Tag: strategy

superannuation services

Implications of the proposed $3M Super Tax

Posted on | by Allan Hall

Understanding the Implications of the Proposed $3M Super Tax

As the proposed tax on superannuation balances exceeding $3 million draws nearer, individuals potentially affected by this measure are urged to assess its implications thoroughly.

While not yet enacted into law, the Division 296 tax warrants careful consideration in investment strategies, especially concerning end-of-financial-year contributions into super.

  • For those affected, a strategic reassessment may be necessary, considering whether high-growth assets should be held within superannuation, given the potential tax implications
  • Individuals may need to reconsider investment vehicles, balancing tax effectiveness with asset protection
  • Estate planning and succession plans for Self-Managed Superannuation Funds (SMSFs) will require revisitation post-implementation of Division 296 to mitigate unnecessary tax burdens on beneficiaries.

Division 296 legislation proposes an additional 15% tax on investment earnings of super accounts with total super balances (TSB) exceeding $3 million at the end of the financial year.

It’s important to note that this extra tax applies only to the portion exceeding $3 million.

Key aspects of the legislation include the concept of Adjusted Total Super Balance (ATSB), which determines the $3 million threshold. The ATSB calculation by the Australian Taxation Office (ATO) considers the market value of assets regardless of realisation, significantly affecting super funds holding property or speculative assets. Additionally, the legislation introduces a new formula for calculating ATSB for Division 296 purposes.

Under Division 296, deemed earnings exceeding the $3 million threshold will be apportioned and taxed accordingly. Negative earnings in such instances may be carried forward to offset future liabilities.

For those unaffected by Division 296, super remains an attractive option for retirement savings. Making additional contributions prior to EOFY presents an opportunity to maximise savings through various avenues such as concessional and non-concessional contributions, salary sacrifice arrangements, and downsizer contributions.

The draft Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, introduced to Parliament in 2023 is currently under scrutiny by the Senate Economics Legislation Committee, with a report expected next month. If passed and granted Royal Assent, Division 296 will come into effect from July 2025.

This forthcoming regulation represents a substantial change to superannuation rules, particularly impacting members with significant account balances. Given its complexity, seeking professional advice is crucial for informed decision-making concerning super and wealth creation strategies in the upcoming years.

CONTACT ALLAN HALL SUPERANNUATION

Further reading

SMSF Association stands against new tax as debate looms
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cash in a hessian sack

SMSF record-keeping best practices

Posted on | by Allan Hall

ATO reminds SMSFs to keep good records

How self-managed super fund (SMSF) trustees can meet their responsibility to keep accurate tax and super records.

Keeping good records

Keeping good records is more than just knowing which records to keep and for how long. It involves having a system for organising and maintaining records that makes it easier for you, and any SMSF professional you use, to:

  • complete the fund’s independent audit each year
  • lodge your fund’s annual return.

It may also help reduce audit and administration costs for your fund.

To help keep your records organised, you may want create separate files for your fund’s more permanent records, and for records that relate to a specific financial year.

For example, in your permanent file you may want to keep:

  • the fund’s trust deed
  • the fund’s investment strategy
  • details of the regular reviews of the fund’s investment strategy, including the consideration of insurance for members of the fund
  • reasons for decisions on the storage of collectables and personal use assets
  • minutes of trustee meetings
  • all signed trustee declarations
  • records of trustees consenting to their appointment as a fund trustee
  • records of all changes in fund members and trustees.

As each SMSF is unique, with its own investment strategies to achieve its objectives, you should consult with a professional licensed adviser when setting up a record-keeping system that suits your fund.

Keeping all relevant records together will simplify the process of compiling the records you need to give to your fund’s independent auditor. If your fund regularly holds trustee meetings, you could create a separate folder for them, and sort them by date.

Take minutes of all investment decisions

You should take minutes of all investment decisions, including:

  • why a particular investment was chosen
  • whether all trustees agreed with the decision.

