With bricks and mortar continuing to be the investment of choice for a great many Australians, we run through the claims you can and can't make for rental property this tax time. But if you are investing via an SMSF, borrowing for an investment must follow certain strict rules. We explain the regulations, which have recently been updated and clarified.
We also look at the revised Net Medical Expenses Offset, and summarise all the post-July 1 tax and super changes to keep in mind for the 2012-13 income year.
Another area of recent regulatory reform is the Living Away From Home Allowance (LAFHA), which now has both new rules and changed existing rules. Late last week the government issued a statement that whilst the reforms to LAFHA and essential details remain unchanged, the government announced that the commencement date will now be October 1, not July 1, 2012.
Should you require more information regarding any topic touched upon in this newsletter, please feel free to contact our office for personal advice.
Please CLICK HERE to open our Client Information Newsletter - July 2012 edition, which covers the following:
Medical expenses: What can you claim?
The latest Federal Budget changed the threshold you are able to claim for the total amount spent on medical expenses minus any reimbursements paid by private health insurance or Medicare. We explain the new thresholds, who is covered for claims, expenses that are are eligible to be claimed as an offset once net medical expenses are more than the thresholds and expenses that are not eligible for the offset.
Maximise your rental property claims:
Come tax time, every cent counts - particularly in the case of investors. Owners of rental properties are entitled to tax deductions in connection with their investments but
do you know what these deductions are and how you can save yourself from paying more? Our guide provides you with a list of claimable expenses for rental properties.
Living Away From Home Allowance (LAFHA)
LAFHA is intended to compensate an employee for the additional expenses they may incur when an employee is required to live somewhere other than their usual home in order to carry out their employment duties. The government have announced reforms to this scheme as well as a new regime. LAFHA arrangements entered into after 7.30pm AEST on May 8, 2012 come under the new regime from 1 October 2012.
SMSFs and geared property investment: In general terms, there is a prohibition on superannuation funds borrowing money, however an exception to this general rule enables self managed superannuation funds (SMSFs) to borrow in order to acquire certain assets. These borrowing arrangements are strictly regulated. We provide you with information on a recent Tax Office ruling (SMSFR 2012/1) which provides welcome clarification for SMSF trustees.
We also provide you with a summary of changes introduced by the government from July 1, 2012.
Should you require more information regarding any topic touched upon in this newsletter, please feel free to contact this office for personal advice.