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Pursuit Insights offers updates and snippets from our industry, If you should wish to discuss anything further, please do not hesitate to contact our office

2016 Federal Budget

2016 Federal Budget

What does it mean to you?

As most people will be aware Treasurer Scott Morrison handed down his first Federal Budget - the Coalition Government's third, on Tuesday night. 

The winners appeared to be low and middle income earners, unemployed youth and small business, and there are significant changes to superannuation.

Below is a brief summary of main points from the Budget. Should you have any questions or are concerned about how the proposed changes may impact upon you please call your adviser.

Important to Note: These changes are proposals only and may or may not be made law.

Summary

  • A lifetime cap on non-concessional (after-tax) superannuation contributions of $500,000 will apply from 7.30pm on 3 May 2016.
  • The income tax threshold at which the 37% tax applies will increase to $87,000 pa on 1 July 2016, from the current $80,000 pa.
  • The tax rate that applies to small business companies will reduce to 27.5% for businesses with a turnover up to $10 million in 2016/17. Further tax concessions will apply in future financial years.

A range of superannuation measures will also apply from 1 July 2017.

  • The annual cap on concessional (pre-tax) super contributions will reduce to $25,000, regardless of age.
  • Concessional super contributions may exceed the annual cap if certain conditions are met.
  • Those aged between 65 and 74 will be able to make super contributions regardless of whether they work or not.
  • Tax deductions will be able to be claimed for personal contributions regardless of employment status.
  • A lifetime limit of $1.6m will be placed on the amount of superannuation that can be transferred to start pensions.
  • Earnings on investments held in 'transition to retirement' pensions will be taxed at 15% (currently 0%).

 



 

Share Market Update


Australian Share Market Update

The 2015 calendar year was a challenging year for the Australian Share market.

Early in 2015 the market rose sharply with the Australian All Ordinaries Index increasing by more than 10% during the first quarter. Then it was almost in free fall for the rest of the year, ending the year at just under 1% lower than it started the year.

The numbers we are quoting are exclusive of dividends paid by the companies, they represent the movement in prices only. The average market dividend is said to be around 5% so this means that the average Australian share investor return for the 2015 calendar year is 4% after the negative price movement. This is a better return than bank interest but certainly not in the realms of 10% which is the historical long term average share market return.

At Pursuit Advisers we are focussed on income and for share investors this means dividends. We are pleased that our portfolios average dividend returns closer to 6.5% and therefore the investment philosophy that we use has returned 1.5% more to our clients than market averages in 2015 - via the increase in dividends received.

The 2016 year has not started well with prices heading down from the open and we see volatility continuing for some time. Dividends and an income focussed investment philosophy are more important than ever and this is our main focus heading into the rest of 2016. This is not another Global Financial Crisis the factors effecting the market are different and the risks are different.

Investors need to hold their shares, and their nerves, it is not time to sell shares now.


Tech Update- October 2015

Rental Property Deductions

Initial Repairs
Any repairs under taken that were for damages done when the property was first purchased are not immediately deductible, these instead are capitalised and written off over the useful life.

Loan Deductibility – Offset Account
The interest on your loan is only deductible to the extent that it relates to your rental property, if you pay down your loan quicker and then re-draw to go on a holiday the redraw amount will then be a private portion of that loan.
This is where an offset account against your loan would be useful as it would allow interest savings by having excess funds in an offset account but would not affect the deductibility if you choose to use the funds for items other than your property.

Depreciation & Capital Works
These are claims for items that are capital in nature, we can claim depreciation on any new fittings or furnishings that you are required to install, e.g fitting a new air conditioner.
You are also able to have a quantity surveyor prepare a report for your property which will enable depreciation and capital works deduction claims against most items of your property.
The cost of obtaining a depreciation report is also fully deductible against your rental income. Please contact our office if you have a rental property and have not had a depreciation report completed. 

Other Deductible Expenses

  • Pest Control                                   
  • Accounting Fees
  • Agent Commission                       
  • Cleaning     
  • Garden Maintenance
  • Water Rates                          
  • Interest
  • Travel Body                           
  • Corporate Fees                              
  • Insurance
  • Council Rates 
  • Repairs                     

Workcover Rateable Remuneration       
This is required to be lodged every year, this determines what your actual remuneration paid was for the financial year and workcover will then do an adjustment against the estimated remuneration.
The following items make up the remuneration.

