Not sure about everyone else, but I haven’t been camping in over 10 years and I’ve found a few things which changed my camping experience.  I’m going to sound like an elderly person here and say “back in my day” when I went camping it was a simple tent, clothing, torch and a lot of long life and dried food, such as noodles and tuna.  So when a mate asked me to go camping during my long month break over Christmas, I’ve instantly jumped at the idea as it’s been ages since I’ve tackled nature head on.

The first hurdle was passing the idea with my other half as she often gets concerned having to stay at home by herself and our little one.  So I quickly reminded her that we actually have a car, which could transport her to any one of our relatives that lives around the area (including mum and dad), should she ever feel concerned.  With that out of the way, I went shopping for all the necessities, which was simply plenty of dried noodles and tuna.  I also went shopping for a new fishing rod as the last one I had is in someone’s car boot.  All the other equipment such as torches and lamps, I was hoping my mates would provide.

Driving up to my friend’s house, I was excited to show everyone how much food I’ve brought only to be laughed at.  It was confusing at first; however I quickly discovered that portable fridges and freezers can now be installed into 4 wheel drives, which were powered through solar panels.  This meant we could have bacon, eggs, meat and more meat.  Most importantly this meant we could bring milk for coffees in the morning.  So feeling a bit embarrassed, I left a lot of my dried and boring food in my car and went with what the boys had brought.

Approaching the camp site, I imagined the area will be secluded and at most there would only be a couple of fellow campers.  To my amazement the entire campsite was filled and it almost felt like I was back in Melbourne CBD.  After 10 minutes of looking we finally found our own area and commenced setting up tents.  Another 5 minutes later I started to realize how many new and cool camping accessories were available now.  There were caravans that folded out to build an entire outdoor kitchen and play area, a tent that was so large it provided separate rooms, including a toilet and kitchen for its tenants.  Then there was the massive Winnebago which has the lot and comes with television, microwave and oven!  I however was content with our fragile tents and camping chairs.

I actually had a blast spending time outdoors without all the comforts of modern society.  The bugs, mozzies and mud (when we went fishing) didn’t sway me one bit but the one thing I found very difficult was not been able to check my phone.  There was no reception where we camped and not been able to make a call or check my messages for 3 days straight was a lot more difficult than I imagined.

I believe everyone has their own description of camping, whether it be a simple tent under the stars and nothing else, or bringing all the modern comforts along with you such as television and fridge.  The most important thing is we get fresh air, see bright stars at night and get the chance to spend time with our family and friends.

Overall I’ve learnt some important lessons about modern camping which can be applied to many activities we do in life.  Namely preparing the required necessitates for camp 10 years ago is not the same as it is today.  The next time I go camping again, I’ll be sure to research into what new tools and accessories are available for camping trips or even just man up and ask my mates what I should bring as I’ve got no idea.

The retention of key documents is an important requirement for the trustees of self-managed super funds. In this day and age, technological advances have seen the ATO update their record-keeping requirements to allow for electronic storage.

What do trustees need to know about record-keeping?
The ATO, on its website, emphasises that it is the responsibility of the trustees to maintain records of documents in such a way that they are accurate and easy to access. This includes all tax documents and records of the super fund, especially minutes of all investment decisions ensuring that all trustees have acknowledged the decision and the reasons of the choice of investment are noted. This specifically ensures that any disputes between trustees over failed investments within the fund, should not occur since trustees cannot claim they were not involved.

What are the benefits of storing SMSF records electronically?
The ATO’s decision to allow the electronic storage of documents was primarily as a way to minimise the cost of running an SMSF, since it can potentially reduce the costs of maintaining the collection of records. Additionally, a well organised collection may help reduce the cost of any audits required.

What are the negatives of storing SMSF records electronically?
There is a need to ensure that all documents stored electronically can be easily verified for authenticity and are easily accessible. In particular, unknown authenticity of documents held digitally may result in issues when lodging documents with the ATO. Keeping a copy of key documents without the originals may result in difficult questions regarding whether the original was destroyed for the reason other than to simply reduce paperwork. For this reason trustees should strongly consider whether to keep original copies of important documents. The loss of a trust deed, or the existence of one with questionable accuracy, for example, has potentially major implications in case of disputes between trustees, often requiring court decisions for solutions to be achieved.

For how long do documents need to be kept by trustees?
The ATO specifies the need to maintain various documents for various lengths of time.  Should any of these documents not be available within the time period then a penalty must be paid based on penalty points.

