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Newsletter September 2008

An FBT exemption applies for the following eligible work-related items;

• a portable electronic devise (including laptop computer)
• an item of computer software
• an item of protective clothing
• a briefcase
• a tool of trade

However, the exemption is limited to;

• items primarily used for work-related purposes
• one item per FBT year for items that have a substantially identical function, unless the item is a replacement item.

The tax office has clarified the use of payment summaries with respect to superannuation income streams. Individual income tax returns for the 2007/2008 financial year indicate that payment summaries are needed.

However, a PAYG Payment Summary is only needed by individuals who either receive superannuation income stream payments before their 60^th birthday or individuals who receive payments that contain an untaxed element.

For taxed element amounts paid after an individual turns 60 there is no requirement for a fund to withhold any tax from the payment and therefore the fund is not required to issue a payment summary.

Members can access some or all of their preserved benefits before they reach the preservation age in limited circumstances;

• the member is suffering severe financial hardship. A member may be paid up to $10,000 a year from their preserved benefits if they;
  • have received Commonwealth income support for at least 26 consecutive weeks, and
  • cannot meet reasonable and immediate living expenses.
• a payment is warranted on compassionate grounds. Applications for release on compassionate grounds must be referred to APRA. Examples may include,
  • the cost of medical treatment that is not ordinarily available in the public health system or for medical transportation costs,
  • loan repayments to prevent a mortgagee sale or foreclosure (only equivalent of three months mortgage repayments plus twelve months interest on the outstanding mortgage can be paid in any twelve month period).
  • The cost of modifications to the home or motor vehicle of a severely disabled member or dependent to accommodate their special needs.
  • Palliative care expenses of a member
  • Palliative care or funeral expenses of a dependent.
• the member is permanently incapacitated, in which case all preserved benefits are payable
• the member is temporarily incapacitated, in which case a payment may be available under some conditions
• the member has died
• the member is a temporary resident of Australia and permanently leaves Australia
• the member is terminally ill, which they can access their superannuation tax-free.

From 1 July 2008, a dependant tax offset will only be able to be claimed by a taxpayer whose taxable income is $150,000 or less. This threshold will apply to the following offsets:

• spouse
• housekeeper
• child housekeeper
• parent/parent-in-law, and
• invalid relative.

The separate net income of the dependant will reduce the availability of claiming the full dependant tax offset.

New arrangements for the payment of payroll tax for apprentices and trainees in NSW take effect from 1 July 2008.

Prior to 1 July 2008, wages paid to apprentices and new entrant trainees in NSW were exempt from payroll tax. From 1 July 2008, this exemption no longer applies and all employers are required to include the wages and salaries paid to apprentices and new entrant trainees in their payroll tax calculation.

A rebate scheme replaces this exemption. Rebates are provided by the Office of State Revenue (OSR) by allowing the amount of the rebate to be offset against monthly payroll tax payments. OSR provide this offset facility through their monthly calculator online service. This facility will be available for the first monthly payroll tax return for the 2008-09 tax year, which was due on 7 August 2008.

The file delivery tool allows Wearne & Co clients to upload and submit files to a company principal using a simple form in their web browsers. Typically this method of file delivery would be used if the file is too large to email due to size restrictions.

To upload a document, for example, a large MYOB file, use the link http://www.wearne.com.au/FileDelivery/FilePost.aspx or follow the link on the Wearne website navigation named ‘File Upload’.