FINNESS ADVISORY in Perth, Western Australia | Tax preparation service

FINNESS ADVISORY

Locality: Perth, Western Australia

Phone: +61 449 083 740

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25.01.2022 DID YOU FORGET TO INCLUDE YOUR OVERSEAS RENTAL PROPERTY IN YOUR AUSTRALIAN TAX RETURN? I have had many discussions with people who have permanently moved to Australia and it didnt even cross their mind to declare their overseas property rental in their Australian tax return. There seems to be many reasons for this but the main three reasons I have encountered are as follows:... 1. Complexity its all too hard - I will just leave it out - no one will be any the wiser as the money received is in an overseas bank account. 2. Naivety They assume that because its not earning income in Australia and they already pay tax in the country where the property is situated, why would they pay tax here also? 3. Loss making The costs are more than the income so there should be no tax consequences, right? Wrong. When I have this conversation with my clients who are tax resident in Australia, some of them are very surprised to hear that: By law it must always be included in your tax return; and in a lot of cases, including it actually saves them money!! In my next post my aim will be to clear up some of this confusion.

23.01.2022 Hey everyone Im super excited to announce my website is now liveCheck it out here: https://finnessadvisory.com.au. Its my first website and has been a steep learning curve. There are a couple of minor issues left to iron out but Im really happy with the final version. ... Thanks to everyone who has supported me in this journey. I truly appreciate it. Have a browse and let me know what you think

21.01.2022 How would you like a tax-free investment? But wait there’s more, not only can you get a tax-free investment but you can earn an income and even contribute $300,000 each to superannuation tax free, no matter what your age! Sounds too good to be true right?!... Your principal residence is capital gains tax free Well, you probably already know that if you sell your own home, the profit, or capital gain, is tax free. A lot of people start growing their wealth from buying a home, renovating it and selling it to trade up. This is a common strategy by those with a little ingenuity, ambition and plenty of energy. Joey bought a house in Sydney for $250k in 1995 and did a bit of work to it over the years. In 2020 he sold it for $2m. He even earned an income off it for about 5 years. All tax free in 2020! Things get complicated now when you get a job overseas Under section 118 of the Income Tax Assessment Act - I know you’ve probably read every exciting fun filled page so I’ll be brief you can live outside of your principal residence for up to 6 years, earn an income from it and potentially sell it tax free. It’s called the 6-year rule! Well, at least everyone used to be able to. So now what do you do if you get an overseas posting? You better be careful, because if you lose your Australian tax residency and sell, you could be up for a big tax hit!! This change of law happened in December 2019 but of course got very little air time! You can knock $300,000 into super EACH!!! Tax free when you retire to boost your super! As of July 2018, you can downsize your house if you are in your golden years and contribute up to $300,000 into super or $600,000 ($300,000 each) as a couple. What a bonanza! But only 15,000 have taken this up in the last 2 years so let’s not keep it a secret! Need Help? If you or someone you know needs help, don’t keep me a secret I’d love to help. Good advice can boost your assets by hundreds of thousands of dollars and bad advice can be catastrophic. So, feel free to drop me a line by clicking below. Thanks for reading! https://finnessadvisory.com.au/contact/

21.01.2022 COMING TO AUSTRALIA I have received numerous queries regarding Australian Capital Gains Tax (CGT) matters from clients leaving or entering Australia (i.e. acquiring or losing Australian residency). This is an important topic because when it comes to selling assets, the $$s can be significant and therefore so can the CGT exposure. At its simplest, CGT is tax you potentially pay on a profit you make when you dispose of an asset. The tax rate is based on the Robin Hood prin...Continue reading

20.01.2022 YOUR OVERSEAS RENTAL PROPERTY - A TAX CASE STUDY In my last post I outlined some of the reasons I have encountered why people FORGET to include their overseas rental income in their Australian tax return. This week I focus on a case study where Mike was MISSING OUT in about $4,000 in tax refunds each year because he was not aware of how the tax law worked in this area. THE BAD NEWS FIRST ...Continue reading

19.01.2022 WORKING FROM HOME? WHAT TAX DEDUCTIONS CAN I GET? As we begin to responsibly self-isolate and practice social distancing during this uncertain time, there are many people managing work commitments from home. I thought it would be good idea to briefly look at what tax deductions might be available to Australian residents as we get things done from the cosy confines of our abode. ...Continue reading

18.01.2022 A fantastic opportunity to join a great team and business!! Please share with anyone you know who would fit this role. Thanks.

18.01.2022 JOBKEEPER ALERT: A quick reminder to all business owners that the monthly declaration for July is now available. You can claim the July Jobkeeper from today. Get in early to get last months payment as soon as possible. Also, for this month, please be careful as August has "THREE fortnights" for Jobkeeper. You will need to ensure you have paid your eligible staff the equivalent minimum for August.

