Firm Journal

Defining business values

Business values, much like personal values, influence behaviour and provide a set of rules or guidelines to follow. However, in a business context, values are often set and ignored.

To avoid this, business leaders need to create values that can lead to action and align with the business’ overall mission. Consider the following when defining your business’ values:

Assess business strengths
Look at the ways in which your business thrives – do you have ambitious staff or loyal customers that drive your success? Understanding your business’ strengths allows you to identify the underlying values which drive current behaviour and action. Once you have a better understanding, you will be able to identify key values that your employees, customers, suppliers and community encompass and use these values as a basis for your business.

Formulate rules based on values
Once you have identified your key values, you can create rules based on these values so staff and the public know what to expect of your business. For example, your rule might be to “continually search for answers.” This would align with a value of innovation, placing a great emphasis on building on new ideas and solutions. Rules also help to foster the right culture in your workplace, making it more enjoyable for staff and management alike.

Tie values to your overall purpose
Values should be used to complement your business’ overall mission or purpose. For example, if your mission is to provide education to rural teenagers in disadvantaged areas, adopting a rule such as “continually search for answers” would be appropriate as it encourages everyone involved in the business to look for new ways to meet challenging demands and so on. Therefore, identifying values helps to align strategies, plan and create goals that serve your business’ overall purpose.

Posted on 16 March '18 by , under business. No Comments.

Eligibility for the downsizer measure

As of 1 July 2018, the Government will introduce a new measure that allows the contribution of up to $300,000 of proceeds from downsizing a home to be added to superannuation.

The new measure will benefit those aged 65 years and over, provided they meet certain eligibility rules including:

  • The amount you are contributing is from the proceeds of selling your home where the contract of sale was exchanged on or after 1 July 2018.
  • Your home was owned by you or your spouse for 10 years or more prior to the sale.
  • Your home is in Australia and is not a caravan, houseboat or other mobile home.
  • The proceeds from the sale of the home (capital loss or gain) are exempt or partially exempt from CGT under the main residence exemption, or would be entitled to such exemption if the home was a CGT rather than pre-CGT asset.
  • You have provided your super fund with the downsizer contribution form either before or at the time of making your downsizer contribution.
  • You make your downsizer contribution within 90 days of receiving the proceeds from the sale (usually the date of settlement).
  • You have not previously made a downsizer contribution to your super from the sale of another home.

Posted on 16 March '18 by , under super. No Comments.

Tax tips for property investors

Property investors can access a wide range of tax deductions and items subject to depreciation for their rental property yet many miss out on unknown tax breaks, foregoing an average of $20,000 a year on a $1 million house.

Here are four ways to maximise your tax deductions while complying with the tax office:

Use a quantity surveyor

Registered quantity surveyors can establish the value of purchased items and building construction costs by preparing depreciation schedules to maximise an investor’s claim.

Items as diverse as kitchen equipment, bathroom fittings, outdoor furniture, air conditioning and swimming pools are all legitimate claims. A quantity surveyor will ensure valuations of the items in the building are at market value, avoiding the need to explain any valuations that are higher than expected to the ATO.

The cost of using a quantity surveyor is also tax deductible.

Apportion expenses

It is common for investors to bundle a mix of properties under one single loan, i.e. the family home and a rental property may be funded by the same mortgage and expenses apportioned accordingly. However, having separate loans can increase deductions as the non-deductible debt can be paid down or even better linked to an offset account, with the deductible loan having full interest paid and claimed.

Immediate write-offs

An immediate write-off applies to items worth less than $300 and can be claimed in the current income year. Items such as garden gnomes, kitchen cutlery and ironing boards, irons are easily forgotten and all can be written off in the first year.


Construction costs can generally be ­depreciated at 2.5 per cent each year over 40 years for residential properties built after July 1985. This entitlement passes from one owner to the next whenever the property is sold. A quantity surveyor can provide an estimate if information is not available.

Many high value household items are now deducted using the “diminishing value method”, which means the most depreciation happens in the first few years. For example, ducted heating worth $4941 would have a first-year deduction of $493, rising to $2022 over the first five years.

Adding items such as solar lights, garbage bins, garden sheds, intercom systems and closed-circuit television systems to a low-value pool can open up ways to depreciate items at a higher rate, therefore, increasing immediate returns.

