June 2012 Newsletter
Welcome to the June 2012 newsletter. In this newsletter we will discuss:
- Transferring assets into your SMSF
- Ensuring that you claim a tax deduction on your super contribution
- New depreciation rules for small businesses
Transferring assets into your SMSF
As you may be aware you are allowed to transfer ASX listed shares and commercial property into your SMSF as an in-specie contribution. The Government has proposed the following from 1 July 2012:
- ASX listed shares will no longer be able to be transferred into your SMSF as an in-specie contribution. You must sell the shares first and you can then use the cash proceeds to contribute into your SMSF.
- In order to transfer Business Real Property you must have a valuation from a suitably qualified independent valuer to value the property being transferred.
A Business Real Property can be transferred into your SMSF for $50 stamp duty (assuming the property is owned by individuals who will also be members of the SMSF) and if the property was used as part of your business it can also be transferred in tax-free under the small business concessions.
Please contact us to assist you further in this matter if you plan to transfer shares or property into your SMSF.
Ensuring that you claim a tax deduction on your super contribution
The information below is very important if you have life insurance outside of your SMSF and it is owned in a retail/industry super fund or if you make personal super contributions into a retail/industry super fund.
In order to claim a tax deduction on the personal super contribution into a retail/industry super fund you must fill out a section 29-170 notice that should be provided by the retail/industry super fund. We will look after this notice if you have a SMSF but the retail/industry super funds must provide this to you if you are a member and you have made a personal super contribution during the year.
When you receive this notice in July/August please contact us so we can assist you. You must send this back to the super fund in order to validly claim a personal tax deduction on the super contribution as soon as possible. The superfund must also acknowledge the contribution by a letter following the receipt of the section 290-170 notice.
The importance of completing the section 290-170 notice is:
- You can validly claim a tax deduction on the super contribution (assuming you are self-employed)
- The super contribution will not be counted as a non-concessional contribution and you can avoid breaching the non-concessional contribution caps on this.
Please contact us for further assistance in this matter.
New depreciation rules for small businesses
Starting from 1 July 2012 if you are a small business (turnover less than $2 million per year) you can claim improved depreciation deductions. The new rules are:
- Assets under $6,500 can be automatically written off. This means that most computer equipment can be deducted immediately
- All assets are depreciated at 15% in the first year (it does not matter which month the asset was purchased in the year) and 30% in subsequent years.
- Motor vehicles purchased will have an immediate write-off of the first $5,000 with a cost of at least $6,500. The balance of the purchase price will allocated to the small business depreciation pool if the cost is more than $6,500. This means that if you buy a motor vehicle for $6,000 it will be deducted automatically. If you purchase a motor vehicle for $30,000, you can claim $5,000 in the first year plus 15% of $25,000 so the total deduction in the first year will be $8,750.
We hope you have enjoyed the newsletter and please contact us if you need any further assistance.
The material contained in this newsletter does not constitute legal advice. Any transmission or receipt of information via this newsletter does not intend to create a professional services relationship between DPL and the visitor.
DPL is not responsible for any action taken in reliance on any information contained in this newsletter. Anyone reading the newsletter should not act upon material contained in this newsletter without appropriate consultation.