Message from David Shaw, CEO

Firstly, I would like to thank everyone for their interest shown in our recent seminars that focused on key property market trends and key indicators to consider when purchasing your next property, tax effective strategies to structure your property portfolio and dual income properties. If anyone would like to take advantage of a complimentary initial meeting with a dual income property specialist, please contact your local WSC Group office.

We have been undated with requests for further special interest topic presentations. To accommodate these requests we will be conducting a series of round table seminars at our branch offices. The first in the series will be Estate Planning to be held in our Brisbane office on Thursday 15th May and in our Sydney South office in Menai on Thursday 12th June. Registration for these events will begin at 5:45pm for a 6:00pm start. If you would like to attend please contact our office on 1300 365 125 or [email protected] to reserve your seat as they are strictly limited.

I will also be hosting a series of webinars on a variety of special interest topics. The first in the webinar series will be How Tax Variations Can Assist with your Cash Flow to be held on Tuesday 6th May at 6:00pm AEST. If you would like to register please click on the following link: https://attendee.gotowebinar.com/register/4592848443452302081. An additional webinar on this topic will be hosted on Wednesday 7th May at 12:00pm AEST, if you would like to register please click on the following link:https://attendee.gotowebinar.com/register/5439849529328252929. I strongly encourage all property investors to register as PAYGW Tax Variations are a great way to immediately improve cash flow.

Thank you to those who have already returned their PAYGW tax variation checklist. For those who are yet to return the completed check list don’t forget to do so to ensure your Tax Variation is lodged prior to the start of the new financial year. If you are unsure you should have a Tax Variation completed I encourage you to either register for our webinar or contact your Client Manager.

In other exciting news for our NSW based clients, our St Leonards office on Sydney’s North Shore is now open for business. To help celebrate we will be hosting a breakfast on Wednesday 4th June, if you would like attend please contact our office for more information.

Kind Regards,

Federal Court overturns AAT excess contributions decision

A Federal Court ATO test case has overturned an Administrative Appeals Tribunal (AAT) decision that there were 'special circumstances' that allowed an excess contribution to a super fund to be disregarded.

The case involved husband and wife taxpayers, Mr and Mrs Dowling, who were primarily concerned with Mr Dowling qualifying for the age pension when he turned 65 years of age.

To be eligible for the pension, Mr Dowling withdrew $293,895 from his super fund, tax-free (as he was then over 60 years of age) and contributed it into Mrs Dowling's superannuation fund in the 2009 income year.

In the 2011 income year, Mrs Dowling read in the media that superannuation benefits either may not be taxed at all, or could be minimally taxed, when paid to the beneficiaries of her estate upon her death.

To secure this favourable tax treatment, Mrs Dowling withdrew $240,933 from her superannuation account on 30 August 2010, and re-contributed $200,000 of it as a personal non-concessional contribution.

Mrs Dowling did not seek professional advice from a tax lawyer or an accountant, and had inadvertently made an excess contribution to her superannuation fund (Editor: As most taxpayers are currently only allowed to contribute $450,000 in a three year period).

The Federal Court found that there were no 'special circumstances' and that the taxpayer was liable for excess contributions tax of more than $20,000.

Maximise Your Depreciation Entitlements when Renovating Your Investment

Many property investors are unaware of the tax benefits deductions associated with renovating an investment property. It is extremely beneficial for property investors to consider a pre-renovation depreciation schedule, as this will ensure depreciation entitlements are maximised.

Property Investors should engage the services of a Quantity Surveyor to have a pre-renovation depreciation schedule completed. Prior to the renovation being undertaken a Quantity Surveyor will identify the items that are eligible to have their value written off immediately. This will increase the tax deductions the owner is eligible to claim in their tax return.Once the renovation is completed, another depreciation schedule should be completed to identify the value of the new assets within the property and claim depreciation on these assets.

Renovations that contain new structural work that has occurred on residential properties after 18 July 1985 after or for commercial property after 20 July 1982 on commercial property are eligible for the capital works allowance. It is highly recommended that property investors engage a Quantity Surveyor who specialises in Tax Depreciation to complete a Depreciation Schedule so is that any renovations completed by previous owners can will be identified and included in the Depreciation Schedule.

Identifiers that Property Investors should be aware of when selecting a when choosing a Quantity Surveyor it is best to look check that they are a member of the Australian Institute of Quantity Surveyors and a registered tax agent.

Please contact our office if you would like to be put in touch with a reputable Quantity Surveyor firm to assist you in this process.