As the urban sprawl continues in most major Australian cities, we are often asked to advise on the tax treatment of subdivision projects. Before jumping in and committing to anything, it is important to understand the tax liabilities that might arise from these projects. Unfortunately, many people make incorrect assumptions about the way that subdivision projects will be taxed, often believing that any tax exposure will be minimal. However, the reality is that there are a number of important issues that need to be considered and that could have a significant impact on the overall profitability of the project. For example, when someone buys a property with the intention of subdividing it into smaller lots and selling them at a profit in the short term this will normally mean that any profit is taxed as ordinary income, rather than being taxed under the CGT rules. This means that the general CGT discount would not be available to reduce the tax liability, even if the property has been held for more than 12 months and it would not be possible to apply capital losses to reduce the taxable amount. Also, in situations like this the sale of the subdivided lots will often trigger a GST liability, further reducing any after-tax profits generated from the project. Many people fail to properly estimate the income tax and GST liabilities that will arise from property projects and can end up with a nasty shock when they realise the impact this has on the economic viability of the project. The ATO has recently updated its guidance in this area, adding a number of new and practical examples to demonstrate how the tax rules will typically apply. The ATO’s examples cover the income tax and GST consequences of common property transactions such as property flipping, subdivision projects and property development activities.  For example, in one of the examples the ATO looks at a scenario where the taxpayer repeatedly buys, renovates, and sells properties. They engage in market research, seeking professional advice, taking out business loans, and then carrying out renovations in a business-like manner. The ATO takes the view that the taxpayer is running a business, since the taxpayer’s primary intention is to make a profit from the renovations and reselling of the property. The profits are treated as ordinary income and taxed on revenue account. The CGT provisions don’t apply here since the property is held as trading stock. However, GST doesn’t apply on this particular situation as long as the properties have not undergone “substantial renovations”, which needs to be considered carefully. On the other hand, in another example the ATO deals with a taxpayer who subdivides the vacant land from their main residence because of ill health and growing debt levels. Since they didn’t initially intend to profit from the subdivision and sale of the vacant land, the sale is viewed as the mere realisation of a capital asset rather than a business venture. The activities related to the subdivision are limited to necessary actions for council approval, reflecting a low level of complexity and small scale. The sale of the subdivided lot is taxed on capital account under the CGT rules, qualifying for the general CGT discount if the land has been held for more than 12 months. However, the main residence exemption cannot apply because the land is not being sold together with the dwelling that has been used as the taxpayer’s main residence. You can find the ATO’s guide and examples here Need support or have questions? Talk to us today about maximising your outcomes and reducing your risk. Email advisory@st-m.com.au or call us on 02 6024 1655 Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

It has been a long time coming, but the Government finally passed legislation increasing the instant asset write-off threshold for the year ending 30 June 2025 to $20,000. This was announced back in the 2024-25 Federal Budget but the Government faced a number of hurdles in terms of passing the legislation. This basically means that individuals and entities who carry on a business with turnover of less than $10m can often claim an immediate deduction for the cost of depreciating assets (eg, plant and equipment) that are acquired during the 2025 financial year as long as the cost of the asset, ignoring GST credits that can be claimed, is less than $20,000. If you are thinking about purchasing an asset before 30 June 2025 with the hope of claiming an immediate deduction, then please reach out to us to confirm the position. The rules contain a number of tricks and traps which we can help you to navigate. The threshold is due to drop back to $1,000 from 1 July 2025 unless further legislation is passed to provide another temporary increase to the threshold or a permanent modification. Need support or have questions? Talk to us today about maximising your outcomes and reducing your risk. Email advisory@st-m.com.au or call us on 02 6024 1655 Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

