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Families using Granny Flat arrangements will get CGT exemptions

Families using Granny Flat arrangements will get CGT exemptions

Now all the families living in Australia who wish to care about the elder people (parents) using the granny flat arrangements will get exemptions in capital gains tax.

This rule was introduced by Treasurer Josh Frydenberg. This exception from the capital tax gains will be valid for the written granny flat arrangements in the variation, termination, or creation of that arrangement. This scheme is for those who take care of elders or disabled persons.

This announcement has been made before the Federal budget and the rules described in this announcement will come into effect from 1 July 2021.

This change has been made to make the lives of elders and disabled comfortable. There is a risk that all such persons can face whenever there is a breakdown in the family. More than 3.9 million pensioners along with 4 million disabled Australians will take benefits from this scheme. But if you have some commercial rent arrangement with some elderly or disabled person, you will not get benefits from this scheme.

Last year, this decision was taken to exclude all the CGT from several services that are applicable to the Granny Flat Arrangement. John Jeffrey (Super Australia tax & tax counsel) said that further favorable changes will be introduced in the upcoming Federal budget.

This scheme is for all those who take care of elders in their families. But if some relative is living in your home and you sell your home, in this case, you have to pay the capital gains tax for the gains you just made.

Such exemptions are very necessary for encouraging people to avoid charging rent and informal arrangements. With the help of this latest exemptions, people will build flat for their elderly and stay close with their old age family members.

How can one lodge his tax return

Any tax return in Australia is for the entire year from 1 July of the last year to 30 June of the current year when you are filing your return. But this year is quite different as there is a pandemic situation going on around the world and in Australia. The people of Australia can file their tax returns until 31 October of this year. There are two ways an Australian can do it. They can file their return by themselves to the ATO or a tax agent can do it for them. Be wise in choosing a tax agent for this purpose.

When someone lodges a tax return, the ATO gets information about how much money that individual has earned throughout the fiscal year. Based on this information, the ATO decides how much tax you have to pay. In case you have paid more than the required amount, the extra amount will be refunded and if you have underpaid the amount of tax, the ATO will send you a tax bill for paying the remaining amount.

How to know whether you are eligible to lodge a return:

In case someone has taken out a specific amount of tax from some of his income, he should file a tax return. There are several other rules about this situation as well. You can easily check it by using the tool from ATO called “Do you need to lodge a tax return?” There are several online portals which are not authentic and can harm the interests of the citizens. You can avoid such fake services by linking your myGov account to ATO to check your eligibility. Then, in the list of online services offered by ATO, you will find the official version of Do I need to lodge a tax return? Here are the steps that you can follow to check whether you need to lodge or not?

  • Log in to your account of myGov and then, click on the online services.
  • A dropdown list will open on the screen and you have to select lodgements.
  • Now, click on the option Income tax.
  • Look for the heading outcomes, just under this heading, you will find the option Do I need to lodge? Click on it and select the year for which you want to check it.

How can you do it?

A number of options are available to file a tax return if you are a citizen. Selecting an option depends upon the convenience and situation of the person:

  • MyTax: You can file your tax return using myTax. This is a safe and quick way of filing your tax return. You can save a lot of time if you opt for this method.
  • Go to a tax agent: If you are unable to do it by yourself, you should go to a tax agent for this purpose. But make sure you have selected a registered tax agent.
  • Do it with the help of papers: You can also do it the old fashioned way, using the papers.

In case you don’t need to lodge your tax return, you have to provide some relevant information to complete this process.

Required information for filing your tax return:

  • Statement of income from all your employers.
  • Payment statement from Centrelink
  • Other relevant statements to claim some deductions.
  • Your bank account details.
  • If you are married, you have to include the income of your spouse.
  • Those who have private health insurance have to fill in this information too.

Last date:

There is a fixed date until which you can file your tax return. You can file your tax return before 31 October of this year. When 31 October is on a weekend, you have to file your return until the next working day. For those who have a tax agent for this purpose should provide all the relevant information to their tax agent before 31 October. Though there are some special rules that enable the registered tax agents to file tax returns even after 31 October but you should always contact your tax agent before 31 October.

Those who have difficulties in filing their tax return should contact the ATO immediately. There are several mediums that can help you connect with the ATO.

When you get a bill after lodging your tax return, you can do it before 21 November of the same year. This happens mostly with those who file their returns on their own.

When you have missed the last date of filing a tax return, you should do it as soon as possible. If you have filed your tax return before 31 October, you can pay the tax before 21 November. Whenever you have failed the last date, it is advised to contact the ATO immediately as they can work with you by understanding your situation.

Need help:

There is a free program for those who need help in this matter, but it is for all those who have an income of $60,000 or less. And those who are not eligible for this program can contact some registered tax agents.

What should the accountants do to reduce the stress of COVID

COVID-19 has affected financial activities around the world tremendously. As a lot of businesses and other institutions are a facing cash crunch. A large number of people are looking for ways to reduce their taxes, minimize their expenses. This is quite an exhausting situation and the accountants are in the center of this situation.

As most of the businesses are struggling, the accountants are going through a tough period because most of the clients are needing help. The need for an accountant has increased a lot and that is why the accountants have to provide support to almost every client.

