Category: Newsletters

Proposed New Taxation Rule – Division 296 – to affect Individuals with over $3 million in Superannuation

What is Division 296?

Yet to be introduced as law into the Income Tax Assessment Act 1997 (Cth), Division 296 is a proposed taxation rule imposing an additional 15% tax on specified earnings of an individual’s Total Superannuation Balance (TSB). The proposed Bill will affect those superannuation members with a TSB of more than $3 million, generally, but not limited to, affecting high net-worth individuals in Australia.

From 1 July 2025, fund earnings on the portion of TSB above $3 million will be taxed under Division 296. As Division 296 is in addition to the current 15% concessional tax rate on fund earnings, fund earnings in excess (on the portion above $3 million TSB) may effectively incur a 30% total tax rate.

The Australian government’s aims of this proposed taxation rule are equity, as large superannuation balances currently receive generous taxation concessions, and revenue. It is expected that fewer than 0.5% of Australians are likely to be impacted, but will you be one of those affected?

Will Division 296 affect you and, if so, when?

Firstly, determine what your Total Superannuation Balance (TSB) will be at the end of the year ending 30 June 2026 as this will decide if you are liable to have taxable fund earnings under proposed Division 296.

Those individuals with aggregate TSB across all their superannuation accounts above $3 million will be impacted. Note, individuals in defined benefit schemes, employer-sponsored pensions, will be allowed to defer Division 296 liability until retirement (interest applicable annually).

The ATO will assess your eligibility to pay Division 296 tax when you lodge your tax return for the financial year. If you are liable to pay, a notice will be issued by the ATO. You may be

able to pay with a release of money from your superannuation fund.

How Division 296 will be calculated?

If your aggregate TSB across all your superannuation accounts will be above $3 million on 30 June 2026, then you will have reached the proposed threshold for the application of Division 296.

Following is the formula for determining the amount of tax for which you could be liable:

Earnings on your TSB will be calculated as:

Earnings = (Closing Balance – Opening Balance) – Net Contributions (consider both Contributions and Withdrawals)

The proportion above the $3 million threshold will be calculated as:

Proportion = (Closing Balance - $3 million) / Closing Balance

And the taxable earnings will be calculated as:

Taxable Earnings = Earnings x Proportion

Finally, Tax will be calculated as:

Tax = 15% x Taxable Earnings

Note, losses may be carried forward to offset future Division 296 liabilities but may not be carried backward.

What to do NOW – NEXT STEPS

Many high net-worth individuals may want to consider planning strategies to reduce exposure to or mitigate the impact of Division 296, however consider deferring reactive restructuring at the risk of reducing long-term superannuation benefits.

Contact YML Chartered Accountants TODAY about strategic planning to manage projected balances of your superannuation accounts in anticipation of Division 296 being brought into law before financial year end 2026.

How can YML help?


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

Business Insurance: What You May Be Overlooking

Here are five types of business insurance worth having on your radar, that could provide more comprehensive cover:

      1. Cyber Liability Insurance

Cyber-attacks aren’t just a big business problem. In fact, small and medium-sized businesses are being hit the hardest. According to the Australian Signals Directorate, over 87,000 cybercrime reports were made in 2024, with small businesses making up a large portion of the victims. The average cost of a single cyber incident for a small business? More than $49,000.

Whether you’re storing customer information on a laptop or in the cloud, using an EFTPOS machine to collect payments, sending emails to vendors, or simply updating your website, you could be vulnerable to a cyber-attack. Cyber Liability insurance can cover the cost of responding to a data breach, recovering compromised systems, and notifying affected customers. It also helps with crisis management and legal expenses if client data is exposed or stolen.

      2. IT Liability insurance

Tech professionals operate in high-stakes environments. One coding error, outage, or lost file can lead to serious consequences for your clients, and potentially legal action for you.

IT Liability insurance is designed with Information Technology professionals in mind. It combines the protection of Professional Indemnity insurance and Public Liability insurance to provide cover if something were to go wrong with the IT advice, services or even products you provide to your clients.

      3. Management Liability insurance

Being at the helm of a business means taking on a fair share of risk and legal responsibilities, especially when you're managing staff, finances or company decisions. Even with the best intentions, things can go wrong. One internal complaint or regulatory investigation could trigger a costly legal process.

Management Liability insurance is designed to protect business owners and company directors from legal claims tied to the management of the business. That may include incidents like unfair dismissal, discrimination or harassment claims, and even allegations of financial mismanagement.