With the end of the financial year fast approaching we outline some opportunities to maximise your deductions and give you the low down on areas at risk of increased ATO scrutiny. Opportunities Bolstering superannuation If growing your superannuation is a strategy you are pursuing, and your total superannuation balance allows it, you could make a one-off deductible contribution to your superannuation if you have not used your $30,000 cap. This cap includes superannuation guarantee paid by your employer, amounts you have salary sacrificed into super and any amounts you have contributed personally that will be claimed as a tax deduction. If your total superannuation balance on 30 June 2024 was below $500,000 you might be able to access any unused concessional cap amounts from the last five years in 2024-25 as a personal contribution. For example, if you were $8,000 under the cap in each of the last 5 years, you could contribute an additional $40,000 and take the tax deduction in this financial year at your personal tax rate. To make a deductible contribution to your superannuation, you need to be aged under 75, lodge a notice of intent to claim a deduction in the approved form (check with your superannuation fund), and receive an acknowledgement from your fund before you lodge your tax return. For those aged between 67 and 74, you can only claim a deduction on a personal contribution to super if you meet the work test (i.e., work at least 40 hours during a consecutive 30-day period in the income year, although some special exemptions might apply). If your spouse’s assessable income is less than $37,000 and you both meet the eligibility criteria, you could contribute to their superannuation and claim a $540 tax offset. If you are likely to face a tax bill this year and you made a capital gain on shares or property you sold, then making a larger personal superannuation contribution might help to offset the tax you owe. Charitable donations When you donate money (or sometimes property) to a registered deductible gift recipient (DGR), you can claim amounts of $2 and above as a tax deduction. The more tax you pay, the more valuable the tax deductible donation is to you. For example, a $10,000 donation to a DGR can create a $3,250 deduction for someone earning up to $120,000 but $4,500 to someone earning $180,000 or more (excluding Medicare levy). To be deductible, the donation must be a gift and not in exchange for something. Special rules apply for amounts relating to charity auctions and fundraising events run by a DGR. Philanthropic giving can be undertaken in a number of different ways. Rather than providing gifts to a specific charity, it might be worth exploring the option of giving to a public ancillary fund or setting up a private ancillary fund. Donations made to these funds can often qualify for an immediate deduction, with the fund then investing and managing the money over time. The fund generally needs to distribute a certain portion of its net assets to DGRs each year. Investment property owners If you do not have one already, a depreciation schedule is a report that helps you calculate deductions for the natural wear and tear over time on your investment property. Depending on your property, it might help to maximise your deductions. Risks Work from home expenses Working from home is a normal part of life for many workers, and while you can’t claim the cost of your morning coffee, biscuits or toilet paper (seriously, people have tried), you can claim certain additional expenses you incur. But, work from home expenses are an area of ATO scrutiny. There are two methods of claiming your work from home expenses; the short-cut method, and the actual method. The short-cut method allows you to claim a fixed rate of 70c for every hour you work from home for the year ending 30 June 2025. This covers your energy expenses (electricity and gas), internet expenses, mobile and home phone expenses, and stationery and computer consumables such as ink and paper. To use this method, it’s essential that you keep a record of the actual days and times you work from home because the ATO has stated that they will not accept estimates. The alternative is to claim the actual expenses you have incurred on top of your normal running costs for working from home. You will need copies of your expenses, and your diary for at least 4 continuous weeks that represents your typical work pattern. Landlords beware If you own an investment property, a key concept to understand is that you can only claim a deduction for expenses you incurred in the course of earning income. That is, the property normally needs to be rented or genuinely available for rent to claim the expenses. Sounds obvious but taxpayers claiming investment property expenses when the property was being used by family or friends, taken off the market for some reason or listed for an unreasonable rental rate, is a major focus for the ATO, particularly if your property is in a holiday hotspot. There are a series of issues the ATO is actively pursuing this tax season. These include: Refinancing and redrawing loans – you can normally claim interest on the amount borrowed for the rental property as a deduction. However, where any part of the loan relates to personal expenses, or where part of the loan has been refinanced to free up cash for your personal needs (school fees, holidays etc.,), then the loan expenses need to be apportioned and only that portion that relates to the rental property can be claimed. The ATO matches data from financial institutions to identify taxpayers who are claiming more than they should for interest expenses. The difference between repairs and maintenance and capital improvements – while repairs and maintenance costs can often be claimed immediately, a deduction for capital works is generally spread over a number of years. Repairs and maintenance expenses must relate directly to the wear and tear resulting from the property being rented out and generally involve restoring the property back to its previous state, for example, replacing damaged palings of a fence. You cannot claim repairs required when you first purchased the property. Capital works however, such as structural improvements to the property, are normally deducted at 2.5% of the construction cost for 40 years from the date construction was completed. Where you replace an entire asset, like a hot water system, this is a depreciating asset and the deduction