ATO Focus on SMSF's
The ATO has released its 'Compliance Program 2011/12' outlining key focus areas attracting its attention for the coming year.
They have a range of measures in place to detect and deal with those who evade their obligations, including working across government agencies and the use of overseas networks.
Their key focus areas this year include the cash economy, work related deductions and self-managed superannuation funds (SMSFs).
The ATO has released its 'Compliance Program 2011/12'
outlining key focus areas attracting its attention for the coming
year.
They have a range of measures in place to detect and deal with
those who evade their obligations, including working across
government agencies and the use of overseas networks.
Their key focus areas this year include the cash economy, work
related deductions and self-managed superannuation funds
(SMSFs).
While the ATO "will continue to work with SMSFs to fix genuine
problems", they state they may also take firm action,
including making funds non-complying, if they commit serious
breaches of the rules.
Editor: If a superannuation fund is made 'non-complying',
it will effectively be taxed on the value of its assets at 46.5%,
plus their income will also be taxed at 46.5% going forward.
This year, the ATO's compliance activity in relation to SMSFs
will focus on:
- newly registered funds, to ensure they have not been established to provide illegal early release of super;
- funds lodging their first annual return to ensure they are entitled to receive their 'notice of compliance';
- related-party investments, to ensure they are not contravening the 5% in-house asset limit or the prohibition of lending to members;
- exempt current pension income and non-arm's length income; and
- re-reporting of contributions (particularly if the re-reporting results in the member no longer being liable for excess contributions tax).
NEW THIS YEAR TO FAMILY TAX
The ATO has provided a summary of many of the tax changes that
apply to families from 1 July 2011.
Education tax refund – Inclusion of school
uniforms
The Government has changed the education tax refund to include
school-approved uniforms (including hats, footwear and sports
uniforms approved by a school as its uniform) purchased from 1 July
2011.
Dependent spouse tax offset phase-out
From 1 July 2011, eligibility for the dependent spouse tax offset
will be confined to taxpayers with a dependent spouse born before 1
July 1971.
Taxpayers who maintain an invalid or permanently disabled spouse,
support a carer or who are eligible for the zone, overseas forces
or the overseas civilian tax offsets are exempt from the new age
limit and will still effectively be able to claim the dependent
spouse tax offset via an expanded invalid spouse, zone, overseas
forces or overseas civilian offset.
Low income tax offset – Changes for
minors
The Government will remove the ability of most minors (children
under 18 years of age) to access the low income tax offset to
reduce tax payable on their unearned income (for example,
distributions from discretionary trusts, dividends, interest, rent,
royalties and other income from property).
Medical expenses
Taxpayers can claim a tax offset of 20% of their net medical
expenses over the set threshold, which is $2,060 for the 2011/12
income year (up from $2,000 for the 2010/11 income year).
Paid parental leave
Australia's Paid Parental Leave Scheme started on 1 January
2011. Eligible working parents will receive parental leave
pay (currently $589.40 a week before tax) for a maximum period of
18 weeks.
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