      4. Tax Audit insurance

Even if your books are in perfect order, an audit from the ATO can still land on your desk. And when it does, responding properly takes time, expertise, and money.

Tax Audit insurance can be included in your Business Insurance Pack. It helps cover the professional fees that come with handling an audit. That includes costs for hiring an accountant, tax agent or other related professionals. This type of cover is useful for any business that wants to meet ATO requirements without taking a significant financial hit for it.

      5. Statutory Liability insurance

Regulations are a part of doing business in Australia. Whether it's workplace safety, employee rights, or industry-specific rules, it's important to stay up-to-date and compliant. But mistakes can happen.

Statutory Liability insurance can also be added to your Business Insurance Pack.  It covers investigative costs and penalties that come from unintentional breaches of government regulations. This could include breaches in legislation, or missed steps in licensing obligations.

This policy is especially useful for businesses in heavily regulated industries. With this cover in place, you're not left footing the bill if an honest mistake turns into a costly legal problem.

Get the cover you need, without the hassle

If your current cover is limited to just Public Liability and Professional Indemnity insurance, now’s a great time to explore your options. BizCover helps you compare multiple insurance options from leading Australian insurers, choose a policy that fits your business needs, and buy your cover in minutes.

No forms. No phone calls. Just easy, affordable cover trusted by over 260,000 small businesses across Australia.

Ready to protect your business properly? Head to BizCover and sort it all out in just a few clicks.

 

This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.

© 2025 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769

How can YML help?

Talk to our trusted advisors today to see how YML Group can assist you with your insurance needs through BizCover. For more information, view our website and contact us on (02) 8383 4400 or by using our Contact Us page on our website.

Reminder: Additional Tax on Concessional Superannuation Contributions

What is Division 293?

First introduced during the 2017/18 financial year, Division 293 is a taxation rule specifying a 15% tax rate on concessional superannuation contributions, generally, but not limited to, affecting high-income earners in Australia.

Division 293 reduces the tax concession on superannuation contributions for people with combined income and concessional contributions exceeding a threshold of $250,000 in a financial year. The aim of this rule is fairer treatment of tax on concessional contributions, meaning that people with higher incomes do not benefit disproportionately.

Will Division 293 affect you?

Firstly, it’s important to know what counts as income and contributions which is what the ATO will look at to determine if you are liable to pay Division 293 tax on your concessional superannuation contributions.

Income includes:

Concessional (before-tax) contributions include:

If your total combined income and concessional contributions exceed $250,000 in a financial year, you have reached the specified threshold for the application of Division 293.

Division 293 tax is calculated at 15% on whichever is the lesser of:

The ATO will assess your eligibility to pay Division 293 tax when you lodge your tax return for the financial year. If you are liable to pay, a notice will be issued by the ATO. You may be able to pay with a release of money from your superannuation fund.

Next Steps

Contact YML Chartered Accountants about bringing forward deductions, deferring bonuses, utilising non-concessional (after-tax) contributions and using a family tax, among other ways to manage the timing of your income.

How can YML help?

Talk to our YML Chartered Accountants today to see how YML Group can assist you with your ATO Division 293 obligations. 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 Contribution is NOW 12%

Effective 1 July 2025, the final increment in a series of planned increases to the superannuation guarantee contribution (SGC), to be made by the Australian government, requires that employers contribute 12% of an employee’s ordinary time earnings to an employee’s superannuation fund.

The increase is 0.5% on last financial year’s SGC rate of 11.5% and is aimed at enhancing retirement savings of Australia’s workforce. This increase applies to all payments made on or after this date, regardless of when the work was performed.

Setting aside additional remuneration funds will be necessary from now to meet new payment obligations. Using Single Touch Payroll (STP) software connected to the ATO will ensure that your business generates timely and accurate reports for the ATO.

Navigating the SGC Rate Change for Employers

To navigate these changes and maintain compliance, YML Business Services offers their virtual bookkeeping services. We offer remote management of your business’s financial records using cloud-based accounting software. We provide a high qualified, specially trained bookkeeper – experts in Australian superannuation and taxation law – to partner with your business to help you manage both STP and your SGC obligations.

By leveraging YML’s bookkeeping services, you can reduce your administrative overhead, provide precisely calculated and punctually paid employer superannuation contributions, thereby allowing you to focus more on strategic growth initiatives for your business.

Updating your payroll system to remain compliant is essential to your ability to adhere to SGC reporting and payment requirements.