If you are an accountant then, here are some tips to help you minimize your stress:

  1. Connect to your colleagues:
  • No one can know about your situation better than an accountant. So, you should talk to your colleagues to solve this problem. You can talk to them via the Zoom app during the break time of your working hour. You can also consult your boss to advise some ways in reducing the amount of stress.
  1. Your family would be a great help:
  • If your family is aware of the situation that you are going through, they can help you a lot in coping with the stress. While you get back from your office, your family members would create a favorable environment to amuse you. In hard times, the family is the most effective thing that helps you to get out of the situation.
  • Avoid extra works that you used to do on weekends. Instead, you should be spending this time with your family.
  1. Make a spot for you:
  • Whether you are in the office or working from home, you should have a place where you can relax in your breaks. This is a great way to enhance mental peace and increase your enthusiasm when you get back to your work. Don’t underestimate the importance of this step, this is a rather effective process.
  1. Maintain some gap between your client and you:
  • Working in such a tough situation, it is very necessary to understand the difficulties of your clients but save yourself from having too much stress. If your emotional stability is being compromised due to this situation, you can work efficiently. So, try to have a clear mind so that you can understand your clients in a better way.

We have suggested many ways to deal with this situation. But one thing that you should keep in mind that you know yourself better than anyone. You can take the steps as per your situation that may benefit you and others.

What business owners look for when choosing Accountant?

Selecting a good accountant for your business is very crucial. You should not consider your accountant any less than your business partner. There are a lot of things in your business that is solely dependent on the accountant. So, if you choose a good accountant, you are going to have several benefits and if you fail to do so you have a lot of things to lose. To help people make the right selection of accountants, we decided to write this blog. Here are some points that you should consider in this process.

  1. Where to look at?
  • This is the first question that comes in anyone’s mind while looking for a good accountant. No matter where you are going to find an accountant, one thing that you should always keep in mind that you have to try a few accountants before making your final decision. Avoid choosing the right accountant in the first attempt.
  • So, at first, you should go to someone whom you know better and you are aware of their knowledge in this field. Based on their recommendation, approach the accountant and then interview the accountant to check whether he suits your requirements.
  • After you are unable to find one with the help of them or you are trying to look at some other options, you should use social media. Social media will be a great help to you if you want to do it.
  • You can also find a good accountant with the help of many professional bodies that are present in Australia. Going to one of those professional bodies can also help you get a good accountant:
  • CPA Australia (Certified Practicing Accountants)
  • IPA (Institute of Public Accountants)
  • Chartered Accountants Australia and New Zealand
  1. What are the services offered by an accountant?
  • There are different accountants for varied services. While making selection via any method, you should make sure that the accountant delivers the same service that you desire. Here are some of the major services provided by the accountants:
  • Advisory: these accountants provide every kind of advice to their clients. They can advise you in managing your business properly to maximize benefits. They can also help you with forecasting your business activities.
  • Accounting: This is the fundamental job of an accountant. Accounting is often termed as Bookkeeping. Accountants who are for beekeeping just keep a record of every transaction taking place in your business.
  • Tax: There are two things that are done with taxes. One if tax compliance and the other is tax planning. Tax planning helps to reduce the overall tax that the client has to pay while compliance is all about obeying the laws related to tax.
  1. What are the qualifications that your accountant should possess?
  • Qualification is the most important thing while choosing your accountant. There are only two professional bodies that regulate professional accountants. These two bodies are Certified Practicing Accountants (CPA), and Chartered Accountants Australia New Zealand (CAANZ).
  • The accountant that you prefer should belong to one of these professional bodies. And the second thing that you should consider is that your accountant should have a degree level study and he must not be a fresher.
  • And, if you wish your accountant to prepare and lodge your tax returns, you should look for a registered tax agent.
  1. Should you care about the location of the accountant or his office?
  • In earlier days, people used to have accountants close to their homes. But now time has changed. With the help of cloud accounting, an accountant can work from anywhere. There can’t be any problem as there is software that makes you able to see the same data as your accountant in real-time.
  • But while choosing an accountant of this type, you should make sure that your accountant is aware of working remotely.
  1. What about the fees of your accountant?
  • Fees of the accountant vary based on their expertise and the work that they deliver. In the beginning, you should request written information about the fees of your accountant and the works that he will cover. It would help you a lot in comparing that accountant with the others. That written information should also include information about how you are going to pay your accountant (monthly, yearly, or any other parameter).

We have provided all the essential information about how you can choose your accountant. One thing you should make sure that your accountant should do your work. There are several institutions where they will talk to you but most of your work will be transferred to someone else. So, this is not the kind of work you should expect from your accountant.

We need to ensure the mental health of the accountants

There is an urgent need to provide mental health support to the accountants because they have to deal with a very unfavorable situation in the coming future. As the economy is battling to get on track and Australia is facing one of the worst financial crises in the last 3 decades, the behavior of the clients is not going to be normal when everything opens up in the future.

Recently, there was a statement from the chief executive of the Institute of Public Accountants where he had some requests for the trainers. He said that the trainers now need to make the accountants aware of the upcoming situation. This training will help the accountants to be mentally prepared for the upcoming situation.

And those accountants who deal with the public clients have to face the problem. According to experts, this recession has caused severe damage to the economic situation of the Australian public. So, the behavior of the clients is not going to be normal. And we are talking about mental readiness for this situation because there is no training or teaching that would tell the accountant about what to do with a frustrated client.

As there has rarely been any training for helping the accountants in better conversation with the clients. But this is the time we feel a need for such training.

How can the accountants gain such ability?

There are some steps that the accountants should consider. The accountants need to have some mental health first aid course. And we are not talking about making the accountants an expert in this field rather we are intended to provide enough confidence to the accountants so that they can deal with such unusual clients.

The accountants need to have such a mentality that they should stand at every end to help the people. And, helping doesn’t mean to deal with the numbers or so. Accountants have to assure their clients that people will surely get out of this financial crunch. If you are an accountant and you have to work more than usual, you should be ready because this is what the time demands.

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