Save
Almost 50% tax bills spotted as investors falter on savings strategies
A former Tax Office boss has found a number of investors managing their own superannuation have been hit with a 47 per cent tax bill as their savings strategies backfire.
Almost 50% tax bills spotted as investors falter on savings strategies
A former Tax Office boss has found a number of investors managing their own superannuation have been hit with a 47 per cent tax bill as their savings strategies backfire.
Self-managed superannuation funds are required to transact on an arm’s length basis, meaning purchase and sale price of fund assets should always reflect the true market value, and it should be traded or structured on commercial terms.
This prevents investors from taking a ‘mates rates’ approach to structuring their SMSF, and giving themselves an unfair advantage over other taxpayers.
In about 2014, the ATO started to crack down on SMSFs not sticking to the non-arm’s length income (NALI) rules. That’s now starting to bear fruit for the ATO, according to Stuart Forsyth, former senior superannuation official at the Tax Office.
Mr Forsyth said he has seen numerous situations recently where the SMSF trustee has been issued a statement by the commissioner, in the form of a position paper, which indicates there’s been a case of NALI.
A fund can land tax bills in the vicinity of 47 per cent if NALI is proven.
“There are some serious issues there so if someone plans to advantage their fund in any way or they’re going to deal on a non-arm’s length basis with their fund, then they really need to get advice before they do that so that they've got a defensible position if the commissioner comes along some years later,” Mr Forsyth said.
To read more about how the non-arm's length provisions apply to SMSFs, click here.
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. ...Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. ...Read more
Tax saving
10 ways to reduce your tax bill
With the tax return deadline only one month away, these tips could help minimise your tax bill. ...Read more
Tax saving
Sustainable tax conditions only way forward: OECD
The Australian economy had been on a 28-year winning streak of uninterrupted growth before the pandemic. However, despite a return to lockdowns, the OECD has predicted that winning ways can return sh...Read more
Tax saving
ATO issues warning over new gift card scam
The Australian Taxation Office (ATO) is warning victims of a new phone scam, where scammers are pretending to be the tax man and demanding payments for unpaid tax liabilities. ...Read more
Tax saving
EV uptake set to stall following tax changes
Special EV taxes introduced by state governments are creating a disincentive for Aussies to choose cleaner vehicles and slowing Australia’s overall transition to net zero, new data has revealed. ...Read more
Tax saving
Rooftop solar avoids ‘sun tax’ but still faces caps
Power companies will soon be able to charge Australians with rooftop solar panels a tax for exporting electricity to the grid, albeit the regulators have walked back from the most controversial parts ...Read more
Tax saving
South Australians now eligible for COVID-19 Disaster Payment
South Australians under lockdown are set to be supported by the COVID-19 Disaster Payment, the state government has confirmed. ...Read more
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
How the post-lockdown period will influence property, what the soaring NFT market means, and defining financial wellness
Listen now
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. ...Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. ...Read more
Tax saving
10 ways to reduce your tax bill
With the tax return deadline only one month away, these tips could help minimise your tax bill. ...Read more
Tax saving
Sustainable tax conditions only way forward: OECD
The Australian economy had been on a 28-year winning streak of uninterrupted growth before the pandemic. However, despite a return to lockdowns, the OECD has predicted that winning ways can return sh...Read more
Tax saving
ATO issues warning over new gift card scam
The Australian Taxation Office (ATO) is warning victims of a new phone scam, where scammers are pretending to be the tax man and demanding payments for unpaid tax liabilities. ...Read more
Tax saving
EV uptake set to stall following tax changes
Special EV taxes introduced by state governments are creating a disincentive for Aussies to choose cleaner vehicles and slowing Australia’s overall transition to net zero, new data has revealed. ...Read more
Tax saving
Rooftop solar avoids ‘sun tax’ but still faces caps
Power companies will soon be able to charge Australians with rooftop solar panels a tax for exporting electricity to the grid, albeit the regulators have walked back from the most controversial parts ...Read more
Tax saving
South Australians now eligible for COVID-19 Disaster Payment
South Australians under lockdown are set to be supported by the COVID-19 Disaster Payment, the state government has confirmed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