Posted on 16 March '18 by , under tax. No Comments.

Setting up your SMSF correctly

Setting up your self-managed super fund can be a daunting process; you want to ensure you are covering all legal requirements throughout the process.

The Australian Taxation Office has outlined steps to take when setting up your SMSF to ensure you are eligible for tax concessions, able to receive contributions and looked after if a trustee is unable or decides they no longer wish to be the active trustee.

When setting up your SMSF, you ought to consider the following:

  • Whether you wish to appoint a professional financial advisor to help you. If you do not have any experience with super regulations, this is a wise approach. Laws and regulations are constantly changing, and it is safest to work with someone who knows what they are doing.
  • Decide whether to have individual trustees or a corporate trustee. Generally, a corporate trustee structure often costs more money to set up but removes individual liability as the SMSF acts under the company’s name.
  • Ensuring all SMSF members sign a trustee declaration within 21 days of becoming a trustee or director of the corporate trustee.
  • Tax File Number (TFN) and an Australian Business Number (ABN). You will then need to provide the ATO with each members’ TFN so that they can receive appropriate tax concessions.
  • Ensuring a trust deed is created and is a legally-recognised document signed by all SMSF members. The trust deed needs to discuss how to establish and operate the fund.
  • Fund must be registered with the ATO. You should also elect the fund to be regulated by the ATO.
  • Set up a bank account for the SMSF and an electronic service address.
  • Prepare an exit strategy. This should include details pertaining to the process for appointing an individual as an enduring power of attorney.

Should you follow all of these steps, the SMSF you are setting up will be compliant with SMSF regulations. Once these aspects are considered, you need to make sure all SMSF trustees are compliant with super and tax laws. These laws are often being updated, so staying educated on current compliance issues is paramount to the success of the SMSF.

Posted on 9 March '18 by , under super. No Comments.

Work-related expenses

The Australian Taxation Office is continuing to pay close attention to claims made as ‘work-related expenses’ throughout 2018.

Making incorrect claims of work-related deductions can land you in hot water with the ATO, and thus it is important you can justify these claims. In order to claim correctly, you must be able to show that:

  • You spent the money yourself and were not reimbursed.
  • The expense was directly related to earning your income, and
  • You have appropriate records and documentation to prove it.

If you are making a claim for an expense that you use for both business and privately, you may only claim the portion of the expense that was related to business.

Posted on 9 March '18 by , under tax. No Comments.

Handing the family business over to your kids

Keeping the business in the family when you decide it’s time to retire is a common choice for many business owners. However, ensuring the change of hand is carried out effectively is seldom done right.

If you plan on handing your business over to your child/children or any other family member, there are specific precautions you should take to ensure that the process you use is not only compliant with Australian business and taxation laws, but so that the business model is protected in a way that you so wish.

Consider the following:


When changing ownership of any business, to family or someone else, having meetings to discuss various aspects of the changeover helps create a seamless change. Meetings should be periodic and should not be over complicated by discussing too many aspects of the changeover at once. You should plan out what will be discussed in each meeting when you decide you are going to change over ownership.


When changing ownership of a business, it is always wise to consider doing so in a transitional manner. By using a transitional approach, it allows you to teach your children the ways of the business and the correct process of doing various tasks, in order to keep the business running the same as it always has. This makes the change easier for customers and clients. After the transition has taken place, they can choose to make changes to the business model that they think will improve the business, but they will be doing so with an appreciation and understanding of why things have been done the way they have in the past.

Know the boundaries

One of the biggest obstacles of handing your business over, particularly to your children is mentally preparing for what this change will mean. A common mistake many business owners make when handing the business over is thinking they are still in charge; this is not the case. By overstepping the boundaries and trying to be over-involved after you no longer own the business, you can cause conflict between yourself and your child, which will inevitably impact negatively on the business. You need to respect your child as a business owner and let them run the business on their own. Of course you can be there as a soundboard and offer advice should they need it, but anything more can become overbearing. To avoid doing this, you need to prepare yourself for what no longer owning the business will mean; how are you going to fill your time that used to be spent working?

Posted on 5 March '18 by , under business. No Comments.

Common SMSF mistakes to avoid

Running a self-managed super fund can be a great strategy for your super and your retirement, provided you manage it correctly.

