finance

Downsizer Contributions – Is It Time To Sell Your Home?

September 5, 2018 By raadmin

As of July 1 2018, super funds are now able to accept downsizer contributions from their members. The federal government introduced the initiative to help relieve housing affordability pressure, encouraging seniors to relocate to smaller homes.

What is a downsizer contribution?

Downsizer contributions were introduced as an easier means for those selling their home to deposit up to $300,000 into their super fund from the sale. These are available for those who are 65 years old or older and meet the eligibility requirements. Until the total balance is re-calculated, the contribution doesn’t affect total super balance.

How do I make a downsizer contribution?

There are 7 eligibility requirements you must satisfy, if you meet the 65+ age requirement:

The contribution must be from the proceeds of selling your home, where contract of sale was exchanged on or after July 1 2018.
The 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.
Proceeds from the sale of the home are either exempt or partially exempt from CGT under the main residence exemption or would be entitled to this exception if the home was a CGT rather than a pre-CGT asset.
You have completed the downsizer contribution into super form before or at the time of making downsizer contribution.
The downsizing contribution is within 90 days of receiving the proceeds of the sale.
You haven’t previously made a downsizer contribution for another home.

What are the benefits of making these contributions?

There are two main benefits from making these contributions – the amount doesn’t count towards contribution caps or total superannuation balance for the financial year. The contribution also doesn’t have the standard ‘work test’ for voluntary contributions attached to it, which applies to Aussies aged 65-74. Members should be aware that downsizer contributions are not deductible.

However, members who are receiving/hoping to receive the Centrelink aged pension should be vigilant for the impact this has on eligibility. Assets within a super fund contribute towards the asset test which determines eligibility to receive a pension, once at pension age.

If you are an SMSF with members starting to ask about downsizer contributions and don’t feel prepared, give us a call! We are experts in SMSF and small business; we can help you meet your customer needs without sacrificing your own.

How Can Accountants Use Blockchain To Step Up Their Game?

August 1, 2018 By raadmin

The buzz is continuing to grow across the business world for Blockchain, and we have written about it in the past, but how can accountants use Blockchain to streamline their work?

Wait, how does Blockchain work again?

Put simply, Blockchain removes the need for storing your own transaction records through creating an audit trail on “blocks”. These blocks are public and can be accessed/maintained by all parties involved in a transaction. The audit trail of a transaction builds as more information is added, blocks are encrypted to ensure privacy breaches don’t occur. Once a block is verified and added to the Blockchain. These can’t be manipulated by others but can be corrected by those involved.

Isn’t Blockchain only useful for cryptocurrency?

Cryptocurrency brought this technology into the zeitgeist, but these applications are just breadcrumbs of what Blockchain is capable of. The motivation for the use of this technology is secure and easy exchange of information between parties. These are very important capabilities when exchanging Cryptocurrency, but also useful for accounting and bookkeeping.

Why should I care about Blockchain?

Reports from the World Economic Forum suggest 10% of global GDP will be stored on this technology by 2025. Universities are offering courses in Blockchain, the next generation of accountants will be masters before they even enter the workforce. To put it simply, Blockchain is here to stay and is growing in importance.

How is this going to change accounting?

Because transaction information is entered into “blocks” and securely stored, there is no need for parties to keep their own records of transactions. However, there may become a triple-entry system, where transactions would be entered into both the Blockchain and each party’s ledgers.

Blockchain eliminates the need for auditors to verify transactions, this means accountants will no longer have to reconcile and process transactions as parties can record and share information independently. Standardisation also allows auditors to verify large portions of data automatically, saving time and costs for audits. This marks a shift in the workflow of accountants, through shortening the process of verifying information, this opens up other opportunities.

This technology can be used to improve the integrity of electronic files easily through generating a hash string of a file. Hash strings are electronic fingerprints of files which can be compared once timestamped into a file.

What changes are we seeing right now?

Robert Massey discussed the boom of Cryptocurrency business for accountants at the Accounting and Finance Show. As governments around the world develop better tax guidelines and recognition for Cryptocurrency, tax professionals will see more business.

Massey also discussed the idea of ‘smart contracts’ using Blockchain to embed contract details into third-party sources. For example, a contract where an invoice will pay for itself after checking delivered goods are received based on specifications and presence of funds in a company’s account. At the moment, ‘smart contract’ technology is being used in the legal industry, but the applications are wide spreading.

There is a lot of business in Blockchain, start to develop your knowledge now so you don’t get left behind

Artificial Intelligence – The Future of Finance

May 17, 2018 By raadmin

Artificial Intelligence – The Future of Finance

If someone said the letters AI to you 20 years ago, you would think they were insane. The prospect of artificial intelligence never seemed real but since the technology era really took off, AI is a reality, not just a dream. Each and every day we are subject to artificial intelligence, from auto-correct on phones and computers to Siri and Google assistant on your smartphones.