Records required to be held for at least five years:

–  Accounting records with the transactions and financial position of the SMSF (If not held, 10 penalty units must be paid)
–  Annual operating statement and an annual statement of the SMSF’s financial position (10 penalty units)
–  Copies of all SMSF annual returns
–  Copies of other statements required to be lodged with the ATO or provided to other super funds

Records required to be held for at least ten years:

–  Minutes of trustee meetings and decisions (10 penalty units)
–  Changes of trustees (10 penalty units)
–  Trustee declarations acknowledging the obligations and responsibilities for any trustee, or director of a corporate trustee, appointed after 30 June 2007 (10 penalty units)
–  Members’ written consent to be appointed as trustees
–  Copies of all reports given to members (10 penalty units)
–  Documented decisions about storage of collectables and personal-use assets

Ultimately the responsibility of retaining key SMSF records falls onto the trustees.  Should any doubts be predicted to exist over the authenticity of a document then care must be taken if making the decision to store SMSF records electronically.

If you’re receiving full service SMSF administration from JBS, you’ll be happy to note that we do all the recording of documents for you electronically, however we still keep a copy of the original documentation of key documents such as trust deeds, pension documentation and binding death benefit nominations. This allows easy access to documents for members, trustees, auditors, and the ATO. If you are running your own SMSF, make sure you adhere to all document storage requirements or alternatively, contact JBS to discuss how we can help.

I’m guessing you’ve heard the term ‘golfers widow’ which really is the term that wives are given if they lose their husband to golf of a weekend…well I’m a Schwarzenegger widow. Sounds funny I know but this was never more apparent than a couple of weekends ago when the Arnold Classic and all it’s Arnoldness came rolling into town and I lost my husband.

I knew when I met my husband 20 years ago that he was an Arnold Schwarzenegger fan but over the years, being a fan turned into an obsession which transformed into one of the biggest collections in Australia. We’ve met the main man himself a couple of times, had a few photos, some passing hello’s through a crowd and even a chance encounter at the Classic last year where there was real one-on-one conversation.

So what does that mean for me and my family? How has it affected our lives? Well, my son’s middle name is Arnold, there’s a room in our house dedicated to Arnold (thankfully we have doors) and I lose my husband whenever anything remotely Arnold happens in Australia.

While he loves the man, he’s never caught any whiff of motivation to start working out (which is great cause I’m not a fan of the muscly bod), he does love all his movies, his political involvement, his kids and anything else. We’ve been to the house he grew up in, we’ve been to his office in Sacramento when he was in politics, we’ve been to Sydney for his movie releases, anywhere possible for an Arnold sighting.

And while I don’t understand it, I do encourage it. We all have our interests or vices so why not Arnold? A great achiever in life (except for a little adultery and child out of wedlock). I love my hubbies dedication and joy when he find a new piece for his collection or he talks about how he came across one of his favourite items. Want to see how full on his collection is? Well, please check out his website (yes I said website)

But really, I hope everyone has their ‘Arnold’ – maybe not as full on as my husband is but something they are passionate about, something that just fills you with joy for no real reason; something outside work, family and friends. An interest, a hobby, a passion! Mine is my Fiat 500 which I’ve previously written about and you’ll be happy to know I’m about the get the front suspension onto my beauty very soon (she writes with a massive smile). Life is for enjoying so get on and enjoy whatever it is that makes you happy!

Who’s excited?? Budget night is fast approaching and it’s that time again where the all-powerful politicians decide the fate of us all through some tweaks or even major changes to the rules that this great land is governed by. So what’s in store this year – unlike every other year, there haven’t been too many early leaks which is making some economists, financial planners, accountants and other professionals very concerned.

While there has been talk of leaving the superannuation system alone for a while, it inevitably gets a change here and there and this year there is discussion about the possibility of movements on the contributions caps. This may indicate a reduction in the amount that you can contribute to super. There is also speculation around the taxation treatment of some contributions in or payments on the way out but nothing solid as yet; as any TV lawyer would say “its hearsay”.

There has also been speculation around the Transition to Retirement (TTR) pension. This pension was introduced to allow older Australians transition into retirement by reducing work hours without reducing income however there was a loop hole which allowed everyday working Australians over age 55 to utilise a strategy of cycling the money through super and receive a pension to gain a tax deduction meaning more money for you and less for the tax office. While this strategy has been known by the Government for a number of years, they have never done anything about this loop hole until now. And the whispers are that they may stop TTR pensions all together from budget night or at least for those who have not reduced their working hours.

These are not the only measures being discussed or those that will affect all Australian but just a quick example of items on the agenda. Budget night will also bring surprises in relation to tax, child care assistance, health, housing, Centrelink assistance, and much, much more. While many don’t take much notice of Budget night, almost all Australians will be affected by its outcomes.

