1. Electric vehicles & FB

Treasury Laws Amendment (Electric Car Discount) Bill 2022 received Royal Assent on 12
December 2022.

From 1 July 2022, an FBT exemption will apply for certain electric vehicles (battery, hydrogen
fuel cell and plug-in hybrid vehicles) provided as a car benefits, if the following criteria are met:

• The vehicle must not have been held, or used, before 1 July 2022.
• The vehicle cannot have been subject to the luxury car tax when it was purchased.
• For the 2022/23 income year, the car needs to cost less than the luxury car tax threshold
  for fuel efficient vehicles of $84,916.

Plug-in hybrid electric cars will only get the benefit of the exemption for a limited time, as there
is a clause that terminates exemption for this type of vehicle from 1 April 2025.

Employers will still need to include exempt electric car fringe benefits in an employee’s
reportable fringe benefits amount.

2. FBT – Private ‘Minor, Infrequent and Irregular’ use of cars

Cars that are provided to employees or their associates for ‘minor, infrequent and irregular’
private use may potentially be exempt from FBT. The term ‘minor, infrequent and irregular’ is
not defined in the FBT Act, however, the ATO has released PCG 2018/3 which provides ATO’s
compliance approach in assessing whether the private use of a car will be ‘minor, infrequent or
irregular’.

PCG 2018/3 stipulates that cars that meet the following strict criteria will be able to rely on the
ATO providing a ‘safe harbour’ to treat the car as having met the requirements to qualify as
exempt for FBT purposes:

• The car must have been provided to the employee for use in performance of work duties
• The car has a GST inclusive value of less than the luxury car tax threshold (at the time of
  purchase)
• The car cannot be provided to an employee under a salary packaging arrangement and the
  employee also cannot elect to receive additional remuneration in lieu of using the car.
• The employer must have a policy in place that limits the private use for the car. The
  employer must also obtain assurance from the employee that they have complied with the
  policy.
• The employee uses the car for travel between home and place of work, and any diversions
  do not add up to more than 2 km’s to the ordinary length of the trip from home to work.
• The total private use of the car (other than home to work travel) in the relevant FBT year
  must not exceed 1,000 km’s, with no return private journey exceeding 200 km’s.

3. Super Guarantee Contributions

Employers are now required to make superannuation contributions for all eligible employees,
regardless of the employee’s earnings. Employees under 18 years old still need to work more
than 30 hours in a week to be eligible for superannuation contributions.

Two changes came into effect from 1 July 2022:

a) SG rate increased from 10% to 10.5%
b) Employees no longer need to earn $450 to be eligible for superannuation contributions
If an employer does not pay the correct amount of super on time*, the employer will need to pay
superannuation guarantee charge (SGC) to the ATO and also lodge an SGC statement with the
ATO.

*Super is due 28th day of the following month after the end of the relevant quarter – for example
super for the Oct-Dec quarter is due on 28 January.

4. New employees and superannuation

Employers are reminded that where new employees have not provided them with their choice of
superannuation fund, employees super contributions should be made into:

a) The employee’s stapled super fund or
b) The Employee’s nominated account (but only if the ATO advises that the employee does
not have a stapled super fund).

A stapled super fund is an employee’s existing super account which is linked to them and follows
them as they change jobs. Employers can request this information from the ATO using ATO’s
online services for business or via their tax agent.

From December 2020, the employer enabled software will allow the employer to request stapled
superfund details from within the software, so that the employer does not need to contact the
ATO.

5. Working from home (WFH) deductions

Record keeping requirements and methods for calculating working from home deductions have
changed for the 2022-23 year onwards. Taxpayers will no longer be able to use the shortcut
method after 30 June 2022.

From 1 July 2022, the two methods available to calculate working from home deductions are:

a) Revised fixed rate method
b) Actual cost method

The actual cost method has not changed, but the revised fixed rate method has been updated,
making it easier to calculate expenses relating to WFH.

The revised fixed rate method:

• Will be 67 cents per hour worked from home (increased from 52 cents per hour)
• Removes the requirement to have a dedicated home office space
• Allows taxpayers to separately claim the work related portion of decline in value of
  depreciating assets (such as office furniture, desks, computers etc).
• Works out the claim for:
  o Electricity & gas
  o Phone & internet usage
  o Computer consumables
  o Stationery costs

In order to be able to use the revised fixed rate method for your 2022-23 tax return, you need to
have:

• From 1 July 2022 to 28 Feb 2023, written record representing the hours you worked at home
• From 1 Mar 2023 to 30 June 2023, record of total number of hours you worked from home (eg timesheets, roster or diary) as well as evidence of expenses that you paid that are covered by the revised fixed rate method (listed above).
• You also need to retain records of any office equipment/assets that you purchased.

6. Downsizer Contributions

From 1 January 2023, the eligibility age to make downsizer contributions has been reduced to 55
years or older. Eligible individuals can choose to make a downsizer contribution into their super
fund of up to $300,000 per person ($600,000 per couple) from the proceeds of selling their home.

The eligibility age changed from 65 years old to 60 years old on 1 July 2022, ie for downsizer
contributions made between 1 July 2022 to 31 December 2022, the individual must still be aged
60 years or older at the time of making the contribution.

Individuals have 90 days from receiving the sale proceeds of their home to make the downsizer
contribution. So, for individuals between 55 to 59 years old, where proceeds are received before
1 January 2023, the individual can still make the contribution after 1 January 2023 as long as it is
within 90 days of receiving the sale proceeds. However, if the 1 January 2023 date falls outside
of their 90 day window to make a downsizer contribution, the individual will not be eligible to
make the contribution.