This is because if you, as one of the fund’s trustees, invest the SMSF’s money in an investment that fails, the other trustees could take action against you for failing to be diligent in your duties.

However, if your investment decision was recorded in meeting minutes signed by the other trustees, you will have a record to show that they agreed with your actions.

Signature requirements for financial statements

Under Australia’s super laws, SMSF trustees must sign their SMSF’s financial statements before finalising their annual audit. This includes an operating statement and a statement of financial position which must be signed by the required number of trustees or directors of the corporate trustee.

Minimum record-keeping requirements

The most important reason for keeping good records is that it’s a legal requirement for you to do so. You may also need to provide accurate records to us if we ask to see them.

You need to keep any SMSF records for a minimum of 5 years.

Despite what you may have heard or read elsewhere, you cannot access your super before you retire unless you meet one of the very few exceptions to this fundamental rule of super law. Read more »

CONTACT ALLAN HALL SUPERANNUATION

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international services

Expanding your business globally

Posted on | by Allan Hall

Five Key Strategies for Successful Business Expansion

Venturing into the global market with your small or medium-sized business (SMB) presents an exciting yet formidable journey. In this article, we delve into five crucial strategies to steer your SMB through new market entry without starting from scratch.

1. Thorough Research: Strategic Market Analysis

Before plunging into a new market, invest in extensive market research. Just like industry giants, SMBs can gather valuable insights to make informed decisions. Scrutinise the target market, study competitors and identify potential challenges such as industry regulations and demand forecasts.

2. Gradual Progress: Prioritise Success over Perfection

Avoid turning planning into procrastination. Keep the primary objective of business expansion in focus to prevent getting entangled in hypothetical scenarios. Prioritise incremental steps, adapt along the way, and ensure progress is not sabotaged by perfectionism.

3. Strategic Collaboration with Peers

Mitigate risks and pool resources by strategically collaborating with other SMBs in the target market. Consider forming alliances with complementary businesses and strategic partners who can assist with groundwork, and therefore accelerate your efforts.

TIP: Seek Professional Guidance from Allan Hall’s International Services Team »

If you are an international business looking to start up in Australia, or an Australian business looking to expand overseas, Allan Hall has a highly skilled and experienced team in International Services. We collaborate with you to develop strategic solutions tailored to your business so you can respond to global opportunities and take on challenges in your chosen region.

4. Foster Visibility: Network for Success

Although networking may seem time-consuming, it is crucial for boosting company visibility and adapting to new markets. Leverage digital platforms to intentionally network, gaining access to opportunities and building relationships. Seek mentorship from successful SMBs in your target market to tap into their expertise on local markets and cultural nuances.

5. Vigilance Over Complacency: Embrace an Adaptive Approach

When considering entry into a global market, learn from the missteps of others. Major multinationals face challenges, and online examples serve as cautionary tales where inadequate localisation efforts led to struggles. However, setbacks faced by others should not be seen as predetermined for your venture. Maintain vigilance and adaptability to navigate unforeseen challenges not initially considered.

Helping international businesses seize global opportunities and minimise risk

We live in an entrepreneurial and globalised market and many businesses are expanding internationally. Businesses entering a new market need to be aware of the differing laws, regulations and customs that govern business in a foreign country. If you are an international business looking to start up in Australia, or an Australian business looking to expand overseas, Allan Hall can assist.

CONTACT ALLAN HALL INTERNATIONAL SERVICES

businesswoman

Considering Redundancies in your business?

Posted on | by Allan Hall

Recent research has found that almost a third of employers intended to make staff redundancies.

Australian HR Institute’s quarterly Australian Work Outlook survey indicated that redundancy intentions have risen sharply to 31% in the December 2023 quarter, up from 17% in the September 2023 quarter.

In correlation with this research, our consultants at Allan Hall HR have recently been experiencing daily calls from clients requesting support and advice on employee redundancies. 