is claimed over time (different rates and time periods apply to different assets). Co-owned property – rental income and expenses must normally be claimed according to your legal interest in the property. Joint tenant owners must claim 50% of the expenses and income, and tenants in common according to their legal ownership percentage. It does not matter who actually paid for the expenses. Gig economy income It’s essential that any income (including money, appearance fees, and ‘gifts’) earned from platforms such as Airbnb, Stayz, Uber, YouTube, etc., is declared in your tax return. The tax rules consider that you have earned the income “as soon as it is applied or dealt with in any way on your behalf or as you direct”. If you are a content creator for example, this is when your account is credited, not when you direct the money to be paid to your personal or business account. Squirrelling it away from the ATO in your platform account won’t protect you from paying tax on it. Since 1 July 2023, the platforms delivering ride-sourcing, taxi travel, and short-term accommodation (under 90 days), have been required to report transactions made through their platform to the ATO under the sharing economy reporting regime so expect the ATO to utilise data matching activities to identify unreported income. Other sharing economy platforms have been required to start reporting from 1 July 2024. If you have income you have not declared, do it now before the ATO discover it and apply penalties and interest. For your business Opportunities Write-off bad debts Your customer definitely not going to pay you? If all attempts have failed, the debt can be written off by 30 June to claim a deduction this year. Ensure you document the fact that you have written off the bad debt on your debtor’s ledger or with a minute. Obsolete plant & equipment If your business has obsolete plant and equipment sitting on your depreciation schedule, instead of depreciating a small amount each year, scrap it and write it off before 30 June if you don’t use it anymore. For companies If it makes sense to do so, bring forward tax deductions by committing to pay directors’ fees and employee bonuses (by resolution), and paying June quarter super contributions in June. Risks Tax debt and not meeting reporting obligations Failing to lodge returns is a huge ‘red flag’ for the ATO that something is wrong in the business. Not lodging a tax return will not stop the debt escalating because the ATO has the power to simply issue an assessment of what they think your business owes. If your business is having trouble meeting its tax or reporting obligations, we can assist by working with the ATO on your behalf. Professional firm profits For professional services firms - architects, lawyers, accountants, etc., - the ATO is actively reviewing how profits flow through to the professionals involved, looking to see whether structures are in place to divert income to reduce the tax they would be expected to pay. Where professionals are not appropriately rewarded for the services they provide to the business, or they receive a reward which is substantially less than the value of those services, the ATO is likely to take action. Need support or have questions? Talk to us today about maximising your outcomes and reducing your risk. Email advisory@st-m.com.au or call us on 02 6024 1655 Note: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

The Government has announced a temporary ban on investors buying established homes between 1 April 2025 to 31 March 2027. The measure aims to curb foreign “land banking.” From 1 April 2025, foreign investors (including temporary residents and foreign-owned companies) will be prohibited from acquiring established dwellings unless they qualify for specific exemptions. While exemptions exist, they are limited. In addition, foreign investors purchasing vacant land will be required to meet development conditions that require the land to be used productively within a reasonable timeframe. Note : The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

The amount of money that can be transferred to a tax-free retirement account will increase to $2m on 1 July 2025. Each year, advisers await the December inflation statistics to the be released. The reason is simple, the transfer balance cap – the amount that can be transferred to a tax-free retirement account – is indexed to the Consumer Price Index (CPI) released each December. If inflation goes up, the general transfer balance cap is indexed in increments of $100,000 at the start of the financial year. In December 2024, the inflation rate triggered an increase in the cap from $1.9m to $2m. The complexity with the transfer balance cap is that each person has an individual transfer balance cap. If you have started a retirement income stream, when indexation occurs, any increase only applies to your unused transfer balance cap. Considering retiring in 2025? If you are considering retiring, either fully or partially, indexation of the transfer balance cap provides a one-off opportunity to increase the amount of money you can transfer to your tax-free retirement account. That is, if you start taking a retirement income stream for the first time in June 2025, your transfer balance cap will be $1.9m but if you wait until July 2025 your transfer balance cap will be $2m, an extra tax-free $100,000. Already taking a pension? If you are already taking a retirement income stream, indexation applies to your unused transfer balance cap - so you might not benefit from the full $100,000 increase on 1 July 2025. Where can I see what my cap is? Your superannuation fund reports the value of your superannuation interests to the ATO. You can view your personal transfer balance cap, available cap space, and transfer balance account transactions online through the ATO link in myGov . If you have a self-managed superannuation fund (SMSF), it is very important that your reporting obligations are up to date. Need more information or advice specific to your needs? Get in touch today advisory@st-m.com.au or phone us on 02 6024 1655