If you are late paying your SGC amount, then notify the ATO of any late SGC payments via the ATO’s process of lodging a Superannuation Guarantee Charge Statement within 28 days of the quarterly due date and pay the Superannuation Guarantee Charge which is made up of

Next Steps

The SGC change will affect businesses differently, dependent upon the nature of the workforce within an organisation, so reach out to YML Business Services TODAY.

How can YML help?

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

A simple insurance solution for busy business owners

You've got a business to run, and that comes with a long to-do list. Business insurance shouldn’t be another time-consuming chore. The right policy should give you peace of mind, not more headaches.

If you're ready to skip the hassle and find cover that is easy, reliable and tailored to fit your business, this one's for you.

Why do you need business insurance?

Every business deal with risks, whether it's client injuries on your office premises, mistakes in your professional advice, or cyber-attacks just to name a few. Business insurance is designed to protect your business from the financial aftermath, including cover for expenses and legal costs related to such unexpected events.

Without business insurance, one incident could set your business back months, or more. With it, you can help protect your finances, your reputation, and the trust you’ve worked hard to build with your clients.

Here are some of the most common types of business insurance:

The problem is how business insurance is traditionally purchased

Business insurance has a reputation for being complicated. You're filling out endless forms, trying to make sense of confusing policies, and chasing quote comparisons that never arrive on time. It’s slow, frustrating, and frankly, outdated.

For time-poor business owners, this can lead to two outcomes: Either sticking with a policy that may be no longer right, or giving up altogether. But neither options will protect your business if something goes wrong.

That's where BizCover comes in

The YML Group has partnered with BizCover, Austalia's leading online insurance provider, to bring our clients easy, affordable insurance options from leading Australian insurers like QBE, Vero, Dual and Chubb.

Instead of spending hours calling different providers or filling out forms, you can jump online, compare multiple quotes for multiple products instantly and secure your cover without any paperwork necessary. It’s fast, easy, and designed for business owners who don’t have time to waste.

Protect your business with confidence

Insurance shouldn’t feel like a chore. With BizCover, you can quote, compare and buy the right policies for your business all in one place. No forms, no phone calls, no fuss. They even offer automatic renewals, so you are worry-free when it comes to insurance. Ready to protect your business properly? Head to BizCover and sort it all out in just a few clicks.

This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.

© 2025 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769

How can YML help?

Talk to our trusted advisors today to see how YML Group can assist you with your insurance needs through BizCover, view our website and contact us on (02) 8383 4400 or by using our Contact Us page on our website.

ATO gets tough on BAS Non-compliance – Is your business at risk?

In 2025 the Australian Taxation Office (ATO) is taking a tougher stance on non-compliant businesses that find it hard to stay on track with their Business Activity Statement (BAS) reporting. Since 1 April 2025 the ATO has mandated that thousands of slack businesses be transitioned to monthly, instead of quarterly, BAS lodgments.

Referring to the ATO’s ‘Getting it Right’ campaign, ATO Deputy Commissioner Will Day has said: ‘If you’re a small business who continues to deliberately disregard your obligations, you can expect the ATO to move you to more frequent GST reporting’.

If you find your business is repeatedly late lodging its quarterly BAS, you are at risk of being moved by the ATO to monthly BAS reporting. Moving from quarterly lodgment means more frequent – reporting and payment – of GST, PAYG withholding and other taxes, making it a bigger compliance burden for your business.

YML’s own virtual accounting service, a team of dedicated, Australian-trained professionals who partner with you, offers help that’s essential to ensuring you meet your ATO obligations. YML’s virtual accounting service can make a transition to monthly reporting smooth and stress-free OR help you to stay on track with quarterly reporting and avoid costly mistakes.

ATO’s ‘Getting it Right’ Campaign

Small businesses that consistently pay GST late or not in full, that fail to lodge their BAS timely and error-free will be notified by the ATO about changing from quarterly to monthly BAS reporting. The ATO aims to support small businesses by providing a more structured approach to addressing unmet taxation obligations through smaller, more manageable payments which might be easter to manage than larger, quarterly amounts.

However, this transition will lead to an increased administrative workload, which requires:

making choosing YML’s bookkeeping service an essential tool in your business’s financial armoury. To avoid your business slipping out of line, contact YML Business Services NOW.

How can YML help?

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

YML Finance can help you borrow to pay your ATO Debt

If you have an ATO debt, YML Finance can help you with a loan to pay off this debt.

You are most likely paying around 11% per annum on your ATO debt. Let us help you with a much cheaper loan with lower monthly repayments as it will be over a longer term.

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 a loan. 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.

Why use your Family Trust to invest in Property?