If you are one of these employers considering redundancies in your business, we have outlined below the key components for you to consider. We also highly encourage you to seek professional guidance to help navigate a smooth and legally compliant redundancy process.

Regardless of whether your employees are award covered or not, redundancy terminations are highly complex, and the specific circumstances of each case must always be considered. There are several rules that apply and steps you should take when managing a redundancy to ensure compliance and reduce your risk of receiving a claim (such as an unfair dismissal claim). 

Redundancy Considerations

If you are planning to make an employee redundant, it is important for you to ensure that:  

  • You have taken steps to ensure you no longer require the person’s role to be performed by anyone 
  • All reasonable attempts have been made to find suitable alternative employment within the business for the employee
  • You have considered and complied with any applicable modern award obligations
  • You have undergone a consultation process which is best practice and a requirement under some awards  
  • You have prepared for, documented and communicated the redundancy process thoroughly
  • You pay the employee correctly according to their redundancy entitlements under the National Employment Standards, calculated with reference to their period of continuous service

Allan Hall HR’s Redundancy and Advice Package

At Allan Hall HR we have developed a Redundancy and Advice package which provides employers with an assortment of tools and resources to assist with undertaking a legally compliant redundancy process. The pack includes: 

  • Letter of Notice to the Employee (regarding proposed workplace changes and an invitation to a consulting meeting)
  • Guidance on Consultation Steps and Meeting Discussion Points
  • Redundancy Checklist and Consultation Record
  • Communication Strategies
  • Termination Letter due to Genuine Redundancy. 

If you wish to purchase our Redundancy and Advice Package, please click here.  We are also able to manage all or part of the redundancy process for you, according to your preference. 

Need Assistance?

Before you consider terminating an employee on the basis of redundancy, we encourage you to call us on 1300 675 393 or contact us here.  To learn more about our HR services, please click here.

Refinance Home Loan

Unlocking the Potential of Mortgage Refinancing

Posted on | by Allan Hall

Are you considering refinancing your mortgage but unsure whether it’s the right move for you?

When it comes to refinancing, it’s not just about securing a better interest rate; it’s a strategic financial decision that can have a significant impact on your financial well-being.

At Allan Hall Finance, we understand the intricacies of the mortgage market and are here to guide you through this journey. Here’s why you should consider reaching out to us when contemplating a mortgage refinance.

1. Interest Rate Matters

One of the most common reasons people explore mortgage refinancing is to secure a better interest rate. If you haven’t reviewed your current rate in the last 6-12 months, there’s a good chance you’re paying more than you should be. A lower interest rate can lead to substantial savings over the life of your loan.

2. Consolidating Debt

High-interest debts, such as credit cards, personal loans, or car loans, can take a toll on your finances. Refinancing your mortgage offers an opportunity to consolidate these high-interest facilities into a single, lower-interest loan. This not only simplifies your financial management but also reduces your overall interest expenses.

3. Adapting to Change

Your financial situation and goals are dynamic. If you’ve had your mortgage for a while, the equity in your property may have increased. Lenders often offer better terms to borrowers with higher equity. It might be the perfect time to tap into that equity for future investments or other financial needs.

4. Consider the Costs

While refinancing can be a great way to save money, it’s important to consider the costs involved. These typically include new lender application fees, valuation fees, discharge fees, break fees (if you’re on a fixed rate), and legal/settlement fees. Our experienced mortgage brokers at Allan Hall Finance can help you assess whether the potential savings outweigh these costs.

At Allan Hall Finance, we’re dedicated to helping you make informed decisions about your finances. We understand that each situation is unique, and the right refinancing strategy should align with your specific needs and goals.

Don’t let the complexities of refinancing hold you back from potentially improving your financial situation. Please reach out to Allan Hall Finance on 02 9981 2300 or [email protected] and let’s explore how refinancing can be a strategic move toward financial freedom.

