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Byfields - February 2017 Newsletter
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Perth | Northam | Merredin | Narrogin | Wagin | York | Beverley
Business Advisory & Taxation - Agribusiness - SMSF - Auditing
Do You Know the Consequences of Not Having a Will ?

Dying without a Will could have significant legal and tax consequences for your family!
 
Byfields has contracted an experienced estate planning lawyer to be available to meet with yourself and your Byfields accountant to draft wills and address other estate issues and provide advice on powers of attorney.
 
Stephen Park from Pacer Legal will be attending the Byfields Belmont office every Friday.
 
We will supply all documentation to the lawyer before you meet with him to ensure he has all the information available so the process will run smoothly with minimum fuss.
 
If you wish to make an appointment to review your Wills or to discuss other estate issues, please contact Tracey Robbins on 08 6274 6400.
 
Employment Contracts

Do you have employment contracts in place for each of your employees? Are your employment contracts in-line with the applicable award, the National Employment Standards (NES) and the Fair Work Act 2009 (the Act)?
 
Importance of Employment Contracts

With the ever increasing mine field of employment law legislation and the multitude of awards, national or state, the NES and the Act to consider, it has never been more vital to have written employment contracts in place.
 
A written employment contract sets out the ground rules of the employment relationship between the employer and employee and it limits the risk for employers, and provides support when resolving workplace disagreement.

 
What is an Employment Contract?

An employment contract is a legally binding agreement between two parties and is designed to give both parties security and protection. Employment contracts generally address important aspects of the employment such as wages, benefits, termination, procedures, covenants not to compete, and the duties and responsibilities of the employer and employee.
 
Why have an Employment Contract?

For the employee, a contract gives them the security that they are working for a professional business that has clearly defined obligations and agreement on all terms of employment.
 
For the employer, they have the security that the employee is fully aware of their obligations and has agreed to comply with the stated terms.
 
Put it in Writing

As a matter of principle a contract of employment should always be in writing and signed by both parties. Oral agreements may be considered invalid and are difficult to prove in cases of doubt or if contested. A written contract gives clarity and evidence for both parties.
 
In Summary

Having an employment contract will often give you more control over how your employees work. By laying out the specific standards that you expect from your employees, you may have an easier time when disciplining or terminating an employee that is not meeting those standards.
 
If you need any assistance with your employment contracts, contact Jennifer Simpson, our Senior HR Officer, on 08 6274 6400.

 
Superannuation Changes - What Rules Apply for 2016/2017 ?
 
The key elements of the superannuation system remain the same for the 2016/17 financial year, prior to significant changes from 1 July 2017:
 
Concessional contributions caps (reduced cap from July 2017)

For the 2016/17 year, the concessional contributions caps have not changed. If you’re aged 48 years or under on 30 June 2016, your concessional cap is $30,000. If you’re aged 49 years or over on 30 June 2016, your cap is $35,000. From 1 July 2017, the concessional cap will be cut to $25,000 for all age groups. From July 2017, voluntary concessional contributions will still be possible, subject to the lower cap, so be sure to review any salary sacrifice arrangements from July 2017.


Non-concessional contributions caps (reduced cap from July 2017)

For the 2016/17 year, the non-concessional contributions caps have not changed. The annual NCC cap is $180,000, and if under the age of 65, you can bring forward 2 years’ worth of contributions up to $540,000 in NCCs in one financial year. From 1 July 2017, the annual NCC cap will drop to $100,000 and the maximum bring forward has dropped to $300,000.  If your super balance is more than $1.6 million you are no longer able to able to make NCCs. For many funds 30 June 2017 is the last opportunity to use your full $180,000 or $540,000 cap.
 
No increase in tax on super fund investment earnings (pension transfer balance cap from July 2017)

The concessional tax rate on your super fund account’s investment earnings is not changing in 2017. Super fund investment earnings are taxed at 15% and generally 10% for capital gains in accumulation phase. From 1 July 2017 the Government has imposed a transfer balance cap of $1.6 million on the value of assets that you may take into pension phase. Earnings on the pension cap portion of the super fund will still be tax free and any excess retained in super will be taxed at the accumulation rate.
 
Super benefits for over-60s remain tax-free

The tax treatment of investment earnings on super pension assets is different from the tax treatment of super benefits paid from a super or pension account. If you’re aged 60 years or over, you can still receive your super benefit payments tax-free.
 
If you’re aged under 60 years but you have reached your preservation age, your super benefit payments will continue to receive concessional tax treatment, in the form of a 15% pension tax offset, and a tax-free threshold for lump sum payments.
 
Tax exemption on investment earnings for transition-to-retirement pensions (TTRs) remains until 30 June 2017 (removed from 1 July 2017)

Taking effect from 1 July 2017, the Government has removed the tax-exempt status of earnings supporting a transition-to-retirement pension (TTR). Until 30 June 2017, the investment earnings on super assets financing a TTR are exempt from tax.
 
Tax treatment of death benefits remains the same (apart from removal of anti-detriment payments from July 2017)

The tax treatment of death benefits is unchanged with dependants under the tax laws (such as spouses and children under the age of 18), continuing to receive death benefits free of tax, and non-dependants (such as financially independent adult children) liable for a 15% tax on the taxable component of the death benefit.
 
10% employment test abolished from July 2017

In order to claim a personal super deduction, you have to satisfy an employment test, where less than 10% of your gross income is earned from employment sources. This rule disadvantages taxpayers whose income is a mix of employment and self-employed or investment income.  From 1 July 2017, the employment test will no longer apply and you may top up your employer contributions with a personal deduction contribution to the $25,000 cap.
 
Catch-up concessional contributions

From 1 July 2018, the unused portion of your $25,000 annual concessional contributions cap can be carried forward on a rolling basis for up to 5 years, where your super balance is less than $500,000.  This allows a larger deduction in later years for any unused earlier contributions to offset one-off income such as capital gains and bonuses.
 
Low Income Super Contribution continues

For lower-income earners, the Low Income Super Contribution is a refund of contributions tax into your super account. If you earn less than $37,000 and concessional contributions are paid into your super account, either by your employer or yourself, you can expect a refund of up to $500 a year for the contributions tax deducted. The threshold of $37,000 applies to your ‘adjusted taxable income’. From 1 July 2017 this will be known as the Low Income Super Tax Offset.
 
Co-contribution scheme remains in place

Making a small non-concessional contribution continues to be compelling for those taxpayers eligible for the co-contribution scheme. If your total income is less than $51,021 for the 2016/17 year, and you make a non-concessional contribution to your super fund, the Federal Government will make a tax-free co-contribution to your super account. The maximum co-contribution of $500, on a $1,000 after-tax contribution, is payable if your total income is less than $36,021 for the 2016/17 year.
 
Superannuation guarantee rate at 9.5%

Superannuation Guarantee (SG) rules have not changed for the 2016/17 year. Under the SG laws, your employer must make compulsory superannuation contributions equivalent to 9.5% of ordinary time earnings to your super fund for the 2016/17 year. The current annual SG rate of 9.5% remains in place until 30 June 2021.
 
Contact Roger Thomson, our SMSF specialist, on 08 6274 6400 if you have any queries regarding the upcoming changes to superannuation.
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