Planning for the inevitable Part 1

We should think about the “future” – planning for the inevitable and making sure that your paperwork is in order.

It is an important consideration, although people rarely like to think about it. Everyone will die. Although you cannot change that fact, you can ensure that upon your death your wealth passes smoothly and efficiently to your loved ones.

Here are some important considerations:

Current Will—do you have a Will? If you do have a Will, is it current?

Have your circumstances changed since your Will was drafted?

Remember that marriage generally invalidates Wills and Wills may be wholly or partially ineffective due to the death of a beneficiary, or a specifically gifted asset no longer existing.

Trusts established by Wills—does your current Will set up trusts upon your death? Leaving assets on trust instead of giving them directly to a dependant can be very desirable. Trusts in Wills are often used where beneficiaries cannot manage money themselves, have addictions, are being sued, etc. Trusts in Wills can also allow tax effective planning.

Family trusts—the person who can hire and fire the trustee of a family trust has ultimate control of the trust.

Do you have this role? Who will have the role after your death?

Powers of Attorney—do you have any in place? These can be invaluable if you lose the capacity to make decisions or are overseas.

Individual trustees—do any of your trusts and/or your DIY super fund have individual trustees instead of a company acting as trustee? Companies never die and changing the directors of a company is a lot easier than changing individual trustees of a trust where someone has died.

Superannuation pensions—do you receive any superannuation pensions? Upon death, what will happen to them? Do you want your pension to continue to be paid upon your death (e.g. to your spouse)? Or, are you happy for your pensions to be paid a lump sum?

Read out next blog to find out how a power of attorney can help you!

 

 

Rising Debt Scenario – Why buy 2 Properties NOW and be able to retire in 10 years time?

Why People Sell?

  • Poor location
  • Vacancy
  • “Bad” Tenants
  • Maintenance
  • Finance incorrectly set up
  • Cost of holding
  • Need to sell to access equity

The Plan:

  • Use other people’s money
  • Build a portfolio
  • Never, never, sell
  • Harvest the accumulated equity

Maximising tax REFUNDS from investment property

Many property owners are losing potential tax refund $ by failing to take full advantage of a property’s tax depreciation potential. An often overlooked method of obtaining tax refunds, property tax depreciation is available to any property owner who obtains assessable income by way of rent or operates a business from a property.

What is a quantity surveyor?

A quantity surveyor provides construction cost consultancy services to various individuals and organisations. A quantity surveyor is equipped with construction costing skills that enable them to specialise in pricing building costs. Quantity surveyors provide investors and owners of property, along with real estate agents and accountants with the following services:

  • Capital allowance tax depreciation reports
  • Replacement cost estimates

Quantity surveyors also provide financial institutions, developers, builders and architects with the following services:

  • Construction cost planning service
  • Assessment of work in progress
  • Forecasting & reporting

The Taxes to Consider Before you purchase a Rental Property

  • Income Tax
  • Land Tax
  • Capital Gains Tax
  • Stamp Duty

Income Tax is the tax you pay on your taxable income.

Land Tax varies from State to State and depending on the structure you choose.

Capital Gains Tax is the amount of tax that needs to be paid when you sell a property.

Stamp Duty – different in every State, it is the duty we pay to the Government when purchasing a property.

Rental Property Losses – Tax Implications

Buying property in a Trust versus buying in your personal name:

Personal Name

Advantages:

  • Any net loss incurred from holding an investment property in your personal name can be used to reduce a person’s taxable income, hence increasing your tax refund or reducing your tax payable.

Disadvantages:

  • The property is potentially exposed to creditors.

Trust Structure

Advantages:

  • Ability to distribute income of the trust between the beneficiaries in the most tax effective manner.
  • The other principal benefit of the owning of assets through a trust is that no one beneficiary has any claim to the assets of the Trust, and therefore a Trust is a means of owning assets for the purposes of asset protection.

Disadvantages:

  • Trust losses cannot be distributed to beneficiaries; the net losses can only be carried forward to be offset against future income.
  • There is a cost involved to set up the structure and higher ongoing costs.

In determining whether to utilise a Trust structure for the purposes of buying a rental property, it is necessary to give consideration to a wide range of issues, which are specific to each individual’s particular circumstances.

Please contact us to discuss your situation.

 

Going green to increase profits

Businesses can meet their triple bottom line and improve our environment simultaneously, by incorporating some simple, positive environmental activities into their everyday operations.

 By reducing your business’s environmental impact, you can save money and help save the planet. This small initiative may seem like it will make little difference to the environment, however if every small business adopts this approach it can make a significant difference to the environment. Waste not only uses up the earth’s resources, it squanders your money.

One of the hardest things to remember (but easiest things to do) is turn off all electronic devices and utilities overnight and weekends. Your printers, monitors, copiers, are all on ‘standby’ mode. The extra minute it takes to warm these up in the morning isn’t really that much of a hardship. Also, look for eco-friendly supplies and raw materials. And always remember to print out double sided when you can!

These steps will not only benefit the environment but also your business! Draw attention to the fact that you integrate these initiates throughout your business’s operations and this will allow you to differentiate your business from its competitors. If you’re willing to make a substantial commitment to eco-friendly operations, you can stand out from your competitors and carve a niche in the market. Due to rising environmental issues many customers are making choices based on a preference for environmentally sensitive products or services, and this can give you a competitive advantage.

Encourage employees to take public transportation to work. Many business are located near public transport. The benefits of such practices include saving fuel, and also mean that staff without their own transport can easily get to work. If you hire local staff the benefit may be even greater.

Sell a “green” product or service. Ready to go totally green? The market for environmentally sensitive products and services is exploding. Those considering starting a business or those looking to revamp their existing company, can focus on serving the eco-conscious market directly.

Have a go at inventing something. We’re still in the very early days of the green movement and many problems need to be solved. A good, workable idea for a product or service that can help save the planet has got good prospects, so now is the time to write that business plan and develop that product. Don’t forget about the intellectual property issues that may also need to be dealt with such as trademarks.

Avoid the post-Christmas party blues

The festive season is soon approaching, along with Christmas cheer and the work Christmas party.

End of year celebrations are a great way to bond with colleagues and conclude the year on a positive note by celebrating the year’s achievements. Although Christmas parties are a fun filled event, it is essential that employers remind themselves that they are responsible for this event. Therefore, employers will be held liable and need to provide a duty of care by OH&S standards to all employees.

Due to the fact that employers are hosts of the Christmas party, they have the legal obligation to ensure there is no post-Christmas party legal and HR aftermath. In addition to this, employers are also responsible for the service of alcohol at the venue and are required to supply food, low alcohol and non-alcoholic drink options. If the event is not in a licensed venue, it is important to employ staff trained in the responsible service of alcohol.

It is important for employers to consider notifying their staff of a start and finish time of the party of which they will be held responsible, and ensure it is clearly stated that any after-party events are not employer endorsed. We also advise that employers organise transportation, such as taxis and public transport, to and from the venue to ensure all staff members get home safely. If there is anyone you feel is responsible to oversee the event and ensure everything runs smoothly, we recommend that you assign them to that task.

In order to ensure the safe running of the Christmas party, provide a code of conduct to employees with acceptable and unacceptable behaviour at the work-related function, this can be distributed by a friendly email. Offensive behaviour and misconduct that is discriminatory or harassing in nature can result in employers being sued for their negligence.

Remind employees and ensure they are aware that your workplace’s social media policy is applicable during this event and to be cautious of posting anything online that may negatively impact your business’s brand.

These simple precautions can help to minimise risks ensuring stress-free celebrations all around.