Month: May 2020

SMSF – Would it suit you?



Managing one’s own private superannuation fund (SMSF) may appeal to those individuals with at least $200,000 in superannuation, who have the know-how to make investment decisions and who wish to be more directly involved with investing their life savings. A SMSF differs from a professionally managed industry fund because you, as trustee, are responsible for making all the investment decisions.

There are benefits to having control over your own retirement finances, including being able to understand your investments, choosing a wider range of investments that are accessible to SMSFs, maximising your SMSF’s tax position and reducing costs to manage your SMSF.

So, you have decided to manage your own SMSF…

You have choices. You either engage a financial adviser and work with them to decide what investments your SMSF should hold or you make all the decisions on your own. An adviser may help you articulate your financial goals and assist in formulating an appropriate investment strategy for your funds. Once invested, your portfolio needs ongoing management and reviewing to ensure it remains relevant to market conditions and to your goals. For a SMSF to be compliant, you will be required to keep records of all transactions and accounting matters.

Investments

You have a wider choice of investments under a SMSF. For example, you might invest in areas you already know well, such as direct shares and personal assets, such as artworks and property. Property is a key investment consideration for SMSF trustees because business owners may invest in their premises through their SMSFs, enabling them to lease those premises back to their businesses and thereby generate income and release capital at the same time.

Compared with a traditional industry fund, a SMSF may also borrow money to invest, giving you more flexibility. Rules allowing the borrowing of money by SMSFs mean more diversity of investments – earlier in a lifetime or greater in initial value – is possible with a SMSF.

Taxation

You could benefit from a material impact on your total retirement finances by exploring and taking advantage of a myriad of tax strategies specific to SMSFs.

You, with your financial adviser, can design your SMSF to benefit from tax efficiencies, such as interest deductions from borrowing money; tax-free thresholds in the SMSF Pension Phase; asset segregation inside and outside of your SMSF for a balance that gives you possible access to benefits like the Commonwealth Seniors Healthcare Card or even some Aged Pension.

Costs

Having your own SMSF means you can cut investment costs, especially when transitioning from Accumulation Phase to Pension Phase because you will not need to sell down your assets which invariably incur selling fees and/or taxes. Instead, you may more simply retain your investments upon retirement and enter a Transition to Retirement Income Stream (TRIS).

There might, however, be costs associated with managing your SMSF, such as costs for appropriate insurances, accounting, auditing and financial advice. Your accounting and administration teams will also play a key role in ensuring compliance and legal requirements of an SMSF are met.

Benefits of a SMSF…

Now, you can see the possible benefits of managing your own SMSF are more:

It is important to know that you, as trustee, are solely liable for the outcomes of your financial decisions for your SMSF. There is a risk that your investment strategy will not deliver the returns on investment that you planned or hoped, so it is highly advisable that you seek advice from a certified professional finance advisor.

How can YML help?

Talk to our YML Super Solutions Team today to see how YML Group can assist you with your SMSF. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.

MyGov – What is it and how do you apply?



MyGov is an online application that provides a simple and secure link to the Australian Government’s services. You will need only one login and one password to access numerous government services including Centrelink and the Australian Taxation Office (ATO).

During the economic downturn caused by the COVID-19 pandemic, many business owners, employers and employees are finding themselves in an unprecedented predicament of fewer or no customers, temporary closure of a business or without a job at all.

If you are one of these people and are seeking to obtain critical funding from the Government’s COVID-19 stimulus packages, you will need to create a MyGov account.

Opening a MyGov account

First, open the MyGov webpage – www.my.gov.au – and press Create Account. After reading and agreeing to Terms of use, enter your email address. MyGov will send a code to your email address. Enter the code, enter your mobile phone number and, finally, create a password and three personal security questions and answers.

How to open a MyGov account
   1.      Press Create Account    
   2.      Read Terms of use    Agree to Terms of use
   3.      Enter an email    Enter your email address
   4.      Enter code    Enter code sent to your email
   5.      Enter your mobile    Enter your mobile number
   6.      Create password    Create a password
   7.      Create secret questions 1-3    Create secret questions and answers


Your MyGov account is now ready for you to link government services that you will use.

Already have a MyGov account?

If you already have a MyGov account, check that you also have a Centrelink Customer Reference Number (CRN), so that payments can be made to you.

