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5 Top Mistakes on SAR Returns

Raj Rana • March 30, 2021

Everyone makes mistakes. When it comes to preparing and lodging your self-managed super fund (SMSF) annual return (SAR), you want to get it right. Below are the top five mistakes we've identified and some tips on how to avoid them.


Not including a bank account in your funds name


You need a bank account in your fund's name to manage the SMSF operations and to accept contributions, rollovers of super and income from investments. You need to report this account when lodging your SAR.


The account must be separate from your trustees' individual bank accounts and any related employers' or advisers' bank accounts. This will protect your fund's assets and ensure super payments can be made to your SMSF.


Providing an incorrect electronic service address (ESA)


An ESA allows your SMSF to receive electronic remittance advice and contributions if you have members receiving super from non-related employers. An ESA consists of alphanumeric characters with a combination of upper and lower case characters and is case sensitive. It's not an email address or the contact details of the SMSF messaging provider.


Not valuing SMSF assets at market value


SMSF assets need to be reported at market value as at 30 June to prepare your fund's accounts, statements and SAR. If you follow our valuation guidelines, we'll generally accept the valuation you provide. Accurate asset valuation is important to ensure your SMSF retains its complying fund status. Penalties may apply for inaccurate valuations as these can have an impact on your members' balances.


Trying to lodge with zero assets


An SMSF is not legally established until the fund has assets set aside for the benefit of its members. We won't accept a SAR from an SMSF that has no assets unless the fund is being wound up. If this is your SMSF's first year and you have no assets set aside for the benefit of your members, you can ask us to either cancel your fund's registration or flag the SMSF's record as return not necessary (RNN)


Incorrect or no auditor details in SAR


Your SMSF must have its financial statements and records audited each year by an approved SMSF auditor prior to lodging the SAR. The approved SMSF auditor must be appointed no less than 45 days before your SAR is due.


Make sure you:


  • receive a copy of the audit report before you lodge your SAR.
  • report the correct auditor details on the SAR including the SMSF auditor number, name of auditor and the date the audit was completed.
  • If you lodge your SAR without approved SMSF auditor details, it will be suspended and not recognised as a lodgment. This will impact the complying status of the fund until the SAR is lodged with the required information.


If the auditor details are incorrect, you may also be penalised for making a false and misleading statement.


Source - Australian Taxation Office


Contact us today on 07 3800 0807 to assist you with SMSF Tax Returns

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Top 4 things tenants want in a rental

By Raj Rana • December 13, 2021
Whether you're thinking about purchasing your first investment property, adding to your portfolio or turning your home into an investment, you need to know what tenants want. 1. Location It's impossible to know what a specific tenant will want location-wise. But this is where it's important to identify your target tenant market and what they want in their location. For example,, families may be looking for school districts, while students will be looking for accommodation close to learning institutions or with transport routes. 2. Safety and security Everyone needs to feel safe in their own home. Tenants will want a property with secure locks and doors, lockable windows and window coverings for added privacy. Looking into the safety of an area could also be a good move when finding an investment property if you're unfamiliar with the area. Research crime statistics and history to get a gauge on the area and how this may impact potential tenant demand. 3. Move-in ready condition The last thing a tenant wants to do is submit maintenance and repair requests while they are in the process of moving house. Getting all the little things sorted before they move in is a must. Work through any items with your property manager and ensure everything is covered. The benefit of doing this early means a more comprehensive entry condition report, plus you get to claim any maintenance and repair request as an instant tax deduction in the same financial year. 4. Renovations and upgrades A modern and aesthetically appealing space doesn't just appeal to more tenants, it allows you to charge a higher rental rate to improve the cash flow of your investment. The roadblock to this is always going to be the costs involved. Renovations and upgrading a property isn't cheap. But claiming property depreciation as a tax deduction at take time can make a big difference to cash flow. Depreciation is the natural wear and tear of property and assets over time, and is the second highest tax deduction available to investors after loan interest repayments. When you renovate a property or upgrade an appliance like a dishwasher with a new one, you can claim depreciation on the improvement. Depreciation is claimed each financial year across an asset's or structure's depreciable lifetime. But just because something needs to be depreciated doesn't mean you have to wait years to claim back the full amount. Depreciation incentives like the 'immediate deductions' allows you to instantly claim some assets that cost less than $300. For example, if you purchased a new ceiling fan that costs $250 for your investment property, you could claim its full cost instantly in the same financial year. To learn more about how depreciation works for renovations, contact our office on 07 3800 0807 Article Credit in conjunction with BMT Tax Depreciation. BMT Tax Depreciation has been working in the property investment industry for over twenty years.

7 Things To Do Before Renting

By Raj Rana • May 10, 2021
Are you thinking about moving to a new house but want to hold onto your current property? Turning it into an investment for the short or long-term can be a good option while increasing your cash flow. But before you do, here are seven things you need to do before renting out your home. 1. Speak to the team at Devonshire Accountants Speak to our expertise team that will guide you through the various deductions available and any negative gearing calculations in detail. Its an important step in planning the tax implications that you can have when preparing your tax return. Our team will also fully explain the deductions available and compliance that is required by you towards the Australian Taxation Office (ATO) 2. De-personalise the property While the property is still yours, it's important to make your future tenants feel like it's their own. Happy tenants will go the extra mile to look after it. This means removing the personal items in the property from when it was your home. Remove the kids' height measurements from the walls, the family dog's outdoor kennel and have all mail redirected. 3. Fix those 'maintenance request' risks early If it's broken, fix it. It mightn't seem like a big issue – maybe it's just a small crack in the wall or peeling paint – but putting it off is just creating a future problem for yourself. Making it a future problem may also make the small issue into a big one. For example, a tired-looking deck now could just need re-oiling but leaving it for later could result in a full (and costly) deck replacement. 4. Do smart improvements If you're thinking about making some slight improvements to your property before renting it out, keep improving your rental return and tenants in mind. Smart improvements will increase tenant interest and the amount of rent you can charge. For example, if your tenant market is young families, installing a bathtub can be a good choice. Easy-to-clean benchtops and flooring options are always a winner with tenants, too. An additional point to keep in mind is the timing of the improvement. If you make an improvement while you still live in the property, you won't be able to claim depreciation on any new plant and equipment assets. So it might be best to wait until you have moved out. 5. Clean Your future tenants need to leave the property in the state it was first leased in (allowing for fair wear and tear). Your property manager will complete a condition report to ensure this happens. To make sure you can keep your tenants accountable, it's important to also do your own part. Your property manager could also recommend a reputable cleaner to get the job done. 6. Update your insurance policy Your owner-occupier home and contents insurance won't cut it when the property is an investment. You need the appropriate landlord insurance policy. Landlord insurance will cover you for many insured events, including those unique to investment properties like tenant damage and loss of rent. Insurance policies differ between providers, so it's important to read the fine print when choosing the best-suited policy for you. 7. Get a depreciation estimate Too many people are missing out on claiming thousands in depreciation deductions. Depreciation is the natural wear and tear of a property and its assets over time. As a property investor to-be, you can claim this depreciation as a tax deduction each financial year once the property is available for rent. When you make your home an investment, contact a specialist quantity surveyor, such as BMT Tax Depreciation, to provide a free depreciation estimate. This could uncover thousands in deductions that you could claim. To learn more about depreciation estimates, please contact BMT Contact us today on 07 3800 0807 to discuss how we can assist you with your Investment property.
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