Why use a Recruiter

5 tips to recruit quality employees in the current job market

Posted on | by Allan Hall

Attracting and retaining suitable talent—

With global labour shortages presenting huge challenges for employers, many of our clients have reported significant difficulties during the past 6-12 months in attracting and retaining suitable employees.

Our team at Allan Hall HR has seen a large increase in requests for support in recruitment during this time and has put together some tips to help you recruit in the current market.

The employment situation in Australia

Whilst the extent of the labour shortage differs across regions and industries, with healthcare, manufacturing and supply chain industries experiencing the greatest impact, it is undeniably currently one of the biggest challenges employers are facing globally.

The Covid-19 pandemic has resulted in the following factors affecting the labour market:

  • migrants returning to their home countries,
  • a reduction in available international graduates, and
  • border closures resulting in fewer working-holiday visas.

Australia is currently experiencing a record low unemployment rate of 3.5% (ABS, July 2022). Due to the labour and skill shortage, wage costs in some sectors, such as IT, are rising between 20% to 50%, with employers having to boost salaries to attract and retain staff.

As a result, the number of jobs advertised has significantly increased. ANZ job ads data for April 2022 revealed that the number of job ads was up 26.3% from a year earlier at 242,536. They were 57.3% higher than the pre-pandemic level in February 2020 and SEEK data shows they remain significantly higher than pre-pandemic levels.

Five things employers can do to attract great candidates

To help you stand out from the crowd and attract and retain quality staff in this current market, our HR team offer the following tips:

1 Focus on your Employee Value Proposition

Distinguish yourself from your competitors and be clear on your selling points to attract new talent. How do you differ from other organisations and what benefits do you offer? What are your points of difference and why would a prospective employee want to work for you? For example, do you offer a hybrid working model / flexibility to work from home? Do you pay over the market rate for the position? Do you have an outstanding culture that current employees value? Does the company provide clear, defined opportunities for career progression?

Ensure you retain a strong focus on your current employees and offer and communicate these aspects to your existing employees to remind them of the key benefits of continuing to work within your organisation.

2 Deploy targeted search strategies

For many roles in the current market, it is now rare to simply advertise and have people apply. It is important to identify where the top talent is currently working and proactively reach out to prospective employees from these organisations with the key selling points from your Employee Value Proposition.

Utilise your network and professional networking tools, such as LinkedIn and other social media platforms.

Encourage existing employees to help you with your search for top talent and consider devising an employee referral program to incentivise this.

3 Understand salary expectations in the current market

Salary benchmarking and reviewing current remuneration ensures your offering is competitive to the current market. Salary benchmarking is a useful tool in attracting new talent and reducing staff turnover.

4 Grow your own talent

Employing graduates or school leavers is a great way to grow talent specific to your business needs. Recent graduates can bring an exciting and fresh perspective to your workplace.

5 Consider engaging recruitment specialists with access to a broad database of potential candidates and targeted sourcing tools

Our Allan Hall HR team have a team of highly skilled recruitment, search and marketing specialists who are supported by our HR consultants, to apply a holistic approach to your HR and recruitment needs. We can assist with recruitment activities across Australia including:

  • creating an employee value proposition
  • salary benchmarking
  • premium and targeted candidate search 
  • employee referral schemes
  • psychometric testing of potential candidates to help in your hiring decisions and ongoing development of employees
  • staff retention strategies
  • structured onboarding support 

As per your tax and accounting support at Allan Hall, you only pay for the time spent, together with any direct advertising costs.

Our recruitment team at Allan Hall HR would love to discuss your needs, and how we can best assist your organisation. We are equipped with a range of resources and strategies suited to the current labour market; including a solely dedicated headhunting team, premium-level access to targeted recruitment and social media platforms including LinkedIn, and a targeted graduate recruitment team.

For more information, please get in touch with our friendly team at Allan Hall HR at [email protected] or call 02 8978 3743.

Why Insurance matters banner

Why does insurance matter?

Posted on | by Allan Hall

The unexpected events of the past few years, have made financial protection a front of mind matter for most Australians.