The superannuation guarantee rules are broad and, in some circumstances, extend beyond the definition of common law employees to some directors, contractors, entertainers, sports persons and other workers. Employers need to pay compulsory superannuation guarantee (SG) to those considered employees under the definition in the SG rules. But, the SG definition of an employee is broad and just how far this definition extends has sparked debate of late about the rights of performers, gym instructors and others not typically considered employees. For employers and business owners, it is crucially important that if there is any uncertainty about the rights of workers to SG, your position is confirmed. This might be an initial assessment of the position by us, confirmed by an employment lawyer, or clarified by applying for a ATO private ruling covering your specific workplace arrangements. One of the things that employers find most alarming is that there is no tangible time limit on the recovery of outstanding SG obligations. In theory, the ATO can go back as far as it determines necessary to recover unpaid superannuation contributions for workers who are classified as employees for SG purposes. One of the key features of the SG system is to ensure that appropriate contributions are being made for employees and deemed employees, to adequately support them in their retirement. The SG laws, and complimentary director penalty regime, ensure that every cent owing to an employee for SG is paid. Who is not paid super guarantee? Super guarantee does not need to be paid to: · Under 18s who do not work more than 30 hours a week. · Private and domestic workers who do not work more than 30 hours a week. · Non-resident employees who perform work outside of Australia. · Employees temporarily working in Australia covered by an agreement. · Some foreign executives who hold certain visas or entry permits. Generally, SG is not payable if you have entered into a contract with a company, trust or partnership. If you have Australian employees temporarily working outside of Australia in a country with a bilateral social security agreement , for example, the United States, you should continue paying SG and apply for a certificate of coverage to avoid paying super (or the equivalent) in the country where the employee is temporarily located. SG’s broader definition of an employee There is a section of the SG rules, section 12 , that specifies who is deemed to be an employee for SG purposes. This section extends the definition of an employee beyond common law to cover: · Company directors who are remunerated for performing duties; · Contractors working under a contract wholly or principally for their labour; · Certain state and Commonwealth government contracted workers; and · Those paid to perform or present any music, play, dance, entertainment, sport or other similar promotional activity. This includes people who provide services in connection with these activities or people paid in relation to film, tape, disc or television. Are contractors entitled to SG? If your contractor holds an Australian Business Number (ABN), this of itself will not prevent SG from applying. Where the arrangement looks like it is a contract for the provision of an individual’s labour and skills, it is likely they will meet the definition of an employee and SG will be payable. The SG rules state if, “a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract.” This definition is alarming to many employers as the rate paid to contractors, and often the terms of the agreement, factor in an uplift for super guarantee and other entitlements that would normally be paid if the person was an employee. But for SG purposes, it does not matter what the contract says, if the person is deemed to be an employee under the rules, they are entitled to SG and the employer is obligated to pay it. The Australian Taxation Office (ATO) states that SG needs to be paid to contractors if you pay them: · under a verbal or written contract that is mainly for their labour (more than half the dollar value of the contract is for their labour) · for their personal labour and skills (payment isn't dependent on achieving a specified result) · to perform the contract work (work cannot be delegated to someone else). In a recent ruling , the ATO says that where the worker is required to use a substantial capital asset (such as a truck) this will help in arguing that the contract is not mainly for the labour of the worker, but this will always depend on the facts. Are directors paid SG? Yes. Directors (members of executive bodies of bodies corporate) should be paid SG if they are remunerated for performing duties for the company. Entertainers, performers and sportspeople Generally, if a performer operates through a company, trust, or partnership then there is not an employment relationship and SG is not payable. However, individual artists, performers and sportspeople are captured as employees under the SG rules ( section 12(8 )) where they are paid to: · perform or present, or to participate in the performance or presentation of, any music, play, dance, entertainment, sport, display or promotional activity or any similar activity involving the exercise of intellectual, artistic, musical, physical or other personal skills; · provide services in connection with an activity referred