Blog Page 318

Making tax-deductible super contributions

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There are two types of super contributions individuals can make: non-concessional (after-tax) and concessional (before-tax).

From 1 July 2015 to 30 June 2016, eligible individuals can make concessional contributions of up to $30,000 per year if they are 48 years of age or under on 30 June 2015. Eligible individuals who are 49 years of age or over on 30 June 2015 can make concessional contributions of up to $35,000 for the year.

Those who are self-employed or not employed can claim a tax deduction for their super contributions as they are treated as concessional contributions.

Individuals who are under the age of 18 can only claim a tax deduction for super contributions when their income comes from gainful employment, such as carrying on a business.

In most circumstances, those who are classified as employees cannot claim a tax deduction for making a super contribution. However, they can receive a similar tax benefit through salary sacrifice contributions.

Although the rules for claiming tax deductions on super contributions can be complex depending on the type of work an individual does, generally speaking, an individual can claim a tax deduction for super contributions if they:

  • are self-employed and not working under a contract principally for your labour.

  • are not employed

  • can satisfy the 10% income test rule. To satisfy this test, individuals need to prove that they receive part of their income as an employee but less than 10% per cent of their assessable income (including salary sacrifice contributions and reportable fringe benefits) are attributable to employment as an employee.

Rolling over your CGT

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A capital gain or capital loss is the difference between the cost of an asset and the profit or loss made when it is disposed of. In certain circumstances, a capital gain from a CGT event can be deferred, or ‘rolled over’, until another CGT event happens which involves an asset in the following events:

Marriage or relationship breakdown
If an asset, or a share of an asset, is transferred from one spouse to another upon their marriage or relationship breaking down, any CGT is usually deferred until another CGT event takes place i.e. one spouse sells the asset to someone else.

Loss, destruction or compulsory acquisition
Individuals can defer a capital gain when their CGT asset is lost, destroyed or compulsorily acquired.

Mining lease
Those who dispose of their land to an entity who holds a compulsory mining lease over it that would significantly affect the use of the land can defer a capital gain.

Scrip for scrip
Individuals can defer a capital gain if they dispose of their shares in a company or interest in a trust as a result of a takeover.

Demergers
Individuals can defer a capital gain or capital loss if a CGT event happens to their shares in a company or their interest in a trust as a result of a demerger.

Improving your elevator pitch

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An elevator pitch is the short description you can give about your business in the time it takes to ride an elevator. Your elevator pitch must be brief. It must say enough about what you do so people can easily understand and remember you. And, ideally, you want your elevator pitch to make a positive impression.

It is not easy to develop an elevator pitch. It takes quite a bit of thinking to decide which aspects of your business to mention. Even more frustrating, you have to decide which parts of your company to leave out. Often these can be the things you’re most excited about – a new technology, a great location, the fact you get to go to Europe on buying trips. But if they’re not central to the core of your business, then they don’t belong in an elevator pitch.

Your elevator pitch must not only be short, it must be clear. Unless you’re in a highly technical field, your neighbor or grandmother should be able to understand your business well enough to be able to describe it to someone else.

Your elevator pitch should touch – very briefly – on the products or services you sell, what market you serve, and your competitive advantage. It is often a good idea to use an analogy as part of your elevator pitch, especially if you’re in a new or difficult-to-grasp field. If you’re in an easy-to-understand business, your elevator pitch theoretically could be very short. But you still want it long enough to distinguish you from your competitors.

So go out and find a four-story building with an elevator, ride up and down and practice your “elevator pitch.” That way you’ll be completely prepared the next time someone asks you, “What do you do?”

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