Monthly Tax Update – November 2023
We are pleased to provide you with the Tax Update for the month of November 2023.
Article Highlights
Tax issues for business that have received a support payment
Taxpayers receiving government support grants or payments for business recovery from COVID-19 or natural disasters should consider including them in their assessable income. Grants are generally treated as assessable income, but some are declared non-assessable, non-exempt (NANE) income, which can be claimed for expenses directly related to earning their assessable income, such as wages, dividends, interest, and rent, but not for obtaining the grant.
Care required in paying super benefits
SMSF trustees must ensure a member has reached their preservation age, met conditions of release, and the fund's rules allow them to pay super benefits. Benefit payments to non-released members are taxed as ordinary income. Illegal release can result in penalties for the SMSF trustee, the SMSF, and the recipient. Investment restrictions apply to SMSFs in the accumulation phase. If a member dies, a death benefit is typically paid.
Notice of visa data-matching program
The ATO plans to gather visa data from the Department of Home Affairs for the 2024-2026 income years, including address history, visa grant status, migration agents, international travel movements, and sponsor details. The aim is to ensure tax and super reporting obligations and identify fraud and exploitation of the visa framework.
ATO says: "Be cyber wise, don't compromise"
The ATO advises taxpayers to implement four steps to protect themselves from cybercrimes: 1) Install updates for devices and software, 2) Implement multi-factor authentication (MFA), 3) Regularly back up files, and 4) Change passwords to passphrases. Regular updates ensure the latest security measures, while MFA requires two proofs of identity. Regular backups help avoid costly data recovery and increase account security. Passphrases use random words and can be generated or stored using a password manager.
Losses in crypto investments for SMSFs
SMSF trustees have experienced losses in crypto asset investments due to scams, theft, collapsed trading platforms, and lost passwords. The ATO recommends trustees be aware of these risks and avoid scams. Many crypto assets are not considered financial products, making it difficult for trustees to protect themselves if the platform fails or is hacked. The ATO recommends seeking financial advice before investing in crypto.