to above; · perform services in, or in connection with, the making of any film, tape or disc or of any television or radio broadcast. Whoever is paying the individual for their labour, is generally responsible for the payment of that individual’s SG. For example, a music festival operator that contracts a sole trader to perform at a festival might be liable for SG for that performer. Likewise, if the sole trader contracts band members to perform with them at the festival, then the sole trader is responsible for the SG of the band members. If however, the music festival worked with an agency to supply the performers (the music festival pays the agency, the agency pays the performers), then the agency is likely to be responsible for the SG of the artists if there is a liability. If the agency only charges a booking fee and the festival pays the performers directly, then the festival is likely to be responsible for the performer’s SG. You can see from this how important it is to determine who meets the definition of an employee for SG purposes, and if so, to understand the parties to the deemed employment relationship. What’s a service “in connection to” The definition of an employee for SG purposes captures workers who work with performers, for example individuals that are producers, videographers, editors, etc. If the person meets the definition of an employee under the SG rules, then it is likely SG is payable. Is a gym instructor a sportsperson? A gym instructor may be captured under the definition of a deemed employee under the SG rules. Whether the gym is liable to pay the instructor SG really depends on the facts of the individual arrangement. Let’s look at the example of a gym instructor operating as a sole trader under an ABN. · There is a contract between the instructor and the gym stating that the instructor is an independent contractor and is responsible for their own SG payments and other employment obligations. · The instructor is paid per class, and per training session with clients, covering their time and labour. · The instructor utilises the equipment of the gym and its scheduling system. · The instructor wears the uniform of the gym. · The instructor is trained by the gym in how to deliver the services of the gym. Employee? Most likely because the ATO places a heavy significance on whether an individual is working to build their own business or someone else’s. If the instructor “..works under a contract that is wholly or principally for the labour of the person” then this also brings them into the SG net. If the employer, the gym, had not been paying SG, is it exposed to SG payments for the instructor since the employment relationship began. Concerned about your workplace SG liability? Please contact us for an initial review. Email advisory@st-m.com.au or call us on 02 6024 1655

Why Company Directors need to ensure that tax lodgements and payments are made on time. Obligations in relation to being a Company Director can sometimes be onerous, but in the current ATO environment with regard to debt collection, one responsibility may even outweigh all of the others. Company Directors are legally responsible for ensuring that a company’s tax and superannuation obligations are reported and paid on time. And the ATO can currently utilise legislative provisions to force the Director(s) of a company to personally pay outstanding: Pay As You Go Withholding ( PAYGW ) Goods and Services Tax ( GST ) Superannuation Guarantee Charge ( SGC ). A Director becomes liable to a penalty at the end of the day on which the company is due to meet its obligation. At this time, the penalty is created automatically. The ATO does not need to issue any notices or take any action to create the penalty. However, the Commissioner of Taxation (or the appropriate Delegate of the Commissioner), must not commence proceedings to recover a director penalty until 21 days after a Director Penalty Notice (“ DPN ”) is issued to a Director. Even if you resign as a Director of the Company, you can be liable for director penalties for liabilities of the Company. Similarly, if you are appointed as a new company Director, you can become personally liable for any unpaid amounts. There are two types of DPN’s: non-lockdown DPN and lockdown DPN. Non-lockdown DPN A non-lockdown DPN can be issued to a Director of a company that has lodged its business activity statements ( BAS ), instalment activity statements ( IAS ) and/or superannuation guarantee charge statements within three (3) months of the due date for lodgement, however the PAYG withholding, GST and/or SGC debts remain unpaid. The notice gives the Director 21 days to take one of the following actions: pay the debt in full; or appoint a Voluntary Administrator ( VA ) over the Company; or appoint a Small Business Restructuring ( SBR ) Practitioner over the Company; or appoint a Liquidator over the Company. There is a misconception that Directors can avoid personal liability by entering into a payment plan with the ATO within 21 days, however this is not correct. The payment plan simply allows the Director to repay the liability by way of instalments, however the Director becomes personally liable for the whole debt after the end of the 21-day period. In the event the Company (or the Director) defaults on the payment plan, the ATO can commence proceedings against the Director personally, seeking recovery of the relevant tax debt(s). Lockdown DPN A lockdown DPN can be issued to a Company's Director where the Company has failed to lodge its BAS, IAS and/or SGC statements within three (3) months of their due date for lodgement. In this case, the penalty permanently locks down on the Director and there is no ability to remit the penalty (i.e. avoid personal liability), except by paying the debt in full. It has been reported that the ATO intends to utilise the DPN regime more often as the ATO ramps up its actions to recover $30 billion in overdue small business tax. We have recently become aware that the ATO can (and will) issue lockdown DPN’s on company Directors even after the Director has: placed the Company into Liquidation ; or appointed a Voluntary Administrator over the Company; or appointed a Small Business Restructuring Practitioner over the Company.  