Requesting a Centrelink CRN

First, sign in to your MyGov account, then select I need a CRN. You will be asked to enter your identity details – from any, or all, of the following: passport, birth certificate, Australian citizenship certificate, Australian visa, driver’s licence and/or other documents. You will be asked to enter your Medicare details and other personal information.

Once you receive a CRN, the Centrelink online service will then be linked directly to your MyGov account.

Jobseeker Payment (formerly Newstart Allowance)

If you find yourself without work or your work hours have been reduced during the COVID-19 pandemic, then using your MyGov online account is the easiest way to apply for the Jobseeker Payment.

Log in to your MyGov online account, go to Centrelink, select Payments and Claims, then Claims and then Make a Claim – Get Started.

You will need a letter from your employer confirming that you have reduced working hours if this is the case. Otherwise, you will be asked to provide supporting documents during the Jobseeker Payment claim process. These supporting documents will vary depending on your personal unemployment circumstances, but they can be efficiently uploaded to Centrelink via your MyGov online account.

Lastly, a phone appointment will be made with Centrelink and when Centrelink calls you – from a private number, you will be able to finalise your claim.

If your claim is approved, reporting your work activity and any earnings to Centrelink every two weeks via your MyGov online account may be required.

There are many people during this crisis who will access Centrelink via MyGov for the first time in their lives. It can be frustrating, but with some guidance here and YML Group able to help you navigate your way, helping your business and/or your employees to survive this difficult time is achievable.

How can YML help?

We hope that this guide helps you to access the government incentives independently if that is your preference.  Alternatively, please talk to our Accountants today if you would like to engage YML Chartered Accountants to manage the government incentive processes on your behalf. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

COVID-19 – Rent Moratorium + Financial Support



For a period of six months from 15 April 2020, the NSW Government has introduced an interim moratorium on evictions of tenants by landlords who are looking to evict due to rental arrears. Conversely, in support of landlords, the NSW Government is offering some financial relief as outlined in new legislation.

The COVID-19 Omnibus (Emergency Measures) Act 2020 contains the interim laws which apply for six months from 29 March 2020. Combined with the Residential Tenancies Act 1997, landlords and tenants are obliged to comply with and work within new parameters designed to brace the rental market during the COVID-19 pandemic.

Residential Landlords – Financial Support Package

The NSW Government has devised financial support for eligible residential landlords who are experiencing financial hardship.

A Land Tax concession is part of the NSW Government’s financial support package. A Land Tax waiver or a rebate of up to 25% of land tax (Jan – Dec 2020 year) is available to eligible landlords and if these savings are then passed on to those tenants experiencing financial hardship of at least 25% income loss.

If you would like YML Group to manage the Land Tax reduction application process for you, please do the following:

Click on the link below to engage us and provide us with your bank account details: https://app.hellosign.com/s/16cLMkVc

Last month, the NSW Upper House proposed an amendment that would see landlords receive up to $2500 per tenancy. This funding would be required to be passed on to tenants as rent reductions.

To be eligible for the $2500 funding, a landlord would need to provide evidence that a tenant has lost at least 25% of their income, has no more than $5000 in savings and pays at least 30% of their income towards rent.

Moratorium on Evictions

Landlords are temporarily banned from terminating a lease or applying for eviction orders due to rental arrears if their tenants are struggling financially to pay rent for reasons relating to the COVID-19 pandemic.

The moratorium is for 60 days from 15 April 2020, during which time a landlord is required to negotiate – in good faith – a rent relief agreement with a tenant. If, after 60 days, a tenant is still unable to meet his/her rent obligation, then a landlord may choose to issue a termination notice or seek an eviction order from the NSW Civil and Administrative Tribunal.

Rent Negotiations in Good Faith

A moratorium on evictions allows time for tenants to receive any government financial support they may be entitled to receive, as well as helping to prevent the spread of the COVID-19 virus by enabling tenants to remain in place. Therefore, NSW Fair Trading has increased funding to facilitate mediation between landlords and tenants, where needed, at no cost to either party.

A rent relief agreement between a landlord and a tenant may be made upon a tenant first providing evidence of a loss of at least 25% of their income due to COVID-19 factors, such as a job termination or reduced hours of work.

Rent Relief Agreement

A rent relief agreement should be made in writing and signed by both the landlord and the tenant. Any temporary agreement made between a landlord and a tenant may consider: Landlords also experiencing financial hardship with mortgage repayments should negotiate with their mortgage lenders for a reduction or a waiver of their repayments, thus better enabling landlords to provide rent relief for their tenants.