7. Compassionate release of superannuation

The ATO can approve for super to be released on compassionate grounds if ALL the following
conditions are met:

a) Condition 1 – Individual has to meet the specific eligibility requirements/criteria of the
compassionate ground you are applying for:
i. Medical (Treatment of Transport)
ii. Accommodating a disability
iii. Palliative care for a terminal illness
iv. Funeral expenses for your dependant
v. Preventing foreclosure or forced sale of your home
b) Condition 2 – The above expenses have not yet been paid. If expenses have already been
paid (from loans, credit card or borrowed money), you will not meet the eligibility
requirements.
c) Condition 3 – The individual cannot afford to pay part or all of the expense without
accessing their super. For example the individual has does not have the ability to get a
loan, or use their savings, or sell assets to pay the expense.
d) Condition 4 – The individual is or have been a citizen or permanent resident of Australia
or New Zealand.
e) Condition 5 – The Individual has provided all required supporting evidence and unpaid
invoices or quotes.

There is more information on the eligibility requirements for the medical conditions listed on
Para (a)(i) to (a)(iii) on the ATO’s website.

Preventing foreclosure or forced sale of your home

An individual can be eligible for early release of super to prevent foreclosure/forced sale of their
home if their:

• Mortgage or council rates are in arrears,
• Mortgage lender or council is threatening to repossess or sell their home.
  

To be eligible for early release, the individual must meet ALL of the following conditions:

a) Condition 1 – the property subject to foreclosure/forced sale is the individuals primary
place of residence
b) Condition 2 – the individual is legally responsible for the mortgage payments or council
rates for that home
c) Condition 3 – the individual has received written advice that their home is to be foreclosed,
sold or repossessed from the mortgage lender/bank (who has provided a default notice) or
the council (where rates have been overdue for more than 2 years).
d) Condition 4 – the individual has no capacity to pay the money owed.

The individual is not eligible for early release of super if:

a) They don’t own the house (ie they are renting)
b) The house is an investment property
c) They have missed mortgage repayments but the lender/bank has not issued a default notice
d) They have outstanding council rates, but less than 2 years, and the council has not issued
a written notice
e) The threatened foreclosure is due to bankrupty or family court proceedings
f) If the loans relating to the properties are not the individuals primary home

The maximum release amount for mortgage foreclosures within a 12 month period (referred to as
the cashing restriction), is the sum of both:

• 3 months repayments and
• 12 months interest on the outstanding balance of the loan.

If an individual has more than one superfund, they can apply for a smaller amounts for each of
their superannuation funds, up to the total release amount. If more than one person is accessing
their super based on compassionate grounds to prevent foreclosure, the combined total that is
released cannot exceed the maximum amount.

8. SMSF’s investing in crypto assets

The ATO recommends Trustees of SMSF’s that are thinking about investing in crypto assets to
seek advice from a licensed financial adviser. Trustees are responsible in ensuring that this type
of investment complies with the Trust Deed and Trustees investment strategy as well as super and
tax laws.

Trustee’s need to ensure that crypto assets:

• Are owned by the superfund, and held separately from Trustees own assets.
• The superfund must have it’s own digital wallet, separate to any that are used by the
  Trustee for personal or business purposes.
• Crypto assets that are owned by a member or related party personally, are not sold to
  the fund, or transferred to the fund as a contribution.
• Investments in crypto assets are consistent with the Sole Purpose Test

Trustees also have to be aware of:

• Their responsibilities when buying, selling or investing in any assets, and that these transactions have to be undertaken on an arm’s length basis.
• Capital gains tax implications of disposing crypto assets
• Income associated with crypto assests are to be reported on the funds income tax return.

8. Market Valuation for tax purposes

The ATO has published a Market Valuation for Tax purposes’ guide, to assist taxpayers and
advisers in understanding the Commissioners expectations on market valuations for tax purposes.

The Guide is intended to assist taxpayers reduce tax risks associated with market valuations,
however it does not provide instructions on how to calculate market value for tax purposes.

9. Director ID

If you have missed the Director ID deadline, it is not too late for you to apply using the following
link https://www.abrs.gov.au/director-identification-number.

10. Important lodgement due dates

28-Feb-23	Lodge and pay Oct-Dec 2022 quarter IAS & PAYG instalments
28-Feb-23	Lodge and pay Oct-Dec 2022 quarter BAS
21-Mar-23	Lodge and pay February 2023 monthly BAS
31-Mar-23	Lodge tax return for companies and superfunds with total income of more than $2 million in the latest year lodged (excluding large and medium taxpayers), unless return was due earlier. Payment for above entities also due by this date.
31-Mar-23	Lodge tax return for head company of a consolidated group (excluding large and medium), with a member who had a total income in excess of $2 million in their latest year lodged, unless return was due earlier. Payment for companies in this category also due on this date.
31-Mar-23	Lodge tax return for individuals and trusts whose latest return resulted in tax liability of $20,000 or more, excluding large and medium trusts.
21-Apr-23	Lodge and pay Jan-March 23 quarter PAYGI for head companies of consolidated groups
21-Apr-23	Lodge and pay March 2023 monthly BAS
28-Apr-23	Lodge and pay Jan-March 23 quarter BAS
28-Apr-23	Lodge and pay Jan-March 23 quarter IAS
28-Apr-23	Employers to make super guarantee contributions for the Jan-March 23 quarter.
15-May-23	Lodge 2022 tax returns for all entities that did not have to lodge earlier and are not eligible for 5 June concession.
15-May-23	Due date for companies and superfunds to pay (if required).

If you wish to discuss any of the above matters, please contact our office.
Should you have any questions, please feel free to contact our office on 0402 277282 (Carl) and
0412 404128 (Tina).

Yours faithfully
CARL DUMBRELL & TINA LOH
Partners – CDTL Accountants & Advisors