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Spry Roughley Articles

Transfer balance cap: ATO highlights admin issues

On 30 August 2018, ATO Assistant Commissioner Superannuation Tara McLachlan gave a speech on Administration issues under the transfer balance cap

at the Tax Institute Sixth National Superannuation Conference. She highlighted the following:  Read more…

Australian Small Business White Paper: tax reform a key

After more than 18 months of extensive research and consultation, the Institute of Public Accountants (IPA) and the IPA Deakin SME Research Centre have released the second edition of the Australian Small Business White Paper.  Read more…

ATO expects 200,000 to miss out on refunds by failing to lodge

The ATO expects that 200,000 individuals could miss out on a tax refund this year by failing to lodge a return.  Read more…

Black economy: electronic sales suppression tools now banned

Activities involving electronic sales suppression tools (ESST) and that relate to people or businesses with Australian tax obligations are now legally banned, effective from 4 October 2018. This is part of the measures under the recently passed Treasury Laws Amendment (Black Economy Taskforce Measures No 1) Bill 2018. People or entities may be liable for criminal and administrative penalties if they produce, supply, possess or use an ESST or knowingly assist others to do so.  Read more…

Super work test exemption for recent retiree contributions

The Government has released draft legislation and regulations to give effect to its 2018–2019 Federal Budget measure to provide a one-year exemption from the work test for superannuation contributions made by recent retirees aged 65–74 who have total superannuation balances less than $300,000. Currently, individuals aged 65–74 must work at least 40 hours in any 30-day period in the financial year in which the contributions are made (the work test) in order to make voluntary contributions.  Read more…

Bringing forward small business tax cuts by five years

Prime Minister Scott Morrison has announced that the Government will bring forward its planned tax cuts for small business by five years. He said the Government would introduce the necessary legislation in Parliament during mid-October 2018. Labor has indicated it will support the bring-forward of the tax cuts, thereby ensuring quick passage of the legislation through Parliament.  Read more…

Business tax rates and small business tax offset changes

The Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018 was introduced into and passed by the House of Representatives on 16 October 2018 and passed by the Senate on 18 October 2018. The Bill implements the proposal to accelerate reduction of the tax rate for base rate entities (ie corporate tax entities that derive no more than 80% of their income in passive forms and have an aggregated turnover of less than $50 million).  Read more…

Residential rental property travel expenses: ATO guidance

From 1 July 2017, non-business travel costs incurred by individuals, self managed super funds (SMSFs) and "private" trusts and partnerships in relation to residential rental properties are not deductible (s 26-31 of the Income Tax Assessment Act 1997). Such expenditure is also excluded from forming part of the cost base or reduced cost base of a CGT asset.  Read more…

Tax on compensation received for inappropriate advice

The ATO has recently provided information about how the tax system applies for someone who receives compensation from a financial institution that provided inappropriate advice and/or did not provide advice it should have. This can include compensation for the loss of an investment, or a refund of fees or interest.  Read more…

ATO set to issue excess super contribution determinations

From mid-October 2018, the ATO has started issuing excess concessional contributions (ECC) determinations for the 2017–2018 financial year. At the Superannuation Administration Stakeholders Group (SASG) meeting on 12 September 2018, the ATO said super funds should prepare for an influx of engagement and queries from members who receive these ECC determinations in relation to contributions above the $25,000 concessional cap for 2017–2018.  Read more…

Claiming work-related expenses: ATO guides and toolkits

This year, the ATO has launched its biggest ever education campaign to help taxpayers get their tax returns right. The ATO says the campaign, which is running throughout tax time, includes direct contact with over three million selected taxpayers, as well as specialised guides and toolkits for taxpayers, agents, employers and industry bodies. A key component of the campaign is simple, plain English guidance for the most common occupations, like teachers, nurses, police officers and hospitality workers.  Read more…

Illegal phoenix activity: public examinations in Federal Court matter

The ATO has announced that public examinations started in a Federal Court matter on 27 August 2018 in relation to a group of entities connected to a pre-insolvency advisor. The examinations will focus on the suspected promotion and facilitation of phoenix activities and tax schemes.  Read more…

Banking Royal Commission: possible super contraventions

On 24 August 2018, the Royal Commission into banking, superannuation and financial services misconduct released the closing submissions setting out possible contraventions by certain superannuation entities. The evidence surrounding these alleged breaches was revealed during the fifth round of public hearings (conducted 6–17 August 2018). During that time the Counsel Assisting, Ms Rowena Orr QC and Mr Michael Hodge QC, grilled high-level executives of some of the largest superannuation funds about practices that may involve misconduct or fall below community expectations.  Read more…

SMSF issues update: ATO speech

ATO Assistant Commissioners Superannuation Tara McLachlan and Dana Fleming recently spoke at the Self Managed Superannuation Fund (SMSF) Association Technical Days in various capital cities. The speech was mainly about practical considerations to be taken into account when setting up a new SMSF and during the first year of its operation. Other issues raised included:  Read more…

ATO data analytics and prefilling help tax return processing

The ATO reports that a record number of tax returns were finalised in the first two months of tax time this year, thanks to the ATO's data prefilling arrangements and correction of mistakes using analytics and data-matching. Over $11.9 billion has been refunded to taxpayers, and errors worth more than $53 million were detected and corrected before refunds were issued, Assistant Commissioner Kath Anderson has reported.  Read more…

The report of the House of Representatives Standing Committee on Tax and Revenue into Taxpayer Engagement with the Tax System has been tabled. This is a significant report, also covering issues that have been canvassed in previous tax reform reports such as the Australia's Future Tax System Review and the Henry Review.  Read more…

12-month extension of $20,000 instant asset write-off

The Treasury Laws Amendment (Accelerated Depreciation for Small Business Entities) Bill 2018 has now passed through both houses of Parliament without amendment. This uncontroversial and widely supported Bill was originally introduced on 24 May 2018, so it is unusual that the process has taken almost four months.  Read more…

Cryptocurrency and tax: updated guidelines

The ATO says that for those carrying on a business that involves transacting with cryptocurrency, the trading stock rules apply, rather than the capital gains tax (CGT) rules.  Read more…

The ATO as SMSF regulator: observations

In the opening address to the Chartered Accountants Australia and New Zealand National Self Managed Superannuation Fund (SMSF) Conference in Melbourne on 18 September 2018, James O'Halloran, ATO Deputy Commissioner, Superannuation, shared some observations and advice from the ATO's perspective as regulator for the SMSF sector. The address included the following points:  Read more…

Super sector must address trust deficit

In a speech to the Financial Services Council Summit on 26 July 2018, Australian Securities and Investments Commission (ASIC) Chair James Shipton said the superannuation sector must restore the "trust deficit" and be more mindful of the responsibilities that come with being the custodians of other people's money. Mr Shipton said the super industry has been exploiting opportunities to make money from members, citing examples of conduct that could lead to poor member outcomes, including poor advice, treatment of customers and defensiveness when it comes to transparency about fund operations.  Read more…

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