. Employers declare their wages on the Wages declaration form supplied by their Scheme Agent.  

Where a payment to a worker is made in lieu of wages (regardless of the terminology used to describe that payment), the payment is counted as wages for the purposes of premium calculations.  Total gross earnings (before tax deductions) and some payments that are not generally thought of as wages are included.  Employers are required to calculate their wages for workers compensation premiums in much the same way they do for payroll tax. To see a general list of what is considered wages in these circumstances and what constitutes a group please read our article on payroll tax. It is important to be aware that apprentice wages are required to be declared separately to those of other workers. 

Even though workers compensation policies are in place if something unfortunate happens to an employer or employee, nothing beats the old saying of ‘it’s better to be safe than sorry.’ In accordance with Occupational Health and Safety laws employers must legally and ethically provide:

• Safe premises
• Safe machinery and substances
• Safe systems of work
• Information, instruction, training and supervision for workers
• Suitable working environment and facilities

Here at The Quinn Group we can help you with any of your business’ Workers Compensation issues. Whether it is the calculation of wages, implementing workers compensation policies or legal matters our experienced team of lawyers and accountants can assist. Submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.

• Identifying and making an inventory of the deceased person’s property.

• Accounting and appraisal of the property.

• Payment of taxes and creditors.

There is no statutory requirement to obtain a grant of probate. If it is required, probate should be obtained in order to ensure that you have the authority to deal with companies where you will need to release assets. Many organisations require that probate has been granted before they will release assets, particularly financial institutions and superannuation funds. Nevertheless, modest amounts (usually less than $50,000) may be released without the need for probate to be obtained. Probate is also beneficial as it can remove liability for handing assets to the wrong person.

A probate grants title of the deceased’s property to the executor or administrator and thereby provides him or her with authority to deal with the assets and liabilities of the estate.

Usually the process will involve the deceased person leaving behind a valid Will which nominates an executor who is capable and in the right position to carry out the required duties. However, this is not always the case. For example, if there is no Will or the executor is unable to act, then other Supreme Court applications can be commenced. These are often similar to the probate process, although they are generally more complex.

When applying for probate it is a good idea to know where, or be in possession of, the following documents:

• Original Death Certificate

• Birth Certificate

• Marriage Certificate

• Original Will

• Bank Account and Credit Card Details

• Details of the deceased’s assets

• Details of the deceased’s liabilities

• Centrelink ID numbers

• ATO tax file number

• Council Rates notice for the properties owned

Here at The Quinn Group we can assist you with Grants of Probate or any other Wills & Estates matter. Our experienced team of lawyers can help you apply for probate and much more. For more information please submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.

The ATO used to allow the company 14 days to remit the penalty before they commenced recovery proceedings. This has now increased to a 21 day period which is not negotiable and starts from the date the notice was posted, rather than the date it was received by the recipient.  The court also has no power to grant relief to a director from their obligations in respect to a Director Penalty Notice.

Under the old regime a Director Penalty Notice allowed the recipient to comply with the notice in four different ways. These were by either paying the tax debt in full, entering into an installment arrangement or by appointing a voluntary administrator or a liquidator before the recovery processes were commenced. In accordance with the new regime, the option to enter into an installment repayment arrangement to comply with a Director Penalty Notice and avoid personal liability has been removed. Now, if a director issued with a notice enters into an installment agreement he or she will simply delay the tax office from commencing the recovery proceedings. The director’s personal obligation to the tax debt will not be enforced during the 21 day period while the payments are being made.

It has become much more difficult for a director to rely on the defence of “illness or other good reason” this is because under the new regime there are extra criteria to be met. The director must establish that he or she was ill, or that there was a good reason why he or she did not participate in the management of the company while the relevant tax liability fell due. On top of this, the regime requires the director to also establish that it would have been unreasonable to expect the director to have taken part in the management of the company at that time.

To avoid personal liability, the recipient of the Director Penalty Notice must do one of the following within 21 days of the notice being issued.

- Comply with the obligation to pay the relevant tax liability in full.

- Appoint a voluntary administrator.

- Appoint a liquidator and begin to wind up the company.

The Director Penalty Notice clearly states the dollar amount of the tax debt owed by the director’s company. If you are a director it is important to be aware that if you receive a Director Penalty Notice and do not undertake one of the three options within the 21 days allocated, you can become personally liable for the tax debt of the company. What this essentially means is that the ATO can then commence action against you rather than the company to collect the outstanding debt.

If your business has a tax debt or you have received a Director Penalty Notice it is vital that you seek professional advice and quickly! There can be significant ramifications for not complying with the ATO’s notice, this can include losing personal assets such as cars, property or shares. Here at The Quinn Group our team of tax lawyers and accountants are experienced in dealing with the ATO and tax debt issues. For more information on the changes to Director Penalty Notices or about other tax debts submit an online enquiry. Alternatively, call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166.