Budget night is usually the 2nd week in May however with talk of a double dissolution election in July, budget night has been moved a week earlier – now May 3. In addition, previous history has shown us that some Budget night announcements take effect from when the Treasurer addresses Parliament at 7.30pm (AEST). Retrospective legislation has never been introduced, so it’s unlikely that any strategies implemented now will need to be unwound.

What does this all mean for you? Well, if you have plans to do anything with your money matters you should contact our office as soon as possible to get your strategy sorted.

So if you were intending on making that non-concessional contribution to super sometime this financial year, consider doing it earlier or if you were planning on starting a TTR pension, this might push you into getting advice today.

Call us and one of the guys will be able to chat about the changes, the impact it may have on you and your financial plan or you can organise for a full review to make sure you’re on the right track regardless of Budget night changes.

1 July 2016 is the date that new rules around holding collectibles in an SMSF come into effect and it has been noted that SMSF trustees should not expect a transition or leniency period. The legislation changes have been in discussion in some form or another for around five years, giving trustees plenty of time to make the relevant changes to their Fund assets.

The new rules relating to collectibles and personal use assets, such as artwork, jewellery, vehicles, boats and wine, restrict the storage of these items as well as placing additional requirements on protecting these assets. From July, collectibles cannot be stored in a private residence of a member or a related party. You can continue to store your collectibles in a premises owned by a related party as long as it’s not their private residence and is strictly forbidden to be displayed. You must also keep documented records on the reasoning behind your storage decision.

While we are on related parties, you can only lease collectibles to an unrelated party and the lease must be on arm’s length terms. And should you be selling the asset to a related party, it must be at market rates and have a professional valuation to confirm market price.  To be considered a qualified, independent valuer, they must either hold a formal valuation qualification or be considered to have specific experience or knowledge by their professional community.

All collectibles must also be insured in the name of the Fund within seven (7) days of purchase. Insurance must be maintained on the asset at all times while held by the Fund and cannot form part of another policy; such as a trustees personal home and contents insurance.

If your collectible assets within your SMSF cannot tick off the above, you may wish to consider selling the asset prior to the 1 July 2016 date to ensure that your fund remains compliant. It seems that many trustees have been employing this strategy as collectible assets made up $713 million (0.18%) of all SMSF in June 2011, which is a significant amount more than reported in June 2015, with only $389 million (0.07%) of the massive $590 billion assets held by SMSFs. Many believe the reduction is due to the discussions and subsequent implementation of new legislation resulting from the Cooper Review completed in 2010.

If you have collectibles or personal use assets within your SMSF and are concerned about complying with the new legislation, get in contact with the team at JBS prior to the July 2016 deadline to ensure you take appropriate steps to keep your SMSF compliant.

In November I became a parent to a ‘furbaby’ named Raffa (yes after the tennis star).

Deciding to get a puppy was a very hard decision, one that had been pending in our minds for about 18 months. Being professionals we weren’t 100% sure if working 9-5 would be unfair to the little guy and our concern was would we be giving him the best life.

Before we made our decision we did a lot of research on breeds and searched nearly every day on pet rescue in case we found a dog suitable for our situation and home. We wanted a smallish breed that we could have inside with us without ruining furniture but have enough energy to keep up with our active lifestyle. We had narrowed the breeds down to a Beaglier (Beagle cross King Charles Cavalier) and Cavoodle (Poodle and a Cavalier King Charles Spaniel).

From what we researched both breeds have exceptional temperaments, are very loving and gentle creatures and when given the proper training and exercise do well in apartments and small houses.

So we eventually decided on a Beaglier as a friend of ours has a 3 year old beaglier who is fantastic and we fell in love with a photo that was sent to us from the breeder. After visiting we couldn’t resist taking him home. Our only concerned was the beagle ‘hunting’ drive however the cavalier cross in him calms this instinctive nature.

Having beagle cross makes him very easy to train as everything revolves around food, so after a few treats he picks up basically anything you are teaching him. Raf has the most gentle and loving nature and compared to other puppies in his obedience class, he is an absolute angel. He hasn’t (yet) chewed any shoes, furniture or even any of his own toys. So when I hear stories at school that other puppies have chewed skirting boards, couches and even their own beds I think we have the perfect breed for our lifestyle.

When we are home he is our little shadow never wanting to be too far away and when at the park he doesn’t venture too far without looking over his shoulder to see if we are still following him. The only negative I have about the breed is the short hair, which sheds all  but other than that I couldn’t recommend the breed more.