17.01.2022 Sometimes in business you have to make the tough calls! Make sure you have a great accountant to help you through the difficult times and prosper in the good times. Have a nice weekend everyone

16.01.2022 I’m leaving Australia. Should I say goodbye to the tax office? Your bag is packed and it’s time to say goodbye to the many friends you have made over the years. You don’t know if you’ll be back and it’s an emotional day. Whatever the reasons for your departure, one thing is probably obvious saying goodbye to the tax office is not on top of your to do list! ... Maybe it should be to ensure you don’t squander any tax opportunities. Check out my latest blog here: https://finnessadvisory.com.au/top-5-tax-considerations-yo/ #businessaccountantperth #accountantperthsmallbusiness #accountantmelbourne #accountantsydney #accountantbrisbane

16.01.2022 BUSINESS TACTICAL RESPONSE PLAN PART 2 INTRODUCTION This is the second article in the series, where I briefly touch on some of the discussions I am having with my clients as we fight through this storm together....Continue reading

15.01.2022 LEAVING AUSTRALIA AND SELLING YOUR HOME DONT FORGET THE FOREIGN TAX ISSUES IF YOU RELOCATE. My 3rd and final post in the series. Last week I spoke about Siobhan, an Irish expat who was thinking about selling her Melbourne home (for a potential profit of $400,000) and relocating back to Ireland. ...Continue reading

14.01.2022 Top 5 Mistakes that can lead to a tax Audit and how to avoid them The Australian Taxation Office (ATO) have done a fantastic job during the pandemic administering the various stimulus packages. But let’s be honest, life is usually less stressful when you don’t hear from them. Sometimes the please explain letters can easily be resolved but let’s try to avoid them altogether. ...Continue reading

14.01.2022 BUSINESS TACTICAL RESPONSE PLAN - PART 1 OF 2 There is no doubt that we are in a period of unprecedented economic uncertainty. Everyone I speak to is worried, but I am truly seeing the best in people as we all lean on each other for support. Dont feel like you are on your own, please contact us and we will help you with some tactical plans for your business. We are helping clients work through this each day. Please reach out to me at [email protected] and tag a bus...Continue reading

12.01.2022 TAX DEDUCTION ON CARS LETS GET THE FACTS AND NOT JUST WHAT YOUR CAR DEALER TELLS YOU. This is normally the time of year when many retailers suddenly become an expert in tax deductions. You may be familiar with advertisements like - Dont delay. Get your new filing cabinet before 30 June, to claim it as a tax deduction! This year I have noticed that a lot of advertisements and various forums are making a lot of noise about the recent changes to the depreciation limit for...Continue reading

12.01.2022 Hey everyone I’m super excited to announce my website is now liveCheck it out here: https://finnessadvisory.com.au. It’s my first website and has been a steep learning curve. There are a couple of minor issues left to iron out but I’m really happy with the final version. ... Thanks to everyone who has supported me in this journey. I truly appreciate it. Have a browse and let me know what you think

10.01.2022 SELLING YOUR AUSTRALIAN HOME TAX CHANGES ARE COMING THAT COULD HAVE A HUGE FINANCIAL IMPACT The Australian tax perspective In general, under the current tax rules, a taxpayer can sell their private home, make a profit, and this might all be tax-free. This could apply even if you rented out the property during the period of ownership, once it was your private home at some point in time. There are some conditions that apply and need to be assessed based on your circumstances... but if you qualify, it can be a very generous concession. The government have been causing quite a stir in recent years since they announced their intention to change these rules. The changes will affect foreign residents for tax purposes as they will no longer be entitled to claim the tax concession when they sell property in Australia which was once their home unless a specific life event occurs. This change has been on their agenda for some time, despite extensive lobbying from expat groups and tax experts. Sadly, it has all fallen on deaf ears and this has now become law! What does all this mean? Individuals who could have previously sold their home tax-free but are non-resident for Australian tax purposes when they sell, will no longer be entitled to the concession. They will be taxed in full on any profit made on the sale. There will be no apportionment for the period when the individual was tax resident in Australia which in my view would have been a fairer approach. In other words, if you are non-tax resident at the time of sale, the tax will apply in full. The tax rate for non-residents currently starts at 32.5% and goes to 45%! It is worth noting that the relevant rules for assessing whether someone is non-resident for tax purposes and/or non-resident for visa purposes are different. For example, there could be an individual who was born in Australia, bought and lived in an Australian home for 20 years but then moved abroad for a period of time. Depending on the circumstances, this individual could be regarded as non-resident for Australian tax purposes despite being an Australian citizen. KEY TAKEAWAY: This could potentially have a substantial impact on the after-sale proceeds of your property and it is paramount that you plan ahead now if a sale is imminent. Next week I will take you through a brief case study of my client Siobhan who did just that!

