Newsletter – March 2011

This month in Morris Accounting news…

• March happenings
• Upcoming events
• Why super is important – how it can help you create wealth and protect your assets
• Tax planning season – what are your big goals in business and wealth creation?
• From the Tax Office – a guide to managing a deceased estate

March happenings

Welcome to our new look newsletter! We have recently decided to move to a new e-newsletter provider. We would love your feedback so pleaselet us know what you think.

Earlier this month I attended a fantastic seminar on how to use social media for business. It really opened my eyes to what we can do and how we can do it better. As a result, Morris Accounting is now on facebook – we would love for you to Like us . We will be using this page to provide tax tips, information on self managed super funds, to promote our events and a lot more.

As I have mentioned in previous newsletters we are also on twitter and you can follow us at@MorrisAcc.

We are also going to be rolling out a client satisfaction survey in the next week or two – we would love your feedback, and if you complete it, you will be in with a chance to win a Myer gift voucher for $100.

This year is moving very quickly after the bumpy start. Talking with business owners recently, things have definitely been tough but it looks like they are turning for the better. Is that what you are finding? I look forward to discussing how things are going with you. Only 13 weeks until 30 June so please get in touch to discuss your pre-30 June tax planning.

You will also notice we are ramping up our seminars this year so please come along to these. They are free to attend (unless otherwise stated) and are a great place to learn more about how we can help you, we look forward to seeing you there!

‘Til next time
Nathan Morris, Director

Upcoming events

Throughout the year Morris Accounting will be running a series of events for our business and personal clients. Unless otherwise indicated, email info@morrisaccounting.com.au to register or for information. The venue for all events is the Lord Stanley Hotel, 1000 Stanley Street East, East Brisbane.

Why super is important – how it can help you create wealth and protect your assets

Self-managed super funds (SMSF) can provide significant opportunities to create wealth. Traditionally SMSFs invest in managed funds (and listed shares), but there is no need to limit yourself to this. They can use most forms of investment and wealth creation including shares, property, cash (such as term deposits), public and other trusts as well as a number of other options.

There are new laws around SMSFs that now allow forms of borrowing, as long as rules are met. This means that you can borrow money – through your super fund – to purchase residential and commercial property investments. This can provide significant opportunities for financial gain in the short and long term.

Establishing a SMSF allows YOU to decide what to invest in and how the benefits will be paid to you upon retirement. However, like other super funds, the assets and money are solely for retirement benefits. It cannot be used to run a business, renovate a house or benefit you before retirement.

Acquiring long term assets inside the superannuation environment isn’t only a great way to save tax but also an important part of Asset Protection.  Assets inside superannuation are generally protected from bankruptcy and also helpful in planning family wealth accumulation.

If you want information on how to use your super fund to help you create wealth, contact Morris Accounting today, or come to one of our two upcoming seminars in April and May.

Tax planning season – what are your big goals in business and wealth creation?

There are many tax planning strategies that can help you achieve great financial goals. The first thing to do is to set some objectives – where do you want your business or personal finances to be in 5 years? In 10 years? When you retire? Once you have worked these out, you need to work out how to get there. And this is where we can help. Morris Accounting can provide advice on long term and short term tax planning to help you achieve your wealth creation goals. We’ll start by looking at how you can reduce the amount of tax you pay so YOU have more money in your pocket (and not the tax office!). Then we can look at how to make that money work for you.

There are a few very effective ways of reducing your tax:

• Look at how you can use your deductions to move into a lower tax bracket, reducing the amount of tax you pay.
• Investigate salary packaging – which can be used by employees as well as business owners.
• Invest in superannuation – individuals who are self employed or owner/managed businesses can claim tax deductions, and employees can use salary packaging to obtain effective tax deductions for super, and move monies to be invested into lower tax arena.
• Consider negative gearing if you have some spare cash. Negative gearing most commonly occurs when you borrow money to purchase an asset (such as an investment property or shares) and the income generated is not enough to cover the interest on the loan. This can be a very effective form of leverage, and often results in lowering taxable income.
• Pay your BAS and lodge your tax returns on time! While this is not technically a tax minimization strategy, you will be fined if you lodge after the deadlines. Be warned, the ATO is cracking down on late lodgers!

Contact Morris Accounting on 1300 219 818 orinfo@morrisaccounting.com.au for advice and information.

From the Tax Office – a guide to managing a deceased estate

It is said that the only two certainties in life are death and taxes. When many people die, the two collide. If you are appointed as executor of the estate of a deceased, you are responsible for distributing the deceased estate to its beneficiaries. You are also responsible for fulfilling the tax responsibilities of that estate.

There may be capital gains tax (CGT) levied on an estate. However if the asset passes to the executor or a beneficiary then a special rule deems that the capital gain or loss made on the CGT asset is disregarded. However, if the CGT asset of the deceased estate is sold by the executor and the proceeds are distributed to the beneficiaries, the sale is subject to the normal rules and CGT applies.

A deceased estate with superannuation as part of the estate may also have tax implications. Superannuation paid as a lump sum death benefit to dependents is generally tax free. However if it is paid to a non-dependent tax may be payable, depending on a number of factors.

Tax may also be payable on death benefit termination payments made by an employer to the beneficiaries of a deceased employee. This depends on whether or not the beneficiary is a dependent of the deceased person, and also the total amount of payments received as a result of the same termination of employment.

For more information on the tax implications of a deceased estate contact Morris Accounting or visit the ATO’s website.