September 2021 Newsletter

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

September – 2021

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

Rental property pitfalls

The ATO is closely monitoring claims in relation to rental properties. The ATO notes that over 70% of the 2019-2020 returns selected needed adjustments.

A major area of concern includes claims for interest charges on personal loans. For example, if you take out a loan to buy a rental property and rent it out at market rates, the interest on the loan is deductible. However, if you redraw money from that mortgage for personal use (eg to buy a car or pay off the mortgage of the house you are living in etc) then you cannot claim interest on that part of the loan.

Taxpayers should also be careful when claiming deductions for capital works. While the cost of repairs for wear and tear to the property are immediately deductible if they’re replacing or fixing an existing item (eg a broken toilet or showerhead), the cost of upgrading the property or areas of the property (eg a kitchen or bathroom renovation) would be considered capital works and any deduction needs to be spread over a number of years.

Super changes for the 2021 financial year

The government’s long-slated “flexibility in superannuation” legislation is finally law. This means from 1 July 2021, individuals aged 65 and 66 can now access the bring-forward arrangement in relation to non-concessional super contributions.

For the 2022 income year, the non-concessional contributions cap is $110,000, which means that individuals aged 65 and 66 can access a cap of up to $330,000 under the bring forward arrangement.

Recontributions of COVID-19 early released super

With the fast-moving COVID-19 situation last year, many individuals lamenting a lack of financial support from the government early on elected to have $10,000 released from their super in the 2019-2020 financial year and another $10,000 released between the period 1 July and 31 December 2020.

From 1 July 2021, those individuals who received a COVID-19 super early release amount can recontribute to their super up to the amount they released, and those recontributions will not count towards their non-concessional contributions cap.

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