A family trust is a financial structure and for taxation purposes is its own entity. A family trust is specifically suited to tax flexibility – distribution of profits to lower-income earning beneficiaries (adult children and or spouse); long-term investment with capital gains taxation (CGT) advantages; and asset protection, making it a favourable vehicle to consider for property investment.

Family trusts are usually discretionary, meaning the trustee (typically, a parent) may choose how a trust’s income and assets are distributed among beneficiaries (typically, children of the trustee). A family trust may borrow money to purchase property to be held in the ‘name of the trust’ on behalf of the family group.

Advantages of an Australian Resident Family Trust for Property Investment

Asset Protection

Assets are legally owned by the trustee of a family trust, rather than by individual beneficiaries, and are therefore not considered part of personal estates.

If a beneficiary is sued, is liable to creditors or becomes bankrupt, assets held in a family trust are generally protected from litigation, creditors and or bankruptcy.

Taxation Optimisation (CGT)

A family trust’s distribution or ‘streaming’ of capital gains (profit) can reduce a family’s overall taxation obligations. To properly ‘stream’ income, a trust deed containing a trustee resolution – a record of a trustee’s distribution directives – is required.

If a property is held in a family trust for more than 12 months before being sold, the family trust may qualify for a 50% CGT discount. Capital gains (profit) from a property sale must be ‘streamed’ to individual beneficiaries for the 50% CGT discount to be applied.

A 50% CGT discount is not applicable after the sale of a property held by a company, hence the advantage of purchasing a property in a family trust.

Disadvantages of an Australian Resident Family Trust for Property Investment

No CGT Discount on Main Residence

A main residence property held in a family trust will be fully taxable, even if the trustee and or beneficiaries live in the property. There is no 50% CGT discount applicable when a main residence held in a family trust is sold. Thus, a family trust best serves its family group by being used for purchasing investment property.

No Land Tax Threshold

In NSW, family (discretionary) trusts are taxed at the highest land tax rate – they do not attract the tax-free threshold, unlike individual owners of property.

Foreign Beneficiaries attract NSW Land Tax Surcharge

If foreign beneficiaries are included in a NSW family trust, a 2% land tax surcharge on top of normal land tax rates might be applied to any property held in a family trust.

To avoid the 2% land tax surcharge, it is necessary to exclude foreign persons explicitly and irrevocably from the trust deed. It might be necessary to amend a trust deed before a property is acquired.

Revenue NSW requires specific wording about family trust beneficiaries in a trust deed. It is essential that the wording is clear about beneficiaries being either Australian citizens or foreign persons to avoid any misunderstanding by Revenue NSW, and to ensure that a family trust’s property does not attract the 2% land tax surcharge.

Setting up your Family Trust with YML Chartered Accountants

It is imperative that a family trust is set up correctly in NSW to satisfy Revenue NSW. YML Chartered Accountants, in collaboration with YML Legal, can advise you on the appropriate and relevant wording for the trust deed and ensure that it contains Revenue NSW-compliant wording.

A common Revenue NSW-specific mistake that you want to avoid is putting the wrong name on a property sale contract. The correct format for the name written on a property sale contact is “Trustee Name ATF Family Trust”, NOT your personal name.

YML Chartered Accountants, in collaboration with YML Legal, can advise you on amending your family trust deed and can review it to make certain of its compliance with Revenue NSW and the Australian Taxation Office.

BEFORE purchasing a property, it is most important that you contact YML so that we can advise you accordingly.

How can YML help?

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

Intentionally underpaying Employees is now a criminal Offence

A NEW criminal offence for intentionally underpaying employees in Australia was a change, commencing 1 January 2025, made to the Fair Work Legislation Amendment (Closing Loopholes) Act 2023. Employers found guilty could face substantial fines or even a custodial sentence.

Honest mistakes, assessed by the Australian Taxation Office (ATO), may be deemed exempt. Employers will ideally act in good faith to ensure payroll errors, if any, are accidental, are corrected quickly and are well-documented to show no intent to underpay.

YML Business Services offers a team of dedicated and trained professionals who, using cloud-based technology to work seamlessly, partner with employers to help businesses streamline and manage their day-to-day accounting activities, including payroll.

For many small to medium Australian businesses (SMEs) accessing highly skilled accounting professionals is made easy by adopting virtual bookkeeping services to monitor their business’s financial health.

Using your company’s established internal resources alongside external specialists – namely outsourcing and co-sourcing – to manage your payroll functions and mitigate the risk of underpaying your employees could be a wise decision for your business considering the recent change to the Fair Work Australia legislation.

