Diamond Accounting

Capital gains on the sale of shares, property and other investments can be reduced by ensuring all eligible items are included in the cost base of the assets sold including the purchase price, capital improvements, stamp duty, legal costs, advertising expenses and commission fees, and by applying any available capital losses. You may be able to further reduce any net gain under the general 50 per cent discount where the asset sold has been owned for more than 12 months.

 The ATO is concerned that capital gains are not being included in tax returns. It has therefore significantly expanded its data-matching in the property and share areas by obtaining data on asset sales from all State / Territory Land Title and State Revenue Offices, the Australian Stock Exchange, share registries and managed funds. The ATO has also advised that it will examine around 6,000 at-risk cases this year including gains on sales where funds were later invested in superannuation. Hence, you should keep buy / sell contract notes for shares and all other purchase and sale agreements and receipts.

The ATO has also announced that it will deny capital losses where the loss on an asset has been applied to reduce some other capital gain, and thereafter the asset sold is either wholly or substantially re-acquired by that person.

Most people who donate are under the impression that a donation is always tax deductible.

However, donors can only claim tax deductions for gifts made to eligible gift recipients. Entities entitled to receive tax deductible gifts are called deductible gift recipients (DGRs). For a donor to claim a tax deduction for a gift, a gift must:

• be made to a DGR
• truly be a gift
• be a gift of money or property that is covered by one of the gift types, and
• comply with any relevant gift conditions.

When claiming tax deductions for gifts, a donor needs to know:

• how much to claim, and
• when to claim the deduction.

Examples of payments that are not gifts include:

• purchases of raffle or art union tickets
• purchases of chocolates, pens, etc
• the cost of attending fundraising dinners, even if the cost exceeds the value of the dinner
• membership fees
• payments to school building funds as an alternative to an increase in school fees, and
• payments where the person has an understanding with the recipient that the payments will be used to provide a benefit for the donor.

Tip: Ensure that when you are making a gift or donation that the organisation you are donating to is an eligible gift recipient.  If they are not a DGR, you will not be entitled to the deduction.

 Following recent changes, a self-employed taxpayer will be able to claim all their contributions to a complying superannuation fund as fully tax deductible up to age 75. Low-income earners may also be able to access the government co-contribution where the government makes a contribution of $1.50 for every dollar of personal contributions made by eligible taxpayers.

Applying for super co-contributions

You don’t need to apply for the co-contribution. All you need to do is:

• make personal super contributions (after tax) super contributions before 30 June to your super fund or retirement savings account (RSA)
• don’t claim a personal super contribution deduction for at least some of your personal contributions in your income tax return, and
• lodge an income tax return.

Once your super fund has reported your personal contributions to us, and you have lodged your income tax return, we can then calculate if you are eligible. If you are, we will automatically calculate the co-contribution amount and deposit it into your super account.

We make most payments between November and January each year as most contributions are reported to us by then.

If you don’t supply your TFN to your super fund or RSA, they cannot accept your personal contributions and you may miss out on a co-contribution.