Message from David Shaw, CEO

The Tax Season has come around again quickly in this very fast-paced World. Upon recently meeting with some clients I have realised, that in some cases, that not only 12 months has elapsed but in some cases it has been two or three years since we have met face to face. I know that we have become very efficient in this day and age with information now being emailed but I would encourage all our clients to have a face to face appointment to discuss their financial future moving forward into the next three to five years.

Some things you may not know as you approach retirement which I have learnt through our financial planner, Matt Laird, are as follows:

Having the right balance in your superannuation

I was amazed to discover that if I retire with assets of $400K and include Centrelink benefits, I would retire on a similar income as if I had a $1,000,000 in Assets.

Assets Investment Income Aged Pension Total $200,000 $8,000 $32,728 $40,728 $400,000 $16,000 $26,660 $42,660 $600,000 $24,000 $18,860 $42,860 $800,000 $32,000 $11,060 $43,060 $1,000,000 $40,000 $3,260 $43,260 Assumptions

Married couple homeowners aged 65 and 67

$50,000 in non-income producing assets (Cars etc)

Investment Income returns of 4%

Centrelink only deem the income at pre-determined rates so any income returns you earn above the deeming rates currently 2% on the first $48,000 and 3.5% thereafter will not affect the level of pension that they actually pay. It is vital to receive advice on an appropriate investment strategy in retirement that maximises your income returns.

If you haven’t booked in to meet with Matt Laird, our financial planner, to look at your financial situation, even if you are still ten years from retirement, I thoroughly recommend that you contact Julie Busuttil via email [email protected] who can organise a complimentary initial meeting.

Matt’s team can also do a complimentary health assessment on your personal insurance cover to make sure that you have appropriate cover. There is as choice of 24 insurance companies that he uses to do the health check and you simply need to send in your current policy so Matt and his team can make the proper comparison.

Melbourne Office

Please note that our Melbourne office has moved back to Port Melbourne and I would welcome you to make an appointment to see me or alternatively, Lindsay Davis who is a Director of WSC Group and our 4th largest shareholder.

Our new street address is:

Unit 15, 3 Westside Avenue

Port Melbourne VIC 3207

Our postal address remains the same:

PO Box 420

South Yarra VIC 3141

Postage

This is a reminder that postage of a standard letter has increased to 70 cents. We are charged a further $1.60 each letter and it is not delivered to us until the additional payment plus fine is paid. Please ensure that you send your information to us with the correct postage to avoid your information being delayed at the post office.

2014 Readers Choice Awards are now open (voting closes 31st Aug 2014)

Last year David Shaw, WSC Group was awarded the 2013 Readers Choice Award - Property Tax Specialist. If you would like to vote in 2014 below is the link to the voting form.

www.yipmag.com.au/rc/2014

Some important tax changes from 1st July

Medicare Levy

The Medicare levy rises from 1.5% to 2%.

2% Deficit Levy

The new "Deficit Levy" (tax on high income earners) applies to taxable income in excess of $180,000.

Tax rates for the 2014/15 income year are as follows:

Taxable Income $ | Taxable Payable $

0 – 18,200 Nil 18,201 – 37,000 Nil + 19% of excess over $18,200 37,001 – 80,000 $3,572 + 32.5% of excess over $37,000 80,001 – 180,000 $17,547 + 37% of excess over $80,000 180,001+ $54,547 + 47% of excess over $180,000

The above rates do not include the Medicare levy of 2%.

SGC

The compulsory employer paid super contribution rises from 9.25% to 9.5%.

Superannuation contribution caps

The general concessional contributions cap rises from $25,000 to $30,000. For individuals, aged 49 or over on 30 June 2014, the concessional contributions cap is $35,000.

The non-concessional cap is increased from $150,000 to $180,000. That means the 3-year bring forward rule increases from $450,000 to $540,000.

PAYG installments threshold increases from 1 July 2014

The ATO has announced changes to the pay as you go (PAYG) instalments entry and exit thresholds.

From 1 July 2014, PAYG instalment thresholds have increased, which means that some taxpayers no longer need to pay instalments.

The entry and exit thresholds for:

business or investment income will increase from $2,000 to $4,000; adjusted balance of assessment will increase from $500 to $1,000; and notional tax will increase from $250 to $500. There will no longer be a requirement for entities registered for GST to remain in the PAYG instalment system, if they have a zero instalment rate.

The ATO says that if taxpayers no longer meet the entry rules, they will be automatically exited from the PAYG instalments system. It will send a letter to notify tax agents of a client’s automatic withdrawal.

If they want to continue to pay instalments towards their end of year tax liability, they can voluntarily re-enter the PAYG instalment system.

ATO Warnings

Now phone scammers target taxpayers with threats

Taxpayers are being warned to be on the lookout for a malicious scam that attempts to intimidate them into paying a fake tax debt over the phone.

“This scam is particularly concerning because it threatens taxpayers with legal action or arrest if they do not immediately hand over money, and their personal financial details, over the phone,” said ATO Chief Technology Officer, Todd Heather.

If people receive a call from the ATO and are concerned about providing their personal information over the phone, they should ask for the caller’s name and phone them back through the ATO’s switchboard on 13 28 69.

Get a second (investment) opinion

The ATO is encouraging anyone unsure about a tax investment they have been offered to seek a second opinion from an independent and trusted tax professional, so as not to be fooled by legitimate-looking tax avoidance schemes.

Deputy Commissioner Tim Dyce says illegal schemes are usually designed to appear legitimate, even to experienced investors, but there are tell-tale signs you can look out for. In particular, he advises people to watch out for unusual financing arrangements such as round-robin financing and non-recourse loans.

In one case, promoters offered a ‘mortgage management plan’ promising to assist investors in repaying their home loan sooner.

The scheme involved using the equity in their home to get additional loans to claim investment deductions equivalent to home loan interest payments.

Be wary of promoters that:

• offer zero-risk guarantees for their product;
• refer you to a particular adviser or expert. They may seek to persuade you by claiming the adviser has specific knowledge about the arrangement and the promised tax benefits; and
• ask you to maintain secrecy to protect the arrangement from rival firms and discourage you from obtaining independent advice.