YML Business Services can provide expert, specialised know-how to assist you with:

How can you be a first-rate employer?

By adopting virtual bookkeeping services through YML Business Services, you can gain and maintain better control of your payroll and other financial operations, as well as ensure your business is abiding by the latest Fair Work Australia legislative changes.

How can YML help?

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

How to boost your spouse’s balance and make the most of contribution caps

Why boost your spouse’s balance?

  1. Maximising the opportunity to contribute to super

The option to carry forward unused concessional contributions is restricted to those with a total super balance below $500,000 on 30 June of the prior financial year. If one spouse’s balance is coming close to the threshold and they are at risk of losing this opportunity, contribution splitting can be used to transfer funds out of their super balance.

Also, individuals with a total super balance above the general transfer balance cap (currently $1.9 million) cannot add further non-concessional contributions to super. Spouse contribution splitting and/or withdrawals after retirement can reduce the balance of a partner that would otherwise exceed this limit, so they can retain the option to make non-concessional contributions.

  1. Equalising balances

At retirement, the transfer balance cap places a per-person limit on the amount that can be transferred into the tax-free retirement phase. Equalising balances can maximise the total a couple can transfer if only one of them would otherwise have a balance above the cap (currently $1.9 million).

Example – maximising tax-free super

Terry and Gillian are currently aged 50, and planning retirement at 60. Terry’s balance is much lower than Gillian’s because he took some time out of the workforce recovering from a serious injury and now works part time earning a lower wage.

Based on projections if they take no action, Gillian’s expected balance at retirement is $2.5 million and Terry’s is $900,000 (in today’s dollars).

Their financial planner recommends they employ a range of strategies to reduce the gap in their balances. If they put these in place, their expected retirement balances are $1.8 million for Gillian and $1.6 million for Terry.

This will ensure that both partners can transfer their whole balances into the retirement phase at age 60 and enjoy tax-free investment earnings.

Without action, Gillian would have $600,000 in super at retirement that she could not transfer to the retirement phase. She could either retain this amount in a super accumulation account (where earnings would be taxed at up to 15%) or cash the amount out of super where earnings would be subject to income tax. She may also consider the option of cashing a lump sum to contribute to Terry’s super, but would be limited by the non-concessional contribution cap.

  1. Enhancing Age Pension

When one partner is older than the other, retaining super in the account of the younger spouse can enhance Age Pension entitlements while the younger spouse is under the Age Pension age (currently 67).

Using contribution splitting and/or cashing benefits from the older spouse’s account to contribute to their partner’s super reduces the amount counted in Centrelink’s income and asset tests because the superannuation balance of a person under the pension age is not assessable.

With a lower amount being assessed in means tests, the older partner may receive a higher rate of Age pension or qualify for a pension that would not otherwise be payable.

Split your super contributions

One way to boost your spouse’s super account balance is to split the concessional contributions made into your own super account and transfer some of them into your spouse’s account.

This can be a good way to equalise your super account balances if your spouse has less super than you, or if they are on a lower income and receiving lower SG contributions. It may also be of benefit if your spouse is younger than you and transferring your contributions into their account will help you qualify for higher Age Pension payments.

Contribution splitting is different from splitting or dividing your super in the case of a relationship breakdown or divorce. The division of super (or payment split) in these situations is part of a financial agreement reached under the Family Law rules.

You can split contributions where you are any age, but your spouse receiving those split contributions needs to be less than their preservation age, or age between preservation age and 65 and not yet retired. So that rule is just to stop us splitting contributions to a spouse who can then immediately withdraw the money.

Split super contributions remain preserved until the receiving spouse reaches their preservation age.

Splitting your concessional (before-tax) contributions with your spouse does not reduce the amount counted towards your annual concessional contributions cap ($30,000 in 2024-25).

Your super fund still reports all the super contributions made into your account during a financial year, including any contributions later transferred to your spouse.

What super contributions can be split?

You can ask your super fund to transfer up to 85% of your taxed splittable contributions from a particular financial year into your spouse’s super account.

Taxed splittable contributions are generally any employer contributions (including salary-sacrifice contributions) and any personal super contributions you have claimed as a tax deduction in your income tax return.

Need to know

The maximum amount of taxed splittable contributions you can split with your spouse in a particular financial year is limited to your concessional contributions cap for that year ($30,000 in 2024-25).

You can only split the lesser of 85% of your concessional contributions for that year, or the amount of your concessional contributions cap for that year.

Contributions that cannot be split with your spouse generally include:

How can YML help?

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