Just thought I would update you all on some news that we have had here at Tribe in the last few months.
We would like to congratulate Hannah Bates on the arrival of her baby boy, Henry.
A big congratulations to Tom Heaney on his engagement. We wish you both a wonderful journey in your new life together.
We would also like to wish Mark Gale and Jesse Rodgers a lifetime of love and happiness on their journey through married life!
The ATO has recently released data that more than 65,000 people have breached the superannuation contributions cap, that is, the money that you put into superannuation, and the total excess superannuation contributions tax paid to date to the ATO is approximately $400 million! Excess contributions tax can be as punitive as paying a tax rate of 93 per cent on those contributions made above the cap!
Common mistakes:
Be aware that from 1 July 2012, the concessional contributions cap for those aged 50 and over will only be $25,000 not $50,000. It is proposed that for those with superannuation balances of less than $500,000 the cap will remain at $50,000, however at this time it has not been finalized.
If you are over the age of 50, there is an opportunity now before 30thJune 2012 to take advantage of the available $50,000 cap thereby increasing your superannuation balance.
To find out how you can avoid exceeding those caps and taking advantage of the cap available to you, please contact us.
A smarter way to insure and save money!
Did you know that if you take out personal insurance through your Self Managed Superannuation Fund (SMSF), you could receive tax-concession, and/or have your premiums deducted from your existing account balance?
To find out more, click on the link!
SMSF and Term Life Newsletter
Recently a family member announced in a panic “100’s of jobs are to be cut from the public sector and I think I am going to be one of them! What can I do?”
The options available when facing a redundancy can be quite complex & overwhelming. Decisions need to be made to work out the financial issues of retirement. Some of the factors to consider include:
• How much will my redundancy payment be?
• After I pay the tax, will it be enough to fund by existing lifestyle, and for how long?
• Do I have enough in super?
• Do I have any other assets or savings?
• Will I need to go back to work?
• What is my eligibility for pension or part-pension?
There are a number of retrenchment options available depending on your personal circumstances and your age at the time of receiving the redundancy regarding your superannuation entitlement. You may be able to preserve your super benefit, take a lump-sum or pension or both a lump-sum & pension.
Discussing all the above with my family member, it came clear to me that it was vitally important that for them to make an informed decision with no regrets a formal review of their financial position had to be made. This involved re-assessing their goals & objectives, clearly identifying their immediate obligations & an assessment of their long term financial needs. In doing this it became easier to decide on what option to accept. The individual felt empowered that whilst the timing of the redundancy was not ideal they were ultimately in control of the final decision.
Should you be faced with a similar situation and need assistance to make the decision that is right for you, please feel free to contact our financial services team at Tribe.
Fringe Benefits can be a help and a hindrace to small business/ Your employees love them but as an employer it costs you time and money to administer them. Are they really worth it?
The FBT year ends 21 March 2012 so now is the time to eliminate those Fringe Benefits which are not providing your business with any benefit.
You may find that some of your Fringe Benefits attract FBT and others don’t. The key is to tailor your Fringe Benefits to emliminate or reduce those you pay FBT to.
Even if you can provide exempt Fringe Benefits you need to lodge an FBT return with the ATO, but don’t worry this is where we can help!
If you want to reduce your FBT and record keeping, please call Tom Heaney or Sandy Davis on 02 6274 0400.
Could your business continue to operate if you were not able to be at the wheel?
During the financial planning process we spend a lot of time with our clients talking about the ideal outcomes they want in life and when they would like these to happen.
An important element to this discussion also includes discussion of any obstacles which may stop or prevent you from achieving the life and the plans that you have.
For those of us in business there are a number of day to day challenges and from my perspective cash flow is the crucial element to this. Have you considered what would be the outcome if you were unable to work due to accident or illness?
Business Expenses Insurances means that all the fixed expenses of your business will be paid even if you cannot work (due to accident or sickness while under medical treatment). This benefit is specifically designed for self-employed individuals who are employed full time and the premiums generally are a tax deduction for your business.
Like all insurances there are a number of options and benefits which can be covered so let’s go through some the terminology.
What Business Expenses Are Covered?
Rent, property rates & taxes
Leasing costs of plant and equipment.
Bank charges, interest on business loans
Salaries and other related costs for non – incoming generating employees of your business.
Business related insurance premiums but not including cost of this insurance
Electricity, gas, heating, water, telephone and cleaning costs
Regular Advertising costs, postage, printing & stationary
Accounting & Audit fees
Membership fees, publications and subscriptions to professional bodies
If you go onto claim the monthly premiums are waived for the period of time you are off work so that the business has one less overhead.
If you already have Business Expense insurance and would like this reviewed or if you consider this to be a threat or weakness within your business plan you should contact our office today to discuss how we can manage this form of business risk.
Sound too good to be true?
A client of ours, let’s say her name is Julie. She is aged 58 and received a salary of $50,000pa (after tax income $41,900). Her super account balance is $360,000 and she plans, at this stage, to retire when she is 65.
Julie’s daughter has recently given birth to her first child and she is looking to reduce her work hours so she can assist in caring for her grandchild. Julie has now commenced a pre-retirement income stream. This enables her to receive the equivalent of her take-home pay when she worked full-time, despite working less hours.
By using a pre-retirement income strategy that supplements her salary of $21,000 with a pre-retirement income stream of $21,950, she has maintained the same disposable income.
Further advantages with this type of strategy – you can continue working full time, salary sacrifice to super and receive a pre-retirement pension. You can save some tax AND increase your superannuation balance at the same time!
If you’re not quite yet ready to fully retire, but might be looking to reduce your working hours in the lead up to retirement, a pre-retirement pension might be the option you need. It allows you to convert your super into an income stream (allocated pension) but doesn’t allow you to take lump sum withdrawals until you’re fully retired. As you’ll still be working you can continue to make contributions to super through Superannuation Guarantee and salary sacrifice) to maintain your super balance for when you permanently retire.
If you would like to know more please contact a member of our Financial Services Team on 02 6274 0400
We’d like to share with you ‘The D Litter’ a litter of guide dog puppies that we sponsor.
Considering discounting to get the sale?
In times when customers aren’t spending money with you refrain from cutting prices. Price cutting has long term effects, when good times return customers are now used to paying lower prices.
Solution: Support your current price level by value adding with low cost product or service add ons.
How does a business loan rate under 6% sound? Business loan rates available at present are looking very good. In some cases they are dropping below home loan rates.
Just recently a client of ours paid out a fixed rate business loan. The new fixed rate they locked into provided a larger saving than sitting out the old rate. How can you ignore a 2% rate reduction?
If you would like to know more about your options please call us on 02 6274 0400 or contact your business banker.