NEW Register of Foreign Ownership – Do you need to notify it?

Australia’s Foreign Investment Review Board (FIRB) is a government body that manages foreign investments and purchases of Australian land and securities. When a foreign investor is granted permission by FIRB to buy land, property and securities in Australia, the foreign investor is obligated to register any changes to ownership to the new Register of Foreign Ownership of Australian Assets, which falls under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA).

The new Register is not publicly accessible.

What changed from 1 July 2023?

From 1 July 2023 the new Register under the FATA is effective and foreign investors who acquire or dispose of an entity or their interest changes by at least 5% in an entity, then they must notify the new Register within 30 days of when the holder of an interest is aware, or, as some changes are passive, ought reasonably to be aware, of a change.

Is FIRB approval still necessary?

Yes, foreign persons wanting to invest in Australian interests must apply for and be granted FIRB approval prior to any purchase of an eligible entity.

The new Register is an additional regime for foreign investors and is part of the FATA, ensuring that foreign investment is regulated in accordance with Australia’s national interest and to the benefit of Australia’s economy.

Is there a cost for notifying the new Register?

No, there is no cost for notifications to the new Register. There remains a cost, indexed annually, for applying for and seeking FIRB approval which must be received prior to an acquisition.

For what interests must notification be given?

Foreign investors must notify the new Register of the following actions occurring from 1 July 2023, including but not limited to:

1. an interest in Australian land, excluding equitable interests of less than a 5-year lease or licence in agricultural land
2. a legal interest in a share or unit of an Australian land corporation/trust or in the trustee of an Australian land trust
3. an interest in an exploration tenement
4. registrable water interests
5. an acquisition of shares or assets of an Australian business or entity, notifiable under the FATA

Generally, acquisition and/or disposal of, or changes to, interests prior to 1 July 2023 do not require notice to be given to the new Register.

However, if you become a foreign person and are a holder of interests, regardless of when the acquisition of your interests occurred, notice must be given to the new Register.

The FATA obliges foreign investors to provide notice of changes as they occur over the period of ownership. If the interest changes in nature OR the percentage interest changes OR land or securities are sold or a land lease ceases OR if you cease to be a foreign person, then, among other changes not herein mentioned, these must be reported to the new Register.

Review and Update Accounting Systems

Foreign persons are required to keep records of register notices for five (5) years and failure to do so may constitute an offence, so it would behove foreign persons to undertake a review of their internal accounting systems and processes to ensure prudent record-keeping and legal compliance with the FATA’s new Register.

Your existing accounting procedures might now need to be updated to monitor Australian investment activity more closely and to fully encompass the broad range of notification requirements of the new Register.

How to notify the new Register

Foreign investors must use the Australian Taxation Office (ATO) portal by:

• Setting up a myGovID account;
• Verifying their identity; and
• Registering as a foreign investor

You may choose to appoint YML Legal to lodge register notices on your behalf. YML Legal has the professional expertise to guide you through the new register’s obligations for foreign investors.

How can YML help?

Talk to YML Legal today to see how YML Group can assist you with your foreign investment notifications. For more information, view our website and contact us on (02) 8383 4499 or by using our Contact Us page on our website.

Do you want to make Interest-Only Repayments?

If you’re an investor with an interest-only investment loan that is going to revert soon to principal + interest repayments, OR you have a high principal + interest investment loan, then call YML Finance on (02) 8383 4466 and talk to us about our new product.

We have a new product that could potentially help you to go back to making lower interest-only repayments on your investment loan.

Reach out to us NOW and learn more about how we can help you by calling us on (02) 8383 4466 and requesting a callback or making an appointment with the YML Finance Team.

How can YML help?

Talk to our YML Finance Team today to see how YML Group can assist you with investment loan repayment options. For more for more information, view our website and contact us on (02) 8383 4466 or by using our Contact Us page on our website.

YML Chartered Accountants Digital Transformation

To align with the digital world and embrace technological advancements, you will notice some changes in documentation such as tax return and financial statement format, starting from 1st Jul 2023, some of our client's YML service invoices will be sent via Xero, a trusted and secure online accounting software. We want to assure you that this change is entirely legitimate and not a fraudulent activity. You can expect to receive your invoices directly from Xero on our behalf.

If you have any questions or concerns regarding the new way, we send your invoice or any other matter, please feel free to reach out to our team. We value your feedback and are always here to assist you.

How can YML help?

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

Superannuation Guarantee Rate – Change from 1 July 2023

Australian employers must make mandatory contributions, paid quarterly, to their employees’ nominated superannuation funds. The contribution is calculated as a percentage of an employee’s ordinary-time earnings and is known as the Superannuation Guarantee (SG).

On 1 July 2023, this percentage rate went up by 0.5%. The Superannuation Guarantee percentage rate – from 1 July 2023 to 30 June 2024 – is now 11%.

Employers are legally obligated to make SG contributions on behalf of their eligible employees. Doing so ensures that employees are not reliant on their own contributions to save and invest for their future retirement. Therefore, employers must keep informed about new compliance matters as percentage rates change each year.

Employer Compliance

The SG contribution scheme requires employers to meet their legal obligations and responsibilities to employees by making accurate and timely contributions within the relevant regulatory framework.

The Australian Taxation Office (ATO) offers a checklist for businesses to help them remain compliant. Here are some points for you to remember:

Update Software: Ensure that your Single Touch Payroll (STP) software is up to date with the recent SG percentage rate change from 10.5% to 11%.

Identify Eligible Employees: Reassess your eligible employees, including any contractors and employees sent overseas on behalf of the business.

Recalculate Ordinary-Time Earnings: Evaluate what earnings qualify as OTE and make any adjustments necessary for the SG calculation in this new financial year.