It is important to understand your obligations as a company Director and, in particular, how you may not be able to avoid personal liability of certain company debts, including tax debts, even if you appoint an insolvency practitioner over the Company. Our takeaway from this is we want you to understand is that, before it gets to this point, even if you cannot pay, you will much better off by lodging all tax forms ie BAS/IAS/SGC on time (or within 3 months of the due date) as by lodging late will expose Directors to hard lockdown DPN’s. These need to be avoided as Directors are still liable even if the company goes into liquidation. The moral of the story is to have your lodgements up to date and seek specialist advice sooner rather than later! Want more information or discuss your personal circumstances? Call us on 02 6024 1655 or email advisory@st-m.com.au and we'll contact you.

Why Company Directors need to ensure that tax lodgements and payments are made on time. Obligations in relation to being a Company Director can sometimes be onerous, but in the current ATO environment with regard to debt collection, one responsibility may even outweigh all of the others. Company Directors are legally responsible for ensuring that a company’s tax and superannuation obligations are reported and paid on time. And the ATO can currently utilise legislative provisions to force the Director(s) of a company to personally pay outstanding: Pay As You Go Withholding ( PAYGW ) Goods and Services Tax ( GST ) Superannuation Guarantee Charge ( SGC ). A Director becomes liable to a penalty at the end of the day on which the company is due to meet its obligation. At this time, the penalty is created automatically. The ATO does not need to issue any notices or take any action to create the penalty. However, the Commissioner of Taxation (or the appropriate Delegate of the Commissioner), must not commence proceedings to recover a director penalty until 21 days after a Director Penalty Notice (“ DPN ”) is issued to a Director. Even if you resign as a Director of the Company, you can be liable for director penalties for liabilities of the Company. Similarly, if you are appointed as a new company Director, you can become personally liable for any unpaid amounts. There are two types of DPN’s: non-lockdown DPN and lockdown DPN. Non-lockdown DPN A non-lockdown DPN can be issued to a Director of a company that has lodged its business activity statements ( BAS ), instalment activity statements ( IAS ) and/or superannuation guarantee charge statements within three (3) months of the due date for lodgement, however the PAYG withholding, GST and/or SGC debts remain unpaid. The notice gives the Director 21 days to take one of the following actions: pay the debt in full; or appoint a Voluntary Administrator ( VA ) over the Company; or appoint a Small Business Restructuring ( SBR ) Practitioner over the Company; or appoint a Liquidator over the Company. There is a misconception that Directors can avoid personal liability by entering into a payment plan with the ATO within 21 days, however this is not correct. The payment plan simply allows the Director to repay the liability by way of instalments, however the Director becomes personally liable for the whole debt after the end of the 21-day period. In the event the Company (or the Director) defaults on the payment plan, the ATO can commence proceedings against the Director personally, seeking recovery of the relevant tax debt(s). Lockdown DPN A lockdown DPN can be issued to a Company's Director where the Company has failed to lodge its BAS, IAS and/or SGC statements within three (3) months of their due date for lodgement. In this case, the penalty permanently locks down on the Director and there is no ability to remit the penalty (i.e. avoid personal liability), except by paying the debt in full. It has been reported that the ATO intends to utilise the DPN regime more often as the ATO ramps up its actions to recover $30 billion in overdue small business tax. We have recently become aware that the ATO can (and will) issue lockdown DPN’s on company Directors even after the Director has: placed the Company into Liquidation ; or appointed a Voluntary Administrator over the Company; or appointed a Small Business Restructuring Practitioner over the Company.  It is important to understand your obligations as a company Director and, in particular, how you may not be able to avoid personal liability of certain company debts, including tax debts, even if you appoint an insolvency practitioner over the Company. Our takeaway from this is we want you to understand is that, before it gets to this point, even if you cannot pay, you will much better off by lodging all tax forms ie BAS/IAS/SGC on time (or within 3 months of the due date) as by lodging late will expose Directors to hard lockdown DPN’s. These need to be avoided as Directors are still liable even if the company goes into liquidation. The moral of the story is to have your lodgements up to date and seek specialist advice sooner rather than later! Want more information or discuss your personal circumstances? Call us on 02 6024 1655 or email advisory@st-m.com.au and we'll contact you.

