Month: February 2022

Transferring asset ownership to a SMSF is an in specie contribution



In specie is from Latin and means ‘specified in its actual form’. Therefore, a business or a related party or individual transferring an ATO-approved asset – shares, property or managed funds – to a SMSF, without first selling the underlying investment, is, in fact, making an in specie contribution.

In general, contributions to superannuation funds may incur taxation liabilities, so what is the benefit of transferring an asset in specie?

What is the benefit of an in specie transfer?

The most likely benefit is reduced tax payable on the transfer of an asset. Where a cash transfer is not possible in to a SMSF, then an in specie transfer can reduce the amount of income tax and capital gains tax (CGT) which would be incurred on any prior sale of an asset.

For example, if a SMSF member transfers real estate property to their member account, the SMSF will need to take in to consideration the transfer cost consequences as the beneficial ownership of the asset will change upon transfer. No longer would the individual (outside of the context of SMSF membership) benefit from owning the property, rather it would be the SMSF as the entity owner of the property benefiting.

Once an in specie contribution has occurred – a SMSF member has transferred ownership of an asset they own to their member account – the increase in the capital value of the SMSF is considered a contribution by the SMSF member. As the SMSF member has thereby disposed of an asset, any financial gain realised by the SMSF member may be subject to CGT. However, there is a benefit to transferring commercial property used in an SMSF member’s own business where a concessional contribution may be relevant.

Non-concessional contribution (NCC) and concessional contribution (CC) caps will determine how the market value of an in specie transfer will be divided between members of a SMSF. For example, a married couple’s commercial property in specie transfer amount will be considered in relation to each party’s non-concessional cap (up to $300,000 each over three years), so as to avoid exceeding any caps which would result in tax payable.

What should be considered before transferring in specie?

Before transferring an asset, the specific circumstances of the transfer need to be considered, such as: Guidance from YML’s Super Solutions can help you make these assessments of your in specie transfers, as well as help ensure that full compliance with both the ATO and the receiving SMSF is fulfilled by all involved parties.

What about moving assets out in specie?

Assets can be transferred out of SMSF member accounts upon retirement age being reached. A common practice is for an SMSF member to buy a property for future use in retirement. Whilst still working, an SMSF member transfers the retirement property in specie to their SMSF member account and upon retirement, the property is taken as a lump sum in specie transfer, rather than as an SMSF asset sale requiring the SMSF member to fund a purchase price.

Is an in specie transfer difficult to do?

The decision to transfer in specie to a SMSF is a complex decision and to avoid complications around the process, seeking guidance from expert financial advisers such as YML is encouraged prior to commencing an in specie transfer.

How can YML help?

Talk to our YML Super Solutions Team today to see how YML Group can assist you with your SMSF in specie transfers. For more information, view our website and contact us on (02) 8383 4444 or by using our Contact Us page on our website.

Superannuation Guarantee – Quarter 2 Late Payments Due and New 2022 Threshold Removal



Employers – Are you late paying your compulsory SGC?

Superannuation guarantee contribution (SGC) percentage for the 2021 financial year is 9.5 per cent. Superannuation guarantee is the compulsory contribution amount calculated on base salary paid to an employee in each quarter and payable by employers. From the 2022 financial year the SGC will increase to 10 per cent.

The maximum SGC base means employers have limited liability. For the 2021 financial year, the income per quarter threshold is $57,090 and for the 2022 financial year the income per quarter threshold will be $58,920.

Employers were obliged to pay SGC for Quarter 2 (1 October – 31 December 2021) to their employees’ superannuation fund accounts by 28 February 2022. Those employers who have not yet paid or who have not paid in full are being audited as information is now being sent by superannuation funds to the Australian Taxation Office (ATO).

Superannuation Guarantee Charge Statement – Due Date

It is important that employers notify the ATO of their late SGC payments via the ATO’s process of lodging a Superannuation Guarantee Charge Statement within 28 days of the due date of 28 February 2022 (that is, by 28 March 2022) and by also paying the Superannuation Guarantee Charge which is made up of: The ATO will more likely consider favourably those employers who make a genuine effort to meet SGC obligations, especially if an employer has a good record of past compliance. Where an employer manages to lodge their SGC Statement after the due date but prior to being notified by the ATO of non-compliance, the ATO may reduce or waive penalties.

$450 Income Threshold – Removal from 1 July 2022

As part of the changes to the superannuation guarantee contribution (SGC) announced in the 2021/22 Federal Budget, the SGC will be paid to all employees at the new rate of 10 per cent (commencing 1 July 2022) commensurate with employees satisfying relevant superannuation guarantee eligibility criteria.

