November 2019 Newsletter

Please click on the following link to view our monthly accounting/tax newsletter for November 2019:

November – 2019

We would like to highlight the following articles in this month’s newsletter:-

Downsizer super contributions – The downsizer measure, which commenced on 1 July 2018, allows older Australians to contribute up to $300,000 ($600,000 per couple) from the sale of their home into superannuation. These contributions don’t count towards your non-concessional contributions cap and can be made even if your total superannuation balance exceeds $1.6 million. The eligibility rules are as follows:

• you are 65 years old or older at the time you make the downsizer contribution;
• you, your spouse or a former spouse must have owned the property for the 10 years prior to the sale;
• the proceeds from sale is either exempt or partially exempt from CGT under the main residence exemption;
• your home is in Australia and is not a caravan, houseboat or other mobile home;
• you make your downsizer contribution within 90 days of receiving the proceeds of sale; and
• you have not previously made a downsizer contribution to your super from the sale of another home.

Utilising business tax losses – If you’re a sole trader or individual in a partnership, you may be able to use the tax losses incurred by your business to offset other assessable income you earn personally. For your loss to offset your personal income you must meet the two requirements of the non-commercial loss rules. First, your adjusted taxable income must be less than $250,000. Second, you must pass one of the following four tests:

1. your assessable income from your business activity is at least $20,000;
2. your business has made a tax profit in three out of the past five years (including the current year);
3. you use real estate valued at $500,000 or more in your business on a continuing basis; or
4. the value of “other assets” (excluding cars, motorcycles, similar vehicles and real estate) you use in your business on a continuing basis is at least $100,000.

If you don’t pass any of these tests (or fail the $250,000 income requirement) you must defer the loss.

Please do not hesitate to contact us if you have any queries in relation to your tax and accounting matters.