The corporate giants are investing heavily in AI because they know it’s not the future anymore, it’s the present. AI provides so many possibilities that us mere mortals never thought possible, that’s why our absolute favorite corporation – Xero are investing heavily in this transformative technology. Unfortunately, as with all technology advancements, there are misunderstandings and massive concerns. Does Skynet ring a bell, anyone?

The Difference Between AI and Machine Learning

AI concept creator John McCarthy explains AI as: “every aspect of learning or any other feature of intelligence can in principle be so precisely described that a machine can be made to simulate it.” This definition moves away from the concept of ‘thinking machines’, as we’ve seen in the Blockbuster ‘Terminator’. The definition of AI varies based on the goals corporations are trying to achieve.

Machine learning is a data analysis technique that teaches computers to learn from experience. Machine learning uses both supervised and unsupervised learning to predict future outputs and find patterns or structures within input data. Machines use learning algorithms to ‘learn’ information directly from data without relying on predetermined equations as models.

Google Assistant

Tech Mogul Google has always been the forerunner with technology, especially with the release of the small but powerful Google home. Google home utilises the intelligent and responsive google assistant that you can find on any 2016+ Android or Google smartphone. This tiny inexpensive gadget sits anywhere in your house or office and provides you with a whole myriad of features, including but not limited to: playing music, sending directions, providing weather and traffic updates.

Appointment Setter

Even though Google is absolutely obliterating the AI market with Google assistant and Google home, they are furthering this development even more. Enter stage right, the Google Duplex. What is Google duplex? Another step in the direction of advanced AI. Google Duplex is an appointment setter, not an online one mind you, but Google Duplex actually calls the restaurant or hairdresser that you want to book at.

The Backlash

Unfortunately, this new technological advancement has prompted concerns about the ‘fate of the human race.’ In a nutshell, people are worried that we are playing with fire and are about to get burnt. Some claim Duplex is not only strange but completely unethical whilst others are applauding Google for this massive feat. I don’t want to imagine how many man-hours went into accurate speech recognition. Those against the innovative technology said it was immoral for the robot not to identify itself prior to booking the appointment. Google has since given in to these demands and will avoid the assistant ‘deceiving’ humans when setting appointments by identifying itself as a robot to the recipient.

Will AI Affect the Way I Work?

Because of the second payments directive PSD2, significant changes are coming to the accounting industry (significantly good that is). Finally, the big banks won’t be allowed to hold onto user data, this vital information can now be shared (with user permission) to third parties. What does this mean exactly? Management accountants and business advisors will be able to utilise businesses’ banking and account records to accurately predict data and turn towards intelligent cashflow.

Are You Paying Enough Attention To Your Super?

January 25, 2017 By admin@akturatech.com

The tax incentives on Australians’ super contributions can welcome better investment returns in an environment full of low investment returns. Experts advise that by learning how to properly understand your super, and what it can do for you, you can save a lot of money.

Australian super contributions dropped 0.3 per cent last financial year, despite a growing working population and rising wages, with the June quarter falling a staggering 0.8 per cent. Wealth for Life Financial Planning principal Rex Whitford believes that the lack of trust between Australian people and the government has developed due to the chopping and changing of the rules when it comes to super. If you are unfamiliar with the latest super changes check out some of our ‘super’ blogs.

Despite the changes, super is still the most tax-effective structure to hold your life savings. Your super is more than just cold hard cash. It can hold property, bonds, shares, infrastructure, or a mixture of these. Maximum Wealth Advisers partner Mauro Grossi says that saving diverted to super at only 15 per cent – instead of your marginal tax rate – can add-up over time. “It’s not the government’s money. It’s your money for your future. If it was sitting in a bank account you would be far more worried about it.”

So how can super tax actually help?

Earnings within super are taxed at only 15 per cent, rather than marginal tax rates
Tax-deductible contributions, such as salary sacrifice, get taxed just 15 per cent. Whereas your wage income tax can be up to 49 per cent.
Tax on withdrawals, income and capital gains for most people aged over 60 is zero
The planned rule changes do not affect these tax rates. They only cap how much you can contribute, and will adjust super savings above $1.6 million per person out of the zero-tax environment and into the 15 per cent tax environment.

We highly recommend that you invest some time into understanding your super and learning what it can do for you, even before retirement. We have a team of highly trained, and knowledgeable experts that would love to have a chat with you, should you wish to learn more.