People’s lives are constantly changing, as such there are many reasons why you may decide to lease out your main place of residence. In order to do this without incurring CGT it is important to be aware of the ATO’s guidelines with regards to CGT exemptions.

The following simple rules apply:

- Only your main place of dwelling will be exempt from CGT. Thus you can’t own two properties, live in one for a couple of years and then alternate between that property and your main residence while avoiding CGT on both houses.

- Usually, if you purchased a house after 7.30pm on 20 August 1996 you have to have lived in it when it was first bought (i.e. not rented it out) to be entitled to a full exemption. This is because if you rent the house out straight away the ATO deems you to have acquired the property purely to produce income.

- Provided the above terms are met, you may be exempt from CGT if you rent out your home for less than six years.

- If you’ve held a property for more than twelve months and the ATO has deemed you subject to CGT, you will usually be entitled to a 50% discount.

Capital gains tax is dependant on individual circumstances and as such things can become quite complex. Especially when how many properties you own and how frequently you move, get drawn into the picture.

FULL EXEMPTIONS
If your house is nominated as your sole dwelling, you can usually rent it out for six years while living elsewhere. Once that period of time has elapsed you must return to live in that house for an acceptable amount of time in order to be allowed another rental period of six years. This process can generally be repeated for any amount of time and the property will remain exempt from CGT. The same can also be said if you rent the property out for six years, then leave it vacant from there on in. A tax payer can often still apply the six year exemption rule if they acquire and reside in another property. However there is no ‘Main Residence’ exemption applied to the second property which subsequently becomes subject to Capital Gains Tax.

PARTIAL EXEMPTIONS
In situations where multiple investment properties are acquired over a period of time, the ATO sees the six years as cumulative. This denotes that you only get six rental years in total before you are liable to pay CGT. Fortunately the CGT will be exacted proportionately. As a general example, this means if you reside in your main residence for twelve years before you rent it out for eight years, and made a $200,000 capital gain on the property after that, you will only have to pay CGT for the two year period that exceeds the six-year exemption. Thus the CGT would be exacted on $20,000 (being two years excess over a six year period divided by a total of twenty years owned).

PARTIAL MAIN RESIDENCE EXEMPTION AFTER 1996
If you originally bought your house with the intent to rent it out after August 20, 1996, but later changed your mind and choose to live there, you will become partially exempt from CGT on a proportionate basis of years lived in to years rented.

When there is a change of status from income producing to main residence or vice versa, you should obtain a valuation as of that date. A Real Estate Agent’s valuation should suffice, but a valuation from a licensed valuer is recommended.

Anyone subject to CGT should be aware of the following rules:

- Although there are provisions for farmers, properties over 2 hectares are not exempt from CGT.

- The residences of private companies and trusts do not qualify for an exemption.

- If you use part of your house in order to generate income, for example a home business, then CGT will be exacted on that section if you claim tax deductions such as interest rates, insurance or rent.

- If you have purchased a new property but are still in the process of selling the old one, you need to complete the sale within six months in order to avoid CGT.

- When it comes to deceased estates, presuming the house was the sole residence of the deceased, a full exemption exists providing the property is sold within two years of the deceased’s passing.

Capital Gains Tax liabilities, concessions and exemptions change depending on your individual circumstances, for this reason it is important to seek advice from a professional. Here at The Quinn Group our experienced team of accountants can assist you in regards to Capital Gains Tax. For more information submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.

Unlike with individual income tax returns the Tax Office does not issue Company Income Tax Notice of Assessments. Whilst most companies do make Income Tax payment installments throughout the year there is usually a shortfall at the end of the period that needs to be settled. You will not receive a Notice of Assessment from the Tax Office for your Company Income Tax, so please do not think that you can wait until you receive this notice before lodging your payment.

The different business structures and entities have different reporting and lodgement requirements. 

Sole Traders:

As a sole trader you are required to lodge your income (or loss) from the business within your individual income tax return.

Partnership:

A business operating as a partnership must lodge a partnership tax return - made up of income minus deductions and expenses. However, when it comes to the income (or loss) that you made as an individual from the partnership, this is to be reported in your individual income tax return.

Trusts:

A trust structure has its own trust tax return that is to be lodged - it is made up of income minus any deductions and expenses. If you are a beneficiary of a trust, you need to include any income that you receive from the trust in your individual income tax return.

Company:

A company will need to lodge a company tax return - made up of income and its tax liability. This is worked out in the following way:

[assessable income - allowable deductions = taxable income]

x 30%(company tax rate)

= tax liability

Shareholders:

Shareholders of these companies are also taxed on the profits distributed to them by the company (known as dividends). In order to avoid double taxation, there is an imputation system in place which provides shareholders with credits for tax already paid by the company.

The imputation system works by providing shareholders of a company with a tax offset called a “franking credit” for tax paid by the company. This franking credit then acts to offset the tax payable by the shareholder on their individual tax return. However, it is important to note that in order for the imputation system to apply, both the company and the shareholder must be residents of Australia.