08.01.2022 A CASE STUDY ON THE RECENT TAX CHANGES OF SELLING YOUR AUSTRALIAN HOME. Last week I briefly discussed the changes that the government made on the tax exemption that applies if you sell your home in Australia. If you have a property in Australia and you believe you may leave Australia in the near future, I would encourage you to read my last post. It is important to keep up-to-date with any tax changes and also engage a proactive tax advisor that will educate and keep you in ...the loop on what changes could potentially impact you now and in the future. This way you can plan and make informed decisions. My client Siobhan was able to do just that: CASE STUDY Siobhan bought a property in Melbourne for about $400,000 when she first immigrated to Australia ten years ago. The property is worth about twice that today. Well done Siobhan! She had lived in the home for some of the period of ownership but did also rent it out for four years as she worked and travelled around Australia. Siobhan was getting increasingly more home sick and left Australia for a period to be with her family. She wanted to reflect on her future and decide whether to remain with her family or return to Australia again. In addition to this life changing decision, she also did not know if she wanted to keep the house in Australia as an investment, or cash in on the big profit she was sitting on. During this time a friend told her that he read somewhere the Australian government were proposing to make tax changes relating to the sale of private homes and recommended that she speak to a tax advisor immediately. Following this referral, I did some research on Siobhans situation and confirmed that she did satisfy all the conditions to sell her home tax free in Australia at that time. The issue for Siobhan was that under the new tax rules if she became a foreign tax resident, she could potentially no longer be entitled to claim the tax-free concession. This could mean a tax liability of up to $160,000 (before any other tax concessions if applicable) based on the value of the property. Ouch! I worked closely with Siobhan outlining all the various options she could take to ensure if she did decide to sell, she would be entitled to claim the concession. This has made a massive impact on Siobhans life. There may be a lot of expats who could face huge tax liabilities on the sale of their property simply because they are unaware of these tax law changes. KEY TAKEAWAY: BE LIKE SIOBHAN. GET THE ADVICE EARLY AND BE INFORMED. THIS WILL EMPOWER YOU TO MAKE DECISIONS ON YOUR TERMS. In the next post I will talk about the potential foreign tax consequences we had to consider for Siobhan as a result of her selling her Australian home.

08.01.2022 LEAVING AUSTRALIA THE TAXMAN DOESNT LIKE GOODBYES In a previous post, I briefly covered some capital gains tax concepts when someone moves to Australia. This week I will briefly discuss what you should be aware of from a capital gains tax (CGT) perspective if you leave Australia and lose your tax residency status. INTRODUCTION...Continue reading

07.01.2022 Thanks for your kind words Ma Mooneys Kitchen. Its an absolute pleasure working with you all and your food is the best in Perth! It brings me back home every time!

06.01.2022 Australian Tax return lodgement deferral The ATO has announced that the following blanket deferrals will be put in place: Company 2018-2019 income tax returns are now due by 5 June 2020.... SMSF 2018-2019 annual returns are now due by 30 June 2020. 2018-2019 Income tax returns for individuals, partnerships and trusts can be lodged by the 5 June concessional due date, provided the taxpayers pay any liability by this date. If you need any assistance with the above or need clarification on the various government stimulus packages, please feel free to email me at [email protected] or call me on 0449 083 740.

04.01.2022 I have always tried to stick to what I am good at and passionate about, where ever possible. This in my view gives us the highest and best use of our time. Does your garden need attention? Hire a gardener (unless you love gardening). This leaves you time to focus on high value activities that are meaningful to you and over time with consistency, can generate the biggest impact in your life. Thank you for all the support you have given me. Have a great long weekend everyone!!

03.01.2022 Thank you for checking out our new facebook page. We are very excited to get this page up and running and our aim will be to provide some valuable content in all things business, finances and tax. My goal on this page will be to educate you on tips and traps in tax, business information, relevant topics at the time and to have discussions on anything I believe might add some value to you. Dont worry - I am confident we can have some fun along the way too.... It would mean the world to me if you could please like and share my page. Thank you. John

03.01.2022 CASH MANAGEMENT IN CHALLENGING TIMES Right now, we need to do everything we can to help the elderly, vulnerable and our community. The smallest contributions can make the biggest impact. LET ME HELP...Continue reading

01.01.2022 QUICK TIP FOR 2020: During the year 2020, it is very important that you write the full date on any documents. Otherwise the date could easily be changed! For example 04/08/20 could be changed to 04/08/2017. Only relevant to us for the 2020 year unless I am sharing this tip again in the next millennium