Now more than ever we appreciate that life does not always go the way we plan. Having a plan in place if things do take an unexpected turn can mean that our health, lifestyle and family are better protected.

If you don’t have any type of personal insurance cover, or you have not reviewed it with your Financial Adviser for a while, now is a good time to do so.

Types of insurance

There are a few different types of insurance that you should consider, based on what matters to you and what you would most like protected if you were to suffer an illness, injury, disablement or premature death. It’s best to discuss insurance options with your Financial Adviser as they can tell you what different types of insurance policies are available, what they cover, and how to structure them in your overall financial plan, based on your individual situation and goals.

The types of insurance policies you may discuss are:

  • Life insurance
  • Total and Permanent Disablement insurance
  • Critical illness insurance also called Trauma cover
  • Income Protection insurance.

The benefits of an insurance policy

FAMILY FIRST

You and your loved ones count on your income to enjoy a certain standard of living, which is why insurance is particularly important if you have dependents. It means the people who matter most in your life are protected from financial hardship if your income stopped.

LESS STRESS

Profound unforeseen illness, injury, permanent disability, and death –are not nice to think about but these events happen. If it happened to your family it would probably be an extremely challenging time, wrought with emotional stress, and even grief. With personal insurance in place, the financial stress can be reduced, allowing you to focus on getting well, and rebuilding your life.

FINANCIAL SECURITY

Illness, injury and disablement do not come cheap. If you needed funds to recover from illness or injury would you have enough disposable income to cover medical bills whilst still paying your household expenses? Could you modify the home if need be? Would you want access to the best medical cover, treatments and rehabilitation options?

Insurance provides financial security so your life can continue with as much normalcy as possible, whilst you seek the best care available.

At a time when everything else seems out of control, it is good to know your financial security isn’t!

The difference a Financial Adviser can make

Data collected by APRA found that in the case of Total & Permanent Disability cover, the “claim declined” rate was around double for claimants who arranged their cover direct with the insurer than for claimants who went through an adviser. In other words, you have a much greater chance of success with an adviser.[1]

A Financial Adviser looks at your specific circumstances, your lifestyle, goals and appetite to risk. Together you can discuss personal insurance policies, tapping into their expert knowledge and understanding of the requirements of insurance providers. You can also discuss options for holding insurance inside and outside of superannuation and, should you need to make a claim on a policy, your Financial Adviser can liaise with insurance companies and superannuation entities on your behalf as your advocate.

If it’s time to consider personal insurance cover, or you want to review your existing policy, a Financial Adviser is willing and able to assist you.

CONTACT US

General Advice Warning

The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Mark O’Connell, Robin Bell and Allan Hall Financial Planning Pty Ltd are Authorised Representatives of Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323.

[1] APRA: Life insurance Claims and Disputes Statistics, June 2021 (issued 19 October 2021)  

Is super worth the hype?

Is Super Worth the Hype?

Posted on | by Allan Hall

As Financial Advisers we talk about superannuation a lot.

So much so that it probably becomes a fuzzy word people don’t even hear any more. And the younger you are, the less interested you probably are. 

But superannuation is super important. It is likely to be the biggest investment you will have in your lifetime, unless you own a mortgage-free home.

It’s also what will keep you afloat when you retire – which for some of us is a choice, for others it’s a choice made for us due to illness, or the inability to continue to carry out our normal work duties or due to financial hardship.

Without a regular deposit of wages or salary into your bank account, how will you afford to pay your bills, buy food and clothes and keep your car running? Have you have been lucky and wise enough to establish a few back-up options during your working years? 

The Association of Superannuation Funds of Australia’s (ASFA) estimate of how much money you’ll need in retirement, depending on your lifestyle is in the table below. This is how much it estimates you need to have every single year you are retired.