Tenancy Terminations

If, or when, the time comes that a landlord finds that themselves in a position to seek termination of a lease, there are numerous reasons to do so. These can be seen on a flowchart provided by NSW Fair Trading

To view the various types of tenancy termination, go to:

https://www.fairtrading.nsw.gov.au/__data/assets/pdf_file/0009/818802/Flowchart-for-landlords-termination-of-tenancy-options.pdf

Next Steps

It is important to obtain accurate information about the COVID-19 rental property changes in relation to your individual mortgage and rental property circumstances. We at YML Group – at the forefront of the latest related news and regulations – can help assess your mortgages and put you in an optimum financial position during the COVID-19 pandemic.

How can YML help?

Talk to our team today to see how YML Group can assist you. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.

Economic Stimulus Package Updates

1. Small Business Grant Applications

    To be eligible, businesses will need to:

Applications for a small business grant of up to $10,000 are now available through Service NSW and will remain open until 1 June 2020.

If you would like YML to manage the Business Grant application process for you, please do the following urgently:

Click on the link below to engage us and provide us with your bank account details

https://app.hellosign.com/s/Ec6LMXZA

2. JobKeeper Extended Dates

The ATO has extended the time to enrol for the initial JobKeeper periods, from 30 April 2020 until 31 May 2020.

If you enrol by 31 May 2020, you will still be able to claim for the JobKeeper fortnights ending in April and May, provided you meet all the eligibility requirements for each for those fortnights. This includes having paid your employees by the appropriate date for each fortnight.

For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by 8 May 2020. If you do not pay your staff by this date, you will not be able to claim JobKeeper for the first two fortnights.

If you would like YML to manage the JobKeeper Incentive process for you, please do the following urgently:

  1. Click on the link below to engage us and provide us with your bank account details

    2. https://app.hellosign.com/s/JTYX1jRe

  1. Click the link below if you are a business owner (and not an employee) in order for you to receive JobKeeper

    2. https://app.hellosign.com/s/Hu4BQXtt

  1. Provide the link below to your employees so that we can collate the employee information required for you to receive JobKeeper (you will also need to provide your employees with your ABN)

    2. https://app.hellosign.com/s/JhE06wTy

3. Land Tax Support Package

The NSW Government is introducing measures to help commercial and residential landlords manage their rental properties.

The support package includes a reduction of up to 25% of the land tax payable on a parcel of land in the 2020 land tax year. It is available when: Financial distress is considered to be: To be eligible for the land tax support package, you must have a land tax liability in 2020.

You must also meet the requirements outlined in the support package, namely:
How to apply:

Revenue NSW are currently streamlining the application process which will soon be available on the Revenue NSW website.

Supporting documents may include BAS statements, or a letter from an accountant.

Eligible landowners will be able to apply for a land tax reduction via refund. The amount of refund provided will be up to 25 per cent of a landlord’s 2020 land tax liability.

If you would like YML to manage the Land Tax reduction application process for you, please do the following:

Click on the link below to engage us and provide us with your bank account details

https://app.hellosign.com/s/16cLMkVc

4. Superannuation Minimum Pension Requirements

For many retirees, the significant losses in financial markets as a result of the COVID-19 crisis are having a negative effect on the account balance of their superannuation pension or annuity.

To assist retirees, the Government has reduced the minimum annual payment required for account-based pensions and annuities, allocated pensions and annuities and market-linked pensions and annuities by 50 per cent in the 2019-20 and the 2020-21 financial years.

Superannuation and annuity providers calculate the minimum annual payment required at 1 July each year, based on the account balance of the member or annuitant. The 50 per cent reduction will apply to the calculated minimum annual payment.

Example

Robert is 67 years of age. At 1 July 2019, Robert’s account based pension balance was $480,000. Robert’s minimum annual payment was calculated at

5% (the percentage applicable to his age) of his pension balance, which is $24,000. Following the law change, Robert’s required annual minimum pension payment for 2019-20 is $12,000.

Please note that If Robert has already withdrawn more than $12,000 for 2019-20, he is not able to put the amount above $12,000 back into his superannuation account unless he’s eligible to make superannuation contributions and subject to any other rules or limits such as contribution caps.

How can YML help?

By completing the links provided above you are assured that YML will manage the process.  If you have question please contact YML Group today on (02) 8383 4400, or by visiting the Contact Us page on our website.