August 2024 Newsletter

Please click on the following link to view this month's newsletter for August 2024. We would like to highlight the following articles:-

Time for a superannuation check-up

Effective from 1 July 2024, the superannuation guarantee rate increased from 11% to 11.5%. Employer contributions are calculated based on an employee’s ordinary time earnings, covering payments of salary and wages. For employers, where applicable, the maximum super contribution base has been revised from $65,070 to $62,270 per quarter.

Additionally, the concessional super contributions cap has been raised from $27,500 to $30,000, while the non-concessional contributions cap has increased from $110,000 to $120,000. The three-year bring-forward arrangement has also expanded from $330,000 to $360,000.

New SMSF expense rules: what you need to know

Recent changes to the tax rules for self-managed superannuation fund (SMSF) expenses can have significant implications. These rules target "non-arm’s length general expenses" - services provided to your SMSF at below market prices or for free and could result in such income being taxed at 45% as "non-arm’s length income" (NALI).

These changes relate to general expenses only, they do not alter how the NALI rules apply to specific expenses or income from non-arms length sources. The rules, effective from 29 June 2024, are retroactive to 1 July 2018 and have a core focus on the following areas:

General Expenses: Applies to expenses not tied to specific assets, like accounting or investment advice unrelated to specific investments if they have been provided for free or at a discount.

Trustee Roles: Generally, trustees can’t charge for their duties under superannuation law, but NALI rules apply if they provide professional services for free or at a discount.

Should you fall foul of these new rules, the legislation will, depending on the circumstances, limit the NALI income to either twice the difference between the actual expense and the market rates or twice the market rate if no expense is incurred. However, the new rules cap the total NALI income as a result of these two expense categories at the total of the SMSF’s taxable income (after deductions).

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