To ensure you can enjoy the later stages of life and retire comfortably, you will need to be aware of common SMSF mistakes and how to avoid them.

Record keeping

Bad record keeping when it comes to SMSFs is very common and very problematic. If the ATO decides to look into your SMSF and your record keeping is subpar, you and the rest of the members of the fund could land themselves in hot water. Good record keeping practices are a great preventative measure for being liable for fines and penalties should the ATO choose to investigate the fund. It is also a great habit to get into as proper documentation makes all decision making regarding your fund much more legitimate.

Financial assistance or loans to members

By law, you cannot loan or offer financial assistance to a member of the self-managed super fund at any time, either directly or indirectly. Many members entertain the mindset that because it is their money, they can allocate loans to other members and to themselves, but this is not the case. Should the ATO catch a member of an SMSF doing this, they will face harsh penalties. They may also lose all concessional tax benefits, which impacts the whole fund and not just the guilty member.

Contribution cap

According to the Australian Taxation Office, if a member of a self-managed super fund makes a contribution or their contributions in any given financial year exceed the contribution caps, they may be liable for an additional tax on the excess contributions. As of 1 July 2017, the contribution cap for all members of an SMSF regardless of age is $25,000 which is taxed at a rate of 15 per cent. If members contribute over this amount, they could be taxed at 47 per cent on additional contributions.


For the most part, most mistakes or errors surrounding your SMSF and the management of the fund can be avoided if you and the other members in the fund educate themselves on rules, regulations and strategies to remain compliant. With the internet available virtually everywhere, you can always read up on and stay up to date with ways to run the SMSF effectively. Just beware of where you are getting your information from and ensure it is a trustworthy site. You can also always speak to your financial advisor for guidance and advice.

Posted on 5 March '18 by , under super. No Comments.

Tax deductible legal expenses

While we like to think of business ventures as a platform to make money, there are also many expenses that will be incurred through running one.

Luckily, there are many tax deductions a business owner can claim when it comes to the expenses their business incurs, in particular their legal expenses. Understanding what these tax deductible expenses are and how to apply for these deductions appropriately can see you save a considerable amount of money, which can be transformed into profit.

Specific expenses incurred will or won’t be deductible depending on whether the expenditure is capital, domestic or private in nature. The following expenses are not deductible under regular legal expense deductions, due to being either capital or private in nature. Deductions can be claimed under a separate provision. These include:

  • Preparations of income tax return
  • Obtaining professional tax advice
  • Borrowing expenses
  • Mortgage discharge expenses
  • Preparation of leases

The circumstances in which legal fees incurred can be easily deducted for tax purposes, provided the correct procedure is followed and appropriate criteria is met, include the following:

  • Defending wrongful dismissal action, defending defamation action brought against a company board and defending unauthorised use of trademark.
  • Pursuing claims for workers’ compensation.
  • When negotiating current employment contracts with existing employees.
  • Recovering misappropriated business funds.
  • Arbitration when settling disputes.
  • Recovering wages of an employee due to a dishonoured cheque.
  • Evicting a rent-defaulting tenant.
  • Opposing certain neighbourhood developments.

Tax deductions on the above listed legal expenses are a guide, and will be determined on a case by case basis, depending on the specific circumstances relating to each case.

There are also a number of situations in which legal expenses are commonly incurred and are not tax deductible, including the following:

  • When negotiating employment contracts with new employees.
  • Defending charges of various natures, including and not limited to driving charges, sexual harassment charges, racial vilification or discrimination charges.
  • Negotiates concerning redundancy payouts or fees incurred through seeking to increase the amount of any redundancy payout.
  • Evicting tenant/s whose term had expired.

The ATO sets out clear guidelines of the appropriate documentation needed in order to claim deductions from legal expenses. Generally, documentation needed includes:

  • Completed relevant private ruling form or completed relevant objection form.
  • Reasons and circumstances concerning legal expenses incurred.
  • Documentation detailing the circumstances of the legal expenses, such as court documents.
  • Explanation of how the expenses are relevant to gaining or producing of assessable income.
  • Details concerning actions taken to recover costs from the other party.
  • Details of payments made as a result of the legal issue.

Posted on 5 March '18 by , under tax. No Comments.

