Write Off Assets purchased for under $20,000 immediately

Instant asset write-off

Using the simplified depreciation rules, assets costing less than the instant asset write-off threshold are written off in the year they are bought and used, or installed ready-for-use. This applies irrespective of whether the asset is purchased new or second-hand.

The current threshold is $20,000.

You can choose to use the simplified depreciation rules if you have a small business with an aggregated turnover (the total normal income of your business and that of any associated businesses) of less than:

•$10 million from 1 July 2016 onwards
•$2 million for previous income years.

Currently available until 30 June 2018

Christmas Parties & Gifts

Christmas parties

Christmas parties are consider to be “entertainment benefits” and as such are subject to FBT unless specifically exempt, or the “minor benefits” exemption apples. A minor benefit is one that is provided to an employee or their associate (e.g. spouse) on an “irregular” or “infrequent”  basis, which is not a reward for services, and the cost is less than $300 “per benefit” inclusive of GST. (Less than $300 means $299.99 or less, typical of our tax system)

Having your Christmas party on the business premises on a working day is usually the most tax effective. Expenses such as food and drink (including alcohol), are exempt from FBT for employees with no dollar limit, but no tax deduction or GST credit can be claimed. However, where employees’ families (i.e. associates) also attend and the cost attributable to the associate is $300 or more inclusive of GST, there is FBT on the associates portion of food and drink, and a tax deduction and GST credit can be claimed on that portion. The cost of clients attending the party are not subject to FBT, but no income tax deduction or GST credit can be claimed on their portion of the cost.

Where the Christmas party is held on the business premises on a working day with only employees and clients attending, and only finger food or a light meal and no alcohol is provided, then the entire cost is tax deductible. There is no FBT and a GST credit can be claimed on the entire cost.

Christmas parties held off the business premises are exempt from FBT where the cost for the employee and their associate is each less than $300 inclusive of GST but no tax deduction or GST credit can be claimed. The cost of clients attending the party are not subject to FBT, and no tax deduction or GST credit can be claimed on their portion of the cost.

Importantly, benefits provided to employees at the Christmas function are considered separately when applying the $300 minor benefits exemption. For example, a Christmas party is held at a restaurant costing $220 per head, and at the same time employees are provided with a Christmas hamper (considered a non entertainment gift), costing $85. Although the total cost is more than $300, the provision of both benefits will usually be exempt from FBT under the minor benefits exemption.

For the Christmas party expenses, the business will not be entitled to claim either a tax deduction or a GST credit. However, a tax deduction and GST credit claim should be available on the cost of the hamper as this is not considered to be “entertainment”.


Non-entertainment gifts provided to employees are usually exempt from FBT where the total value is less than $300 inclusive of GST. A tax deduction and GST credit can also be claimed. These include flowers, wine, perfumes, gift vouchers and hampers as mentioned above.

Non-entertainment gifts given to clients and suppliers do not fall within the FBT rules as they are not provided to employees. Generally a tax deduction and GST credit can be claimed for these gifts, provided they are not excessive or overly valuable.

The provision of entertainment gifts has different tax implications (examples include theatre tickets, passes to attend a musical, live play, movie, tickets to a sporting event or providing a holiday). Where the cost for the employee and their associate is each less than $300 GST inclusive, FBT is not payable, and no tax deduction or GST credit can be claimed.

However, if the cost for the employee and their associate is each $300.00 or more GST inclusive, a tax deduction and GST credit can be claimed, but FBT is payable. The cost of any entertainment gifts provided to clients is not subject to FBT, and no tax deduction or GST credit can be claimed.

Self Managed Superannuation Fund (SMSF) Advice

SJM Advisors through our new sister company SJM Private Wealth Pty Ltd is proud to announce that we have partnered with SMSF Advisors Network to continue to provide our clients with the same independent Self Managed Superannuation Fund (SMSF) advice they have always trusted.

SJM Private Wealth Pty Ltd has become a Authorised Corporate Representative of SMSF Advisors Network Pty Ltd.  This will allow SJM to assist clients in establishing, winding up and enter into Limited Recourse Borrowing Arrangements for SMSF’s.  We will also be able to advise on pensions under the AFSL License.

SMSF Advisors Network is not owned by any fund manager, bank, large super fund or insurer. It was created by the National Tax Agents Association to ensure its members can continue to provide valuable advice on our clients superannuation without bias or conflicts of interest.  This was in response to legislation changes abolishing accountants abilities to advise clients in this area.

We recognise that our clients deserve the highest quality advice.  You can rest assured our advice will be aimed at looking after your best interest.

Don’t hesitate to contact the office should you have any questions on your super.

SJM Private Wealth Pty Ltd ABN 93 614 415 137 is an Corporate Authorised Representative of SMSF Advisors Network Pty Ltd 61 155 907 681 Australian Financial Services License (No. 430062).


ATO Target Areas 2016

This financial year the ATO will be targeting individuals with excessive claims instead of targeting specific industries or professionals per prior years. The ATO uses analytic software to spot unusually high claims. Claims the ATO will be focusing on:

Work-related expenses

The ATO has announced the following target areas:

  • Motor vehicle
  • Travel
  • Meals
  • Home Office
  • Phone and Internet
  • Self-education
  • Clothing


From August 2015 the ATO requires all Uber drivers to register for GST and hold an ABN. The ATO data matches income received from Uber drivers and is capable of ensure you have registered for the necessary registrations.

The ATO are reviewing claims and ensure all claims are business related and do not include any private claims.


If you rent out all or part of your house or unit through Airbnb or any other sharing platform, the payments you receive are assessable income. This means:

  • You need to keep records of all income earned and declare it in your income tax return
  • You need to keep records of expenses you can claim as deductions.  If you are only renting part of your home, for example a single room, you can only claim expenses related to renting out that part of the house. This means you cannot claim the total amount of the expenses – you need to apportion the expenses.
  • You do not need to pay GST on amounts of residential rent you earn. However, you do have to pay GST if you provide accommodation like a hotel room or serviced apartment, a bed and breakfast, or rent out commercial spaces like a function room or office space. These types of accommodations are subject to GST
  • You may also need to pay capital gains tax when you sell the house or unit. Even if the house or unit is your main residence, renting out any part of it usually means losing part of your CGT main residence exemption

Capital Gains

Thanks to data matching software the ATO has the ability to see all shares and properties bought and sold back to 1985 when capital gains was introduced. This area has been targeted for the past couple of years and continues to be an area of interest for the ATO.

Rental Property Depreciation

As the owner of a residential investment property, claiming maximum depreciation deductions can make a big difference to your cash flow. Of all the tax deductions available to property investors, depreciation is most often missed as you do not need to spend any money on your property to claim these deductions each financial year.

Research shows that 80% of property investors are failing to take advantage of property depreciation and are missing out on thousands of dollars in their pocket.  Please contact our office if you would like more information.

ATO Big Data – Luxury Assets

The ATO has also given notice that it will acquire details of insurance policies for certain classes of assets, including marine vessels, enthusiast motor vehicles, thoroughbred horses, fine art and aircraft where the value exceeds nominated thresholds for the 2013-14 and 2014-15 financial years.  It would appear that ATO are looking for hidden assets or assets owned by companies that are used personally