Distributions made to shareholders form part of their assessable income- this includes dividends paid out of the company’s profits and also non-share dividends.

The world of tax can be extremely complex and if obligations are not adhered to it can often become quite stressful, not to mention costly. The accountants, lawyers and tax agents at The Quinn Group are able to assist you with all tax and ATO related matters. For advice or more information contact us now by submitting an online enquiry form or call 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.

By implementing some of the following fourteen ideas you can reduce stress and stay on top of the many things that will need to be organised. These handy bits of advice are tried and true and will allow your property settlement to be smooth sailing.

When purchasing:

1) Ensure you have already received formal finance approval before exchange of contracts or during your 5 day cool off period for the purchase of your new home (always have your finance arranged before you put in an offer on a house.)

2) Review your contract before exchange (preferably with your lawyer or conveyancer) to ensure that you understand what is happening in order to reduce stressing.

3) Arrange pest and building reports.

4) Organise to pay out your existing mortgage if you have one and sign your new mortgage papers with the bank.

5) Be sure to listen to your lawyer or conveyancer’s advice. It is important to receive professional advice in these situations as your property and capital is on the line! Do not hesitate to ask them any questions.

6) Don’t forget to allow for your legal fees, stamp duty and any other bank fees such as mortgage insurance.

7) If you are a first home buyer it is likely that you will be eligible for the First Home Buyers Grant. Be sure to arrange this as this will definitely reduce a lot of fiscal stress.

8.) Simple things such as bank or administration errors can hold up a settlement. Be prepared in the event that settlement is delayed for some reason. It is a good idea to have a back up place to stay for the night if you have arranged to move on that day.

9) Remember that you don’t get the keys from the agent until settlement is actually finalised. Don’t simply assume that you can get early occupation into your new house. Try your best to make sure your sale and subsequent purchase are in the same time frame. This will avoid wasted money on rent for a few months.

When selling:

10) Make sure you have arranged to have your utilities (gas, electricity, telephone and pay TV) to be disconnected at your old home and connected at your new. Ensure the buyer has done the same so these services will be transferred on the settlement date.

11) Book your removalist and have your possessions packed and ready to go.

12) It is imperative to schedule a walkthrough before settlement. This allows both parties to confirm that the property is in the condition as when it was first viewed and that nothing has changed.

13) Make sure you have removed all your personal belongings and the “For Sale” sign. It is courteous to clean the house and have it neat and tidy. Being professional and considerate will go a long way in smoothing out any rough patches that come up along the way.

14) Leave behind any appliance manuals and warranties as well as any alarm combinations. If you have a sales scrapbook such as photos or details of the house it may come in handy for the future owners. The new owners will be grateful if you leave any left over paint and paint chip samples.

Prior to settlement don’t hesitate to voice any queries you might have. Property settlement is a very exciting time so try to implement as many of these strategies as you can in order to avoid stress and confusion and make your settlement run smoothly. Make sure to keep your settlement documents in a safe place, you will need these in the future and settlement may also have taxation implications. Don’t forget to cancel your building and contents insurance.

Here at The Quinn Group we can help you with any of your conveyancing issues, as well as reviewing contracts and providing legal advice. If you are thinking of selling your property it is vital that you seek professional advice, not only will it make the whole process easier and less stressful, the advice will also give you a much clearer knowledge of what is going on. For more information submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166.

Some examples of reports SBR is targeting include the Business Activity Statements (ATO), financial statements (ASIC), and payroll tax returns (State and Territory Government revenue offices). This will affect financial reports lodged with ASIC for the financial year ending 30 June 2010 and following financial years.

SBR is simplifying business-to-government reporting by:

- removing unnecessary or duplicated information from government forms

- using business software to automatically pre-fill forms

- adopting a common reporting language, based on international standards and best practice

- making financial reporting a by-product of natural business processes

- providing an electronic interface to agencies directly from accounting software, which will also provide validation and confirm receipt of reports

- providing a single secure online sign-on for users to all agencies involved.

This program benefits businesses as SBR enabled software will allow owners to pre-fill, complete and submit government forms straight from their in-house accounting systems. This will save more time than existing processes as the person managing the accounts does not have to re-enter and orgainse information simply to suit a specific reporting requirement.

Some other changes include, but are not limited to:

- improving disclosure of non-financial information in the directors’ report of companies limited by guarantee

- new provisions for changing year-end dates

- replacing the profits test for paying dividends with a new test based on net assets

- clarifying the circumstances in which a company can cancel its share capital.

SBR is expected to save Australian business an estimated $800 million per year once fully implemented although it will not be compulsory for businesses to adopt SBR. This project is a positive move towards a more streamline national economy and has been co-designed by Australian, State and Territory government agencies as well as the wider business community.

If you are a business owner it is recommended that you seek professional advice from an accountant or lawyer to assess how these changes may impact your business. Here at The Quinn Group our experienced team of accountants and lawyers can assist you in understanding and making adjustments to your business based on these new changes to financial reporting obligations. Submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to make an appointment.