What would happen if….
Life does not always go to plan. While we logically know that, most of us don’t plan for the worst - it’s all a bit morbid and time
consuming.
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The downside of not planning is the potential for hard earned assets to be squandered, family fall-outs, and money handed to the
Government that could have been distributed in accord with your wishes. If you are a business owner, then the stakes are even higher.
As a population, planning is more important than ever because:
- The ageing demographic – 1 in 7 of us are now aged 65 and over (3.8 million)
- The baby boomer generation represent only 25% of the population but hold 55% of the wealth
- We are entering a period of intergenerational wealth transfer from the baby boomer generation
- Over the last 25 years there has been an explosion of wealth in Australia
Estate planning is simply identifying your assets and liabilities and what you want to happen to those assets if something happens to
you. As part of that, you need to look at the issues that might arise and how best to manage them. All of this is then reviewed for tax
outcomes and the legal requirements to provide the best care and protection for your beneficiaries.
If you are a business owner, there are also another set of issues to consider to ensure that the business can continue if you are not
able to continue in your current role. Or, your beneficiaries can take their share of the value accumulated in the business. This
planning will protect your beneficiaries, the business, and your business partners.
Estate planning does not have to be hard work, but it does have to be planned.
It’s also important to understand that actual wealth or the size of your estate is not the sole reason for estate planning. Estate
planning is important for:
- The care and maintenance of minor children.
- Managing the respective rights and expectations of beneficiaries, particularly with blended families.
- Avoiding disputes between family members.
- Relationships outside of the immediate family.
- Managing liabilities of the estate.
- Assets which may not be capable of immediate realisation or where value will be diluted by realisation.
- The transfer of assets through generations.
Estate planning seeks to not only distribute the assets of your estate but do so in a way that protects the estate, addresses issues
within the estate, and fulfils your wishes.
What changed on 1 Jan 2019
- Tampon tax (GST on sanitary products) scrapped
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Voluntary crackdown begins on credit card providers to protect consumers who cannot pay-off their credit card debt or who
cannot afford an increased limit
- Higher Education Loan Program:
- New lifetime caps prevent students repeating courses or continually enrolling in new courses.
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New loan limits: Increase in fee assistance for students studying medicine, dentistry and veterinary science courses with
increases in their loan limit from an estimated $130,552 in 2019 to a new limit of $150,000. $104,440 for all other
students.
You’ve been scammed, hacked or breached!
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Another year, another scam. While data driven crime is more sophisticated and difficult to address than ever, human error and judgement
remains one of the major problems.
The latest data breach report from the Office of the Australian Information Commissioner (OAIC) is surprising for the simplicity of
the problems - 37% of data beaches resulted from human error not malicious attack. In over 20% of reported cases, personal information
was simply sent to the wrong recipient. Another 6% of complaints were attributed to system faults.
Since 22 February 2018, businesses covered by the Privacy Act need to report unauthorised access to or disclosure of personal
information or loss of personal information that your business holds under the Data Breach Scheme. The rules impact organisations with
an annual turnover of $3 million or more, businesses ‘related to’ another business covered by the Privacy Act, or if your
business, regardless of size, deals with health records (including gyms, child care centres, natural health providers, etc.), is a credit
provider, or holds Tax File Number information (see the
list).
Organisations are required to take all reasonable steps to prevent a breach occurring, put in place the systems and procedures to
identify and assess a breach, and issue a notification if a breach is likely to cause ‘serious harm’.
What the statistics from the OAIC demonstrate is that procedural integrity in your business is paramount – train your team to not only
be wary of scams but ingrain best practice for the day to day management of personal data. Privacy protection is not just an ‘IT’ issue.
Simple measures you can take:
Have strong and enforced processes in place for the management of personal client information.
- Strong authorising procedures for payments – two-step authority.
- Change passwords often and use two-step authentication where available.
- If a client’s bank details have changed, phone them and check the details.
- Train your team on cyber security:
- Check requests for payments that arrive electronically from other team members and management.
- Check email addresses are legitimate – look for slight variations.
- Be suspicious of poorly written emails.
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Don’t click on links from email – always use your account with the supplier or Government department to check details.
- If contacted by the ATO, contact us to verify the information if you are concerned.
Quote of the month
“Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.”
Groucho Marx
Key dates to remember:
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21 February
- Lodge and pay January 2019 monthly business activity statement.
28 February
- Lodge tax returns for new registrant (taxable and non-taxable) large/medium entities (except individuals).
Payment (if required) for companies and super funds is also due on this date. Payment for trusts in this category is due as per their
notice of assessment.
-
Lodge and pay Self-managed superannuation fund annual return (NAT 71226) for new registrant
(taxable and non-taxable) SMSF, unless they have been advised of a 31 October 2018 due date at finalisation of a review
of the SMSF at registration.
- Lodge and pay quarter 2, 2018–19 activity statement for all lodgment methods.
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Pay quarter 2, 2018–19 instalment notice (form R, S or T). Lodge the notice only if you vary the instalment
amount.
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Lodge and pay quarter 2, 2018–19 Superannuation guarantee charge statement - quarterly if the
employer did not pay enough contributions on time.
21 March
- Lodge and pay February 2019 monthly business activity statement.
31 March
-
Lodge tax return for companies and super funds with total income of more than $2 million in the latest year lodged
(excluding large/medium taxpayers), unless the return was due earlier.
Payment for companies and super funds in this category is also due by this date.
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Lodge tax return for individuals and trusts whose latest return resulted in a tax liability of $20,000 or more, excluding
large/medium trusts.
Payment for individuals and trusts in this category is due as advised on their notice of assessment.
Staff News:
A warm welcome to Shirley, our new Senior Accountant, who recently joined FKW. Shirley is a qualified accountant with extensive
knowledge in client accounting software and has a strong passion in tax for small business and individuals.
Also a big welcome back to our Accountant Umme who recently got married in Pakistan. We are excited to have you back with the team!
If you have any questions about any of the articles in our latest newsletter please contact the office 02 4628 9555 or fkw@fkw.com.au.
Regards,
The FKW Team
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