Whether it be course and tuition fees, professional and trade journals, textbooks, airfares, accommodations or meals…there are potentially a wide range of expenses that may qualify as deductible for self-education purposes. However, there are key hurdles that must be cleared. First, the self-education must maintain or improve your current skills or knowledge. Alternatively, the self-education must lead to or be likely to lead to an increase in income from your current income-earning activities.

Meanwhile, it’s important for investors and other holders of CGT assets (such as rental properties, shares, land, units in a unit trust etc.) to have a general understanding of the 50% CGT discount. This discount allows a 50% discount on a capital gain where an asset is sold after being held for 12 months or more. Most entities (excepts companies and non-residents) are eligible. To meet the 12-month requirement you may wish to retain an asset for longer than you otherwise had planned.

Sometimes promoters of schemes target self-managed super funds (SMSFs). Schemes can include tax avoidance arrangements that inappropriately channel money or assets into your SMSF so you pay less tax. They may also include arrangements promoting the illegal early release of benefits from your fund for personal use. If you have been approached you should check the ASIC Financial Register to make sure the promoter has a financial licence.

This edition features pieces on:

• Registering a trademark for your business: A trademark legally protects your brand and helps customers distinguish your products or services in the market from others. Trademarks can be used to protect a logo, phrase, word, letter, colour, sound, smell, picture, movement, aspect of packaging or any combination of these. Have you considered registering one? Do you know how?
• Appointing an SMSF auditor: Early last month, the ATO issued a reminder around auditors.  If you have an SMSF, You need to appoint an approved SMSF auditor for each income year, no later than 45 days before you need to lodge your SMSF annual return (SAR). Your auditor will perform a financial and compliance audit of your SMSF’s operations before lodging. Approved auditors must be registered with ASIC.
• Purchasing and maintaining a caravan/motor home for work-related travel: In these challenging and changing times, many have jumped on the modern version of the proverbial band wagon and purchased a caravan or motor home to use for work or business-related travel. We explore the tax treatment of this scenario including where you have a business logo on the side on your van or motor home.
• Self-education: It’s not uncommon for individuals to change careers, seek a promotion, top-up their current skills or knowledge etc. In doing so, they may incur significant self-ed expenses. However, there are certain criteria which must be met before these expenses become deductible.
• 50% CGT discount: This can effectively halve any capital gain that you make when you sell a CGT asset including land, rental properties, shares etc. However, the asset must be held for 12 months or more. Most entities are eligible with the main exclusions being companies and trusts.
• Beware of SMSF scheme promotors: Don’t be tempted by ‘too good to be true’ SMSF schemes promoted by an advisor you don’t trust and who isn’t on the ASIC Financial Register. You may risk losing some or all of your retirement savings and receive significant penalties if you enter into one of these schemes.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

ATO Key Dates
To view the ATO’s key dates for September, please click here.