The amendment to remove the $450 per month income threshold received Royal Assent on 22 February 2022 and will first apply after the 2022 financial year, benefiting casual and part-time workers who currently do not receive the SGC due to the $450 per month income threshold.

The changes required will be made through Single Touch Payroll (STP) and businesses must prepare to meet their new obligation of SGC payments being made to ALL their SGC-eligible employees – regardless of income level – on their payroll from 1 July 2022.

Next Steps

YML’s Chartered Accountants can help employers with SGC Statement preparation and lodgement by 28 March 2022 and with STP adjustments from 1 July 2022.

How can YML help?

Talk to our YML Chartered Accountants Team today to see how YML Group can assist you with your ATO compliance. For more information, view our website and contact us on (02) 8383 4400 or by using our Contact Us page on our website.

Economic Stimulus 2022 – Latest Government Incentives – What can your business receive?



2022 Small Business Support Program - NEW

If you’re a business, sole trader or not-for-profit organisation in NSW and you've been impacted by the Omicron wave of COVID-19, you may be eligible for a payment under the 2022 Small Business Support Program.

The program provides cash flow support to help eligible businesses survive the impacts of COVID-19 and maintain their NSW employee headcount.

Eligible businesses will receive one payment covering the 4-week period of February 2022. Businesses will not receive payment for January 2022.

If you’re an employing business, the payment will be equivalent to 20% of weekly payroll for work performed in NSW: If you’re a non-employing business, such as a sole trader, you may be eligible to receive a payment of $500 per week.

Eligible businesses can use funds to cover business costs incurred due to the impacts of the Omicron strain of COVID-19 in NSW. These costs may include: Applications close on 31 March 2022.

NSW Small Business Fees and Charges Rebate

The NSW Government has announced that the small business fees and charges rebate will increase from $2,000 to $3,000. Eligible employing businesses will be able to use the rebate against 50% of the cost of rapid antigen tests from late March. More information will be available soon.

Sole traders and small business owners must: Whilst running a business, NSW state and local government fees and charges befall most small business owners and sole traders: costs such as council rates, outdoor seating fees, event fees, food authority and liquor licences and tradesperson licences.

Eligible applicants can lodge multiple claims – as these types of expenses arise and are paid – until the $2000 rebate cap is reached.

The NSW Government stipulates that for a fee or a charge to be eligible, it must be due and paid from 1 March 2021.

There are some costs that may NOT be claimed: Applications end on 30 June 2022.

Dine & Discover NSW Vouchers

The NSW Government has launched Dine & Discover NSW to encourage the community to get out and about and support dining, arts, and recreation businesses.

Once approved as a Dine & Discover NSW business, you’ll be able to accept and redeem vouchers straightaway. You'll be able to do this through the Service NSW for Business app.

Businesses that register to accept Discover NSW vouchers can also accept Parents NSW vouchers.

Takeaway businesses are eligible to register for the scheme.

Vouchers are available to all NSW residents aged 18 or over and are valid to 30 June 2022.

Alfresco Restart Rebate

If you are a small or medium food and beverage business wanting to create or expand your outdoor dining area, you may be eligible for a $5,000 rebate under the NSW Government’s Alfresco Restart package.

The rebate is available to the first 5,000 eligible small or medium food and beverage businesses that register.

There are 2 steps involved in the Alfresco Restart rebate:

1. Register for the rebate 2. Claim the rebate NSW Commercial Landlord Hardship Grant

The NSW Government has announced that this grant has been extended until 13 March 2022. Applications for eligible landlords who provided rent relief from 15 November 2021 to 13 January 2022 are now open.

Grants of up to $3,000 per month (GST inclusive), per property, are available for eligible landlords who have provided rental waivers to affected tenants. Rent waived must comprise at least half of any rental reduction provided. The remaining portion may be a rental deferral. The grant does not apply to rent deferrals. For more information, see the guidelines.

Grants will be paid as a lump sum amount for the rent waived from: Applications close 31 May 2022

JobMaker Scheme

The JobMaker Scheme offers an incentive for small- and medium-sized businesses to expand their workforce and employ younger Australians in need of a job and, in turn, deliver growth potential for those businesses.

Eligible employers must register with the Australian Taxation Office (ATO) who are administering the scheme. JobMaker Hiring Credits are paid each quarter – from 1 February 2021 – for each eligible additional employee hired from 7 October 2020 until 6 October 2021.

Eligible employers may receive a JobMaker Hiring Credit of $200 a week for an employee aged 16 years to 29 years of age AND $100 a week for an employee aged 30 years to 35 years of age.

Scheme will end on 6 October 2022.

How can YML help?

Talk to our YML Chartered Accountants Team today to see how YML Group can assist you with government financial assistance. For more information, view our website and contact us on (02) 8383 4400 or by using our Contact Us page on our website.