ASFA Retirement StandardAnnual living costs
Couple – modest$40,829
Couple – comfortable$62,828
Single – modest$28,254
Single – comfortable$44,412
Source: ASFA Retirement Standard, for those aged around 65 (March quarter 2021, national)

There are also guidelines for the lump sum couples and singles need sitting in their superannuation account upon retirement for a comfortable lifestyle. These guidelines assume that the retiree/s will draw down all their capital, and receive a part Age Pension – which not everyone is eligible for, so it’s recommended you speak to your Financial Adviser about your situation.

CategorySavings required at retirement
Couple – comfortable$640,000
Single – comfortable$545,000
Source: https://www.superannuation.asn.au/ArticleDocuments/269/ASFA-RetirementStandard-Summary-2018.pdf.aspx?Embed=Y All figures in today’s dollars using 2.75% AWE as a deflator and an assumed investment earning rate of 6 per cent

If you know what your superannuation balance is currently, how old you are and approximately how many working years are left, you can use the above tables to figure out how you are tracking in terms of reaching a comfortable super balance to live a comfortable retirement lifestyle. Keep in mind these are averages and estimates. You, as an individual, may have higher needs, greater expectations of your retirement lifestyle, a desire to retire early or be disadvantaged by not receiving super when you have taken time out of the workforce to have children – all of these factors will impact the amount you will need tucked away in superannuation.

With all this information, what can you do about increasing your superannuation balance so you hit your target by retirement age? If you are currently employed you would be receiving the super guarantee from your employer which for many years was paid at 9.5% of your salary (unless you have an employer that pays above minimum, lucky you!) and rose to 10% on 1 July 2021. It is set to rise again to 10.5% on 1 July 2022.

In addition to the superannuation guarantee there are other options you can consider if you are eligible such as government co-contributions to super, spousal contributions, contribution splitting and the low-income super tax offset. Your Financial Adviser can have a conversation with you about how these strategies may help you increase your super balance.

Hopefully, this article has provided some useful information, and you’re hyped up to take greater notice of your super balance because when your working days are over, it’s going to really matter to you.

If you would like to discuss super strategies, or review your financial plan, we would love to hear from you.

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General Advice Warning

The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Mark O’Connell, Robin Bell and Allan Hall Financial Planning Pty Ltd are Authorised Representatives of Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323.

dice rolls six 6

Increase in SMSF Membership

Posted on | by Allan Hall

Increase in SMSF membership receives royal assent

Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020 received royal assent on 22 June 2021.

From 1 July 2021, self-managed super funds (SMSF) and small APRA funds (SAFs) will be able to have up to six members.

If you are considering expanding your fund, you will need to consider things such as what your fund’s trust deed allows, the structure of your fund and its reporting requirements.

Some State and Territory laws restrict the number of trustees a trust can have. Because an SMSF is a type of trust, your fund may be impacted by these restrictions. To avoid this issue, you can set up your SMSF with a corporate trustee and each member as a Director of the corporate trustee.

The ATO is currently implementing the necessary system changes to enable SMSFs to add members five and six to their fund through the Australian Business Register (ABR). We recommend you wait until the ABR is updated before you register or update your fund with more than four members.

If this is not possible, an interim solution will be available from 1 July 2021 and can be used to add a fifth or sixth member.

It is important to seek professional advice and check State or Territory law restrictions before registering or expanding your fund.

Contact our Allan Hall Self-Managed Superannuation team if you would like some help on 02 9981 2300.

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General Advice Warning

The information in this brochure is of a general nature only and does not take into account your personal objectives, financial situation or specific needs.  We recommend that you consider your own financial position, objectives and requirements and seek advice from an authorised financial adviser before making any financial decisions. 

Allan Hall Business Advisers Pty Ltd is a Corporate Authorised Representative of Allan Hall SMSF Advisory Pty Ltd ABN 71 608 966 276 AFSL 485203. Allan Hall Financial Planning Pty Ltd is an Authorised Representative of Consultum Financial Advisers Pty Ltd  ABN 65 006 373 995 AFSL 230323.

Source: ATO