  • Gross salaries and wages, including annual leave and long service leave paid
  • Allowances, bonuses and commissions paid
  • Paid parental leave – when paid by the employer (Government funded is not rateable)
    Make up pay or back pay
  • Directors fees and all remuneration paid to directors 
  • Fees for work completed by a worker or deemed worker 
  • Net payments to contractors that are paid for labour only services or who are workers or supply workers 
  • Fringe benefits provided to employees 
  • Superannuation paid, including amounts above the superannuation guarantee amount



New Lows

New Lows

An update on the Australian Share market

The Australian Share market has tested new lows in the last few days. This can be a testing time for those that have money invested in the share market, there is nothing more worrying than when you are seeing more and more bad news.

Please be reassured that the Financial Planning team at Pursuit Advisers are constantly monitoring the market and are abreast of all issues. If you are a client of the Financial Planning team you will be contacted by your Adviser if there are major issues in your portfolio that need immediate attention.
However, if you believe that you need to talk to the team as a matter of priority for some peace of mind then please call our office.

If you are not a client of the Financial Planning team and you need advice please call our office and introduce yourself to a Financial Planning team member.We are always here to help.



Managing your electronic Activity Statements

Managing your electronic Activity Statements

The ATO is continuing to cut back on sending out paper activity statements in a bid to move everyone from paper to electronic. The following summarises the options available to be able to self-manage your activity statements

1. ATO Business Portal
You will need to register for an AUSkey via https://abr.gov.au/AUSkey/Registering-for-AUSkey/ and follow the steps to install.

Once you have an AUSkey the business portal can be used to view and lodge your activity statements, as well as manage your details and dealings with the ATO, when setting up be sure to provide an email address to be notified when a new activity statement is available.
 
2. Standard Business Reporting (SBR) Software
SBR integrates with the business portal and your AUSkey to make interactions with the ATO more user friendly. There are a number of different SBR software packages developed to make electronic communications more streamlined, with the ability to integrate with business accounting software packages.
 
The Government push towards SBR software means that there is now a large number of options to make lodging activity statements, reporting on payroll tax, PAYG annual summaries, TFN- declarations and ASIC forms easy and seamless for businesses.
 
3.MyGov Portal
The MyGov portal can be linked to the ATO to manage activity statements. The MyGov portal is your one stop shop for all interaction with Australian Government agencies from Medicare, Centrelink, Human Services, Child Support and now you can also link to the ATO.
 
You will need to 'add a service' and enter your TFN and your ABN to link it to the ATO. You can also change your settings to be notified by SMS or email when you have a new message or a new activity statement.
 
4.Management via your registered Tax Agent
Pursuit Advisers will receive your activity statement notifications and we will communicate with you to ensure all statements are lodged on time. Having a Tax Agent manage your activity statements provides ABN holders with less stress at lodgement time as well as the option of extended lodgement dates.


If you would like assistance setting up your preferred method of electronically managing your activity statements, or if you would like us to manage them for you, please give us a call to discuss. 



 

Greece Votes 'No'

Greece votes 'No'

An update on Greece

There is much uncertainty based on the 'no' vote in the recent Greek referendum. 
We see this as a short term obstacle to the Global and Australian share markets. There will be a little instability but long term the markets should see themselves clear of this. Contagion in the Euro-zone is not likely as the economies and the EU are in much better shape than last time Greece were in financial crisis. 

In the short term we will continue to see volatility as it is the uncertainty of the final outcome that creates nervous times on share markets. We need to sit back at present and wait to see what happens next, whether Greece goes it alone, or the EU come back with another offer?

In the meantime Australian share investments are paying good solid dividend income which is important during these volatile times.


 

"seen as a very important part of our organisations future. The level of service is well above what would be considered the norm"

Dale Sumner - General Manager of Lakes Entrance Fishermens Co-op & Leftrade Limited

"From the front desk to the director is outstanding, I have replies to my emails within the same day to answer any question. My Wife and I have been able to take our business to the next level"

Ben and Julie Whiteley

"Both my wife and I have great confidence in Cameron whose integrity and clear thinking about our financial affairs we greatly respect and I would whole heartedly recommend him and Pursuit Advisers to anyone seeking similar financial advice"

Malcolm & Lorraine Baxter

"They provide us with well-researched financial and business advice, take care of all our tax responsibilities and financial needs, and even check in from time to time to see how we’re going"

Jessie Ballantyne- Director of The Grants Hub

"Business has grown immensely which is a testament to his effectiveness, guidance and good common sense approach"

Robert Radford- R. Radford & Sons Pty Ltd

"They have taken the time to get to know us as a business, and go above and beyond in helping us grow."

Jessie Ballantyne - The Grants Hub

"The high standard of professional accounting services by Pursuit Advisers has been crucial in the establishment of a robust financial organisation to meet future opportunities and challenges in our business."

Bill Baker – Lyrebird Villages