If you are thinking about getting a furry addition to your family, it is vital to do some research on the breed and also consider similar breeds to ensure you get the right temperament for your family and lifestyle. Choosing the wrong breed can lead to a very unhappy experience for both parties. Adding a pet to your family is long term commitment and just like any major decision in life – taking the time to research and plan instead of rushing a decision can make a world of difference.

Travel or tinned beans?

Which choice would you make? And believe it or not, at this age, with time on your side, getting ahead financially is easier than you think.  If you are one who would choose travel over tinned beans, here’s three simple steps you can take now to set yourself up financially in the future – and skip the beans.

TIP 1: Set Financial Goals
Start with a bucket list, what are all the things you’d like to do throughout your life? Now sort them into timeframes. Pick one core goal per timeframe and each pay slip you receive, allocate money toward that goal. For example:

–    SHORT TERM (1-3 YEAR) GOAL: Go to New York for two weeks. Set up a savings account, contribute some every pay cheque.

–    MID TERM (7-15 YEAR) GOAL: Educate your children. Consider an investment such as an investment property, managed fund or share portfolio, contribute even a small amount from every pay cheque.

–    LONG TERM (20+ YEAR) GOAL: Have the choice to retire at 60. Make sure that your superannuation plan is the right one for you, considering fees, investment options, insurance coverage, and any other benefits. To have the ability to retire early, you might want to consider contributing funds to super above the legally required minimum amount (SG contributions) from your employer.

TIP 2: Pay Off Personal Debt
Paying interest is lost money. For example: If you have $3,500 owing on your credit card, paying 21.5% interest and are only making the minimum repayments of $70 a month – it will take you 90 years and 1 month to pay off and you’ll have racked up $27,050 in interest!  Even by paying a little extra each month, say $150. You’ll repay it in two years 8 months and only accrue $1,074 interest. Earn more, spend less or use savings to get rid of credit card debt ASAP so you can start focusing on your exciting goals ahead.

TIP 3: Choose Super Investing Options Wisely
You can choose how you invest and contribute to your super. Compound interest 101: Say you’re 25 years old and you can access your super when you’re 65 years of age. If you have $1,000 in your fund currently and are earning $65,000 a year, contributing 9.5% of your annual salary, being $6,175.  If you receive 5% returns, you’ll retire on $752, 979. If you receive 6% returns you’ll retire on $965, 941. If you receive 7% returns you’ll retire on approximately $1,250,000. We can’t change the timeframe with super but we can influence our rate of return. Always check what your agreed risk profile is. Whether you’re in a conservative (more cash, less shares, property) or high growth (less cash, more shares, property) investing option, it’s important to understand what assets make up your account and whether they will deliver the growth and income you require to meet your goals. But also remember that with greater potenital for growth is greater potential for loss so adjust your portfolio wisely based on your views.

You also have options to contribute on top of the legal minimum paid by your employer, contributing $1,000 per annum on top of employer contributions could result in as much as a $100,000 difference when you retire.

If you need help setting a spending and savings plan, reducing debt or would like more information around the investment options in your super, please contact our office today.

Every business with two or more owners should consider what might happen to the business if one of the owners dies, becomes totally and permanently disabled, or suffers a terminal or traumatic illness.

A business generally depends on a few people to produce the profits, provide the capital, and manage the business.  If there is no viable succession plan, there may be significant financial hardship for the surviving business owner(s), as well as for the surviving family members.

Business Succession Planning is an area often neglected by successful business owners, and this lack of understanding can have dire consequences for the business and its partners.

An example of this is a business where there are two equal partners. The value of their respective shareholding is $500,000. If one partner were to die, then the business would need to find $500,000 to pay to the departing partner’s estate. There are a number of options here but most are not viable:

Borrow – May not qualify for a new loan, can the business pay the loan.

Liquidate – Not fair for the surviving business partner, selling price may be well below market value.

Sell Business Assets – These resources may be needed for the business, potential reduction in business cash flow.

Sell Personal Assets – Loss of lifestyle.

Bring in a New Partner – Who would this be?  Cost to find, time to find.  Potential control issues.

Insurance – Low cost, provides certainty.

A business succession agreement involves the business partners entering into a legally binding written agreement to plan what they are to do with their respective interests in the business should any of them die, become disabled, resign or retire.  In this respect, the agreement covers the voluntary and involuntary exit of a partner from the business.

It is vital for any business to have a succession plan in place, but perhaps particularly so for small businesses. Unless you can afford to rebuild your business from the ground up, you need to protect your business from almost any eventuality.  While you may think it may not happen to you and your business, you have to imagine how your business would fare in the event of the loss of a partner or key person – would your business survive if you didn’t have a Business Succession Agreement?

