Dewings directors in Kuala Lumpur with ACMA

Dewings directors Kathy Allen and John Manning were recently in Kuala Lumpur with the Australian Chinese Medical Association SA (ACMA-SA), presenting at their Annual Scientific Meeting.

We're sponsors of ACMA-SA and thoroughly enjoy our involvement with such a wonderful group of medical professionals. Every ACMA-SA event usually involves plenty of laughs and a lot of good food, and the recent scientific meeting held over Easter in Malaysia's capital was no exception!

But it was also a time for professional development, and we were asked to present on "Strategies to Improve and Protect Doctors' Financial Wealth", in conjunction with lawyers Piper Alderman.

We summed up our thoughts in five 'Tips and Traps' for preserving and enhancing doctors' financial well-being. Depending on whether it was a tip or a trap, these are things that we often see as either financial best practice, or actions that can undermine optimum wealth creation, from a tax and business perspective.

Issues covered included the need to use business structures better (also in our latest newsletter), the additional responsibilities in managing risk for more sophisticated arrangements, providing securely and responsibly for children, adapting estate planning to the more complex needs of higher wealth individuals, and knowing what is in your documents (such as trust deeds, partnership agreements, etc.).

These tips and traps are relevant for anyone in business looking to grow and protect their wealth, and we'll touch on a few of them in more detail in the upcoming weeks and months.

The formal presentation was followed by a panel discussion where both the Dewings and Piper Alderman teams threw themselves and the mercy of questions from the floor. The brief was simple - ask anything relating to the business and legal affairs of doctors in practice.

We're proud of our association with ACMA-SA, and thank them for putting on another great conference. We're also pleased to have had the opportunity to share our expertise and demonstrate the difference that great business advice can make.

Posted: April 30, 2014 | 0 comments

ATO launches amnesty initiative for undisclosed foreign income

The Tax Office has announced that it will commence a global crackdown on unreported foreign income.  This includes those taking advantage of international 'tax havens'.

It has, however, also declared an amnesty until 19th December 2014 for voluntary disclosure. As long as they don't detect the activity themselves, those who come forward and voluntarily declare any offshore income can do so without fear of steep penalties and possible criminal prosecution.

The Tax Office is using increasingly complex data matching techniques to track undisclosed foreign income, and enlists the cooperation of many overseas jurisdictions, including some that were previously considered to be safe havens, like Switzerland for example.

Income being targeted includes:

  • foreign income or a transaction with an offshore structure
  • deductions relating to foreign income that have been claimed incorrectly
  • capital gains in respect of foreign assets or Australian assets transferred offshore
  • income from an offshore entity that is taxable in your hands.

Called Project DO IT (caps not ours), the disclosure process requires the completion of a form which then must be lodged with the Tax Office.

If you think you may be affected, you can find more information, and a link to the disclosure statement, here.

Posted: April 07, 2014 | 0 comments

Last log book more than five years ago? You need to keep a new one

The so-called 'log book method' is a popular way of claiming car expenses for tax purposes. Taxpayers are required to keep a log book for a minimum continuous period of 12 weeks, recording every business journey during that time. For each trip, certain details are required, such as the date of the trip, the odometer reading at the beginning and end of the journey, how many kilometres were travelled and what the journey was for. Once this is completed, the business kilometres are then calculated as a percentage of the total distance travelled over that time, and that percentage is then applied to all expenses related to the motor vehicle. So for example, if your business use percentage is 65% and you buy $100 worth of petrol, you can claim $65 for tax purposes.

For many taxpayers this is where it ends. They now have their business use percentage and this is applied every year into the indefinite future.

What is often missed though is that it is a requirement of the log provisions that a new log book be kept at least every five years.

This is not a recommendation but rather is mandated for a log book to be valid. Once five years has passed, the original log book can no longer be used and the log book method is therefore unavailable for claiming motor vehicle expenses unless a new log book is kept. A taxpayer would then have to revert to one of the other available methods for claiming, which may produce a less favourable result.

So it's essential that you keep a new log book at least every five years, and in fact we recommend completing a new one any time you believe that your usage is likely to vary by 10% or more.

The good news though is that that your log book only needs to be commenced during a financial year in order for it to be valid for the current period. That is, the 12 week period does not need to end by 30th June to make a claim using it for that year, as long as you start keeping the log book any time before 30th June.

With the end of the financial year fast approaching, it's probably a good idea to think about when you last kept a log book. If you think it may have been more than five years ago, and you want to continue using the log book method to make a claim this year, you can start keeping a new log book now (or any time before 30th June) and it will still be valid for this financial year.

It’s also important to remember if you are using the log book method that you must record your odometer reading at 30th June every year. Why not put a reminder in your diary now?

You can read more about the specific requirements for keeping a log book here.

Posted: April 04, 2014 | 0 comments

The latest news from Dewings

In our latest newsletter, we look at the benefits of an advisory board in helping to grow and develop a business, we take another look at car parking fringe benefits, and profile Margaret's recent trip to Cambodia.

You can read the full version here.

Posted: April 01, 2014 | 0 comments