Check SG Payment Dates: The ATO sets out SG payment dates for each quarter’s required payments by employers to their employees’ nominated superannuation funds. The dates follow the end of each business quarter. This financial year’s contributions are due by:

• 28 October 2023,
• 28 January 2024,
• 28 April 2024, and
• 28 July 2024.

Failure to pay the SG on time can result in penalties imposed by the Australian Taxation Office (ATO). These penalties may include interest charges, administration fees, and even legal action.

Businesses may incur increased tax liabilities for late payment of SG contributions. This is because SG contributions are tax-deductible for Australian businesses, except when an SG contribution is paid late. In the case that an employer does not pay SG contributions on time, the ATO will automatically disallow any tax-deductibility of those SG amounts.

YML Group offers its specialist guidance and advice to help employers to understand the specific implications and benefits of the SG contribution scheme for their businesses and their employees.

How can YML help?

Talk to our YML Business Services Team today to see how YML Group can assist you with your superannuation guarantee obligations. For more for more information, view our website and contact us on (02) 8383 4455 or by using our Contact Us page on our website.

You may access your Superannuation Benefits… When?

Australia’s mandatory retirement savings scheme – superannuation – ensures working Australians have money invested to fund their future retirement. Having worked hard and saved towards your retirement, you want to know when you will be eligible to access your retirement funds. Generally, you may access your superannuation benefits when you meet specific conditions outlined by the Australian Taxation Office (ATO).

Superannuation benefits are subject to rules governing withdrawal, so that your retirement funds are protected until such time as you retire fully and permanently, or you satisfy a ‘condition of release’.

If you satisfy a condition of release, you will have access to unrestricted, non-preserved superannuation benefits from your fund. The amount of unrestricted, non-preserved benefits available to you will vary depending upon the condition of release that you satisfy.

Conditions of Release

In addition to conditions of release under law, it might be that your superannuation fund’s trust deed sets out further rules for payment of benefits. Be sure to check for additional rules in your trust deed.

One condition of release is known as ‘preservation age’.

According to law, your superannuation benefits must be preserved until you reach preservation age. What is yours?

Preservation age is a time when you may access your superannuation contributions and any subsequent earnings in the following ways:

Retirement – You have reached your preservation age and permanently retire. You may choose to have your funds released as a lump sum, a regular income stream, or a combination of both.

Transition to Retirement – You have reached your preservation age and choose to keep working. You may access a portion – limited to total payments of between 4% and 10% of your account balance each year – of your retirement benefits as a non-commutable income stream (that is, not as a lump sum) during your transition to permanent retirement.

Attain the age of 65 – You are 65 years old and therefore your superannuation is no longer subject to preservation. You may access it without conditions, including whether you remain employed.

Other ‘conditions of release’ include:

Compassionate grounds and severe financial hardship – In cases where it is deemed essential that early access to a portion of superannuation is given – for example, medical treatment, palliative care, mortgage foreclosure, living expenses – then your application is subject to special criteria, your eligibility is assessed on a case-by-case basis, and government approval is required. Tax may be payable upon release of funds.

Terminal illness – If you are diagnosed with a terminal medical condition, then you may access your superannuation tax-free, regardless of your age.

It is important to note that accessing your superannuation earlier than preservation age may have taxation implications or affect your retirement benefits.

Who else may access your Superannuation Benefits and when?

At your death, your nominated beneficiaries are entitled to receive the balance of your superannuation account.

Beneficiaries who are dependants – your spouse or children under 18 years of age – may receive their entitlement as either a lump sum or an income stream.

Beneficiaries who are not dependents may receive their entitlement as a lump sum.

The release of superannuation benefits requires personalised advice from a professional financial advisor prior to making any decisions about accessing your superannuation and to assess tax implications for beneficiaries.

Consulting with a qualified financial advisor at YML Group will enable you to understand your preservation age and other grounds for release. We can also inform you of any updates to the ATO’s conditions of release, as legislation pertaining to Australia’s superannuation scheme changes.

How can YML help?

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

Ways to stay afloat when interest rates keep going up

Mortgagees considering options to manage higher repayments on their loans might look at the following strategies to assist them with having financial flexibility and liquidity:

Offset Account: An offset account is a transaction account linked to your home loan. The balance in your account ‘offsets’ against your outstanding loan balance, thus reducing the overall interest you pay. For example, a loan of $500,000 and $50,000 in your offset account means you will only pay interest on $450,000, whilst still having access to your funds.

Redraw Facility: A redraw facility allows you to make additional repayments on your home loan, effectively reducing the principal loan amount. If you need access to those extra funds, you can ‘redraw’ them later. It is important to keep in mind that redraw facilities might charge fees and have limitations on redraw amounts.

Switch to Interest-Only Repayments: Making interest-only repayments on your home loan means you will pay only the interest amount for a specified number of years. You will be paying lower monthly instalments, providing you with short-term financial relief. However, during this interest-only period, you will not be paying off the principal amount and it will therefore not decrease during this time.

Refinance: Refinancing by securing a lower interest rate with another lender can lower your home loan repayments, freeing up more of your monthly budget and making available more disposable income for other expenses. You will also pay less interest over the life of your loan.

Your personal financial circumstances and the specific terms of your home loan offered by your lender are important to consider when choosing which option is best for you.

Reach out to us NOW and learn more about how we can help you by calling us on (02) 8383 4466 and requesting a callback or making an appointment with the YML Finance Team.

How can YML help?

Talk to our YML Finance Team today to see how YML Group can assist you with mortgage relief options. For more for more information, view our website and contact us on (02) 8383 4466 or by using our Contact Us page on our website.