Managing risks associated with investing

Whenever or however you choose to invest, there will always be risk involved. Luckily, there are strategies you can adopt to manage this risk in the best way possible for you and your investment goals.

Unfortunately, volatility in financial markets can cause an investor to lose their confidence. The Australian Government has provided Australians with a number of tips on how to minimise the risks involved in investing, to ensure they remain confident and their investments stay strong.

Consider the following:

Set goals

Goal setting is particularly important in a volatile market. Without a plan in place, when the market drops, an individual can be quick to panic and pull their money out. Reacting like this can cause you to lose out, so ensuring you have a goal and a plan will help you handle these times, without losing your head.


A profile that is diversified is much more secure in times of market volatility because it is less exposed to the negative impacts of a specific economic event. Investing in a number of different industry sectors, asset classes and even geographic locations will see your portfolio become more diversified.

Stay involved

Knowing what is going on with your investments is important, as a significant loss in one or more of your assets could cause your portfolio to become unbalanced and less secure. You should receive periodic transaction statements that indicate the value of your investments, as well as the fees and taxes paid. Analysing and responding to this will help you stay involved.

Look out for scams

When markets are volatile, investors are more vulnerable and this is the time that scammers will arise and try to take advantage of the situation. Many scammers catch people out by offering something that sounds too good to be true, by saying they are a representative of a well-known company when they aren’t, or when they contact you in a way that seems suspicious, like a random phone call or through social media. Scammers may offer you investment options that provide high and quick returns, tax free benefits, no risk or low risk investments or even a discount for investing early before a public float. Be weary of all of these. If you are interested, you should always say you need time to think about it and do your own research before committing.


Financial advisors are there to offer you assistance and to help you make the best possible decisions for your investment portfolio. Find a professional that you feel confident with, and don’t hesitate to contact them for help and guidance.

Posted on 23 February '18 by , under money. No Comments.

Considerations before accepting a job offer

Accepting a new job offer can be exhilarating; you’ve put yourself out there, gone for an interview, waited to hear back and you finally get the good news.

While it is all very exciting, before accepting any new job, you need to ask yourself a few questions about the new workplace and most importantly your new employer or manager. Jumping ship without knowing what you’re getting yourself into can land you in an uncomfortable situation.

Consider the following before making the big leap:


The ability to be yourself is important whether you realise it or not. Does the workplace allow for you to thrive and flourish, not just as an employee but as an individual? One of the most relevant aspects of job satisfaction is feeling like you are valued and an important member of your team. If you accept a position in a company that is not accepting of you, you are not likely to be satisfied long-term.

Employee benefits

Many employees have a skill for making job applicants feel like they are extremely lucky to be given the position with the company. While it might be a great career opportunity, companies don’t hire people just to give them a great opportunity, they hire because they are short-staffed, they are losing a team member, or there is a skill-set lacking in their current team. In other words, the business needs you. Don’t get caught up in thinking the business is doing you a favour and you are extremely lucky, without finding out what benefits you will get for joining the team and sharing your skills.

Job role

Understanding your job role and what is required of you is essential. Ask plenty of questions in your interview and save any documentation such as the advertisement for the position that indicates what is required of you. Ask for a formal job description, and research how performing the role corresponds to what you will be paid and what minimum wages for this kind of role include. Ask in your interview if there are any additional jobs you will have to perform and if so, can these be given to you in writing in an amended job description.

Opportunity for growth

Being satisfied with a job that doesn’t offer opportunities for professional development or for growth is desirable for many applicants. However, if this is not for you and you are looking for a career with pathways for growth, you should voice this in your resume and in your interview. Ask the interviewee what the structure of the business is and if there are opportunities for professional development and advanced training, as well as opportunities to advance in terms of wage and job role.

Management style

Before accepting any kind of job, do your research on the company. Nowadays, it is naive not to investigate online and see what kind of company you are entering into. Research business reviews on Facebook and look up the business on LinkedIn. When in your interview, don’t be too shy to ask what the employee or manager’s management and leadership styles are. In a structured and professional environment, the interviewee should be able to answer this question for you. Asking questions of this nature also show that you are assertive and are thinking long-term about whether this position is the right fit for you, not just trying to sell yourself to the business, allowing you to come across as an asset.

Posted on 23 February '18 by , under business. No Comments.