The Government has announced its intention to introduce mandatory standards for large superannuation funds to, amongst other things, deliver timely and compassionate handling of death benefits. Do we have a problem with paying out super when a member dies? The value of superannuation in Australia is now around $4.1 trillion. When you die, your super does not automatically form part of your estate but instead, is paid to your eligible beneficiaries by the fund trustee according to the fund rules, superannuation law, and any death benefit nomination you made. Complaints to the Australian Financial Complaints Authority (AFCA) about the handling of death benefits surged sevenfold between 2021 and 2023. The critical issue was delays in payments. While most super death benefits are paid within 3 months, for others it can take well over a year. The super laws do not specify a time period only that super needs to be paid to beneficiaries “as soon as practicable” after the death of the member. How to make sure your super goes to the right place Death benefits are a complex area. The superannuation fund trustee has discretion over who gets your super benefits unless you have made a valid death nomination. If you don’t make a decision, or let your nomination lapse, then the fund has the discretion to pay your super to any of your dependants or your estate. There are four types of death nominations: 1. Binding death benefit nomination Directs your super to your nominated eligible beneficiary, the trustee is bound by law to pay your super to that person as soon as practicable after your death. Generally, death benefit nominations lapse after 3 years unless it is a non-lapsing binding death nomination. 2. Non-lapsing binding death benefit nomination If permitted by your trust deed, a non-lapsing binding death benefit nomination will remain in place unless you cancel or replace it. When you die, your super is directed to the person you nominate. 3. Non-binding death nomination A guide for trustees as to who should receive your super when you die but the trustee retains control over who the benefits are paid to. This might be the person you nominate but the trustees can use their discretion to pay your super to someone else or to your estate. 4. Reversionary beneficiary If you are taking an income stream from your superannuation at the time of your death (pension), the payments can revert to your nominated beneficiary at the time of your death and the pension will be automatically paid to that person. Only certain dependants can receive reversionary pensions, generally a spouse or child under 18 years. Who is eligible to receive your super? Your super can be paid to a dependant, your legal representative (for example, the executor of your will), or someone who has an interdependency relationship with you. A dependant for superannuation purposes is “the spouse of the person, any child of the person and any person with whom the person has an interdependency relationship”. An interdependency relationship is where someone depends on you for financial support or care. What happens if I don’t make a nomination? If you have not made a death benefit nomination, the trustees will decide who to pay your superannuation to according to state or territory laws. This will be a superannuation dependant or the legal representative of your estate to then be distributed according to your Will. Where it can go wrong There have been a number of court cases over the years that have successfully contested the validity of death nominations. For a death nomination to be valid it must be in writing, signed and dated by you, and witnessed. The wording of your nomination also needs to be clear and legally binding. If you nominate a person, ensure you use their legal name. If your super is to be directed to your estate, ensure the wording uses the correct legal terminology. One of the reasons for delays in paying death benefit nominations cited by the funds is where there is no nomination (or it is expired or invalid), there are multiple potential claimants, and the trustee needs to work through sometimes complex family scenarios. The bottom line is, young or old, check your nominations with your superannuation fund and make sure you have the right type of nomination in place, and it is valid and correct. While there still might be a delay in getting your super where it needs to go if you die, the process will be a lot quicker and less onerous for your loved ones. Contact us today to discuss your individual circumstances. Email stm@st-m.com.au or call us on 02 6024 1655