We stress that all businesses have a succession agreement in place so the business can continue to operate with minimal distraction in the event of a loss to a key person, and a funding strategy is in place for the departing business partner ensuring a smooth transition during a difficult period.

JBS can assist in this area, please give us a call to discuss further.

This morning I went for a 10km run, which I love doing a few times a week to de-stress and stay in shape. If you had met me 6 months ago you would have known that I hated running and hadn’t run a kilometre in my life. Any time I tried to run I felt horribly ill, out of breath and had to stop within 5 minutes.

I was at a point where I felt that I needed to get fitter for my overall wellbeing, but I knew I would continue sitting on the couch if I didn’t set myself a firm goal. So I decided to aim high – I was going to enter into a 10km fun run. With only 6 weeks before the event, I purchased my $90 ticket (the price itself was enough to motivate me), strapped on my new running shoes and ran my first kilometre.

At first I thought I was crazy – I would get half way though a run and have to walk the rest because I was so out of breath!  I started to realise this was a mental challenge as much as it was physical. Even when the going got tough I didn’t let myself give up, I knew persistence would be the key to success. Similarly to investing, running 10kms wasn’t going to happen over night, it took patience and commitment (and a whole lot of blisters!), but I knew the payoff would be worth it in the end.

Bit by bit, running got easier and I found I could go further every week. Eventually, I started really enjoying my runs and they became my favourite part of the day! As the race approached, I knew that running 10kms would still be a challenge but I felt that I had trained hard in the weeks leading up and was ready to take on anything.

After so many weeks of preparation, training and perseverance, the day finally came. I was so exited and nervous at the starting line and felt so proud that I had even made it that far.

The feeling that I got when I crossed the finish line was truly worth all of the pain. With adrenaline pumping through my veins and my family cheering me as I crossed the finishing banner, I felt like I was on top of the world.

Reflecting on my achievement, being determined and putting in the hard yards was how I reached this enormous goal. Like anything in life – practise makes perfect! If you want to achieve something, you need to put the time and effort in to see results.

Now I’ve set my sights on a new goal – this time I’m going to run 15kms! I can’t wait to see how far I can run and what more I can achieve when I set my mind to it.

If you’re approaching retirement or looking to undertake a Transition to Retirement Pension you may want to consider whether to have a reversionary or non-reversionary pension.

A non-reversionary pension is an income stream paid to a superannuation member that ceases upon the member’s death.  Upon the member’s death, their benefits will need to be paid out of their super either as a lump sum or income stream. Under the super laws, the deceased’s superannuation can’t remain in their super account and must be paid out as soon as practicable.

With a reversionary pension, upon the member’s death, the pension will continue to be paid to a nominated reversionary beneficiary (e.g. spouse). In this case the pension does not stop upon the death of the deceased member, but continues to be paid to the reversionary pensioner. The only thing that changes with the pension is that when the pension is paid in the financial year following the member’s death, the minimum pension payment requirement is based on using the reversionary pensioner’s age.

For members of a self -managed super fund (SMSF), you need to make sure that your SMSF Trust Deed allows for a reversionary pension to be put in place and you must follow the procedures outlined in the Trust Deed to be able to access the pension.

You also need to have the relevant documentation completed to indicate your nomination at the commencement of the pension. This is required by all superannuation funds, including SMSFs that must satisfy their auditor and the ATO. For an industry, retail or other super fund, it will be their standard pension application forms with the reversionary beneficiary nominated. For an SMSF, the documents required are things such as the notification to your SMSF that you’ve commenced a pension, trustee minutes documenting the decision, and a pension agreement.

You need to take into consideration that you can’t nominate just anyone to be a reversionary pensioner.  The reason for this is that under the Income tax law, only certain people are eligible to be paid a pension. These allowable reversionary beneficiaries include a spouse, a child under 18, a child between 18 to 24 who is financially dependent, or a child over the age of 24 with a disability can be nominated.  With reversionary pensions you can only nominate one beneficiary.

A reversionary pension has many benefits such as ensuring your super benefits stay within the tax-free pension environment and most importantly an income continues to your surviving beneficiary to help them support their lifestyle.  However, a main disadvantage in receiving a reversionary pension is that in situations where a member divorces or separates from the reversionary beneficiary, the member will need to stop the pension and begin a new one and nominate a new reversionary beneficiary, which could come at a cost.

If the reversionary beneficiary decides that a pension is not the most appropriate strategy for them, dependent on the rules of the fund, they can choose to take the funds as a lump sum and pay the tax accordingly.

Feel free to contact the team at JBS to discuss your options with Reversionary or Non-Reversionary Pensions.