Recently my Grandmother (Na) passed away after 91 wonderful years. The weekend following her passing, the family headed to Shepparton for a family service in my parents garden on Sunday and the formal funeral on Monday. This was a great opportunity for us all to get together and share our memories and celebrate her fantastic life.

My Na was an amazing women. She lost her father at an early age, but was fortunate enough to be taken under her wing by a generous spinster who shared her lover of music. When others were off playing with their friends, she would be practicing her passion. This passion lead to her winning numerous Regional and State singing competitions. In her eulogy, I found out that she was described in the Australian Musical News & Digest as “a remarkable talented young singer… this girl has to her credit three Junior Vocal Championships”.

In 1945 she married my Grandfather and begun a family. They lived in Rossana for 6 years before moving to Cobram to grow fruit as part of the soldier settlement program. Giving back to the community was a big priority for my Na and Grandpa. Amazingly with 6 children they were able to run an orchard, be involved with the Church, play regular sport, starting numerous singing groups and have the whole family be involved in stage productions.

In their later years they sold the orchard and moved to Shepparton. This is the time that I remember fondly. I remember Na’s involvement in the Shepparton Chapter of the Sign Australia Choir, a group of singers where involvement is more important than talent. I remember her constantly donating her singing services at peoples special events such as weddings and funerals. I was lucky enough to have her sing at mine. Her reputation around the Goulburn Valley was amazing. For me as a youngster playing golf or tennis with older playing partners, this was a great ice breaker. So many times I would be asked “are you related to Joan Hanna?” or “are you related to the Hanna’s that sing?” I would respond proudly that I was and this would lead to me being told that Na had sung at their wedding or at their parents wedding or another important family event.

Her contribution to the community was not just her voice. Despite being far from wealthy, she and Grandpa volunteered at the Miller homes (an accommodation services for elderly and/or financial disadvantaged people) and was also involved in the Meals on Wheels services in Shepparton.

Some of that community service was recognized in the Numurkah Rotary Vocational Service Award, The Australia Day Greater Shepparton Citizen of the Year Award, and the prestigious Order of Australia Medal (OAM).

Na was also very involved in sport and the local sporting community. This is a passion that I shared with her. Na was still playing tennis 3 times a week into her late 80’s, something that I still have great pleasure telling people, and when they struggled to believe me and I would go into the story of Na, due to her cataracts, seeing 3 balls coming over the tennis net, bouncing together, forming 1 and then being hit back over the other side of the net.

Another fond memory of mine was playing in a Shepparton District Tennis Final as a 15 year old, me in one division, Dad and Mum in another division and Na in a 3rd division. I can remember giving each other updates and encouragement through the wired fence as we played in our separate finals. During the celebration of her life I found great pleasure in locating a copy of the feature article that the Shepparton News wrote at the time about 3 generations of Hanna’s playing in finals.

Family was extremely important to Na & Grandpa. Throughout my junior sporting events I had essentially my own “fanatics” who brought their own fold up chair and thermos. Na would organise the crew made up of all 4 grandparents and travel around then Goulburn Valley to watch me play in my regional tennis finals. I remember Na going out of her way to introduce herself to my doubles partners on many occasions  and even a couple of time embarrassing me quite innocently as she tried to play match maker with my female mixed partner.

Her love for her Grandchildren in particular was unconditional, I remember once again as a teenager  thinking that it would be cool to shave and die my hair gold for a tennis final (my team was Shepp Gold). I remember an elderly lady was horrified and I remember her saying look what your grandson has done expecting Na to be just as shocked. I can still remember Na saying “if that’s what he wants to do then fine, in fact, I think it looks quite good.”

A number of these stories and more were told over the fantastic weekend we had as a family. I would encourage anyone who loses a loved one to try to organise a story telling time. Not only did this help me to grieve, but it also made me realise the positive effect on people’s lives that she has had.

The importance of family and also contributing to the community where some of Na traits that I’m proud to say she has passed on to me. I feel very fortunate that I’m in an occupation where I’m also able to make a difference to people’s lives and my promise to Na is that I will pass on this knowledge and experience on to my children, so that they too are able to enjoy to rewards associated with helping other people and their local community.

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.

We all need to take that break once in a while; to get away from the everyday routine and spend some time relaxing. Most of the time, all we manage to fit in is a weekend away, but every so often we are lucky enough to have the chance to take a longer holiday. Fortunately for me, I just had that chance and spent the best part of two months over Christmas in Europe with a few friends.

While flying into Paris just one week following the tragic shootings last November was not the most positive way to start, the next two months went off without a hitch as we travelled more than 7,500 km from city to city, seeing the famous landmarks, sights that are not so well known; and taking the opportunity to immerse ourselves in cultures that are similar, yet so different from what we have at home.

Even though I returned in January, there are a few memories that have stuck firm in my mind. Standing at the top of Mount Vesuvius was breathtaking despite the clouds, while, during New Year’s Eve in Prague, it started to snow just before midnight, which, to a bunch of Australians, was something we had never seen before. As a soccer fan, visits to the Santiago Bernabeu and Camp Nou, the home grounds of Real Madrid and Barcelona respectively, had been long planned but still managed to surpass expectations; and off the beaten path, exploring a hundreds of year old salt mine in Poland was something very new to me since the miners had carved massive caverns and churches into the salt.

To anyone planning a trip soon to Europe, I have a few practical suggestions that might come in handy. If you are planning to travel to a number of closeby cities and have the time to take the train, Eurail has a number of deals that could be convenient. We found the system easy to use and much more relaxing than spending hours waiting in airport terminals for all but the longest legs of the trip. Also, the internet is a fantastic source of information that really impressed me; from airbnb for accommodation, to tripadvisor for suggestions of activities and places to eat, there has never been an easier way to easily access information and stay connected. Finally, I found google maps to be the most convenient way to find our way around, by downloading an offline map for each city we made sure we never got lost.

We all need to take time to step back, refocus and prepare for whatever is to come (JBS and more Uni for me) so we can put our best foot forward and have the greatest chance of success.

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.

I started gardening four years ago as a way of relaxing. What started as one small garden bed in the backyard quickly turned into me redesigning the entire front yard! My favourite time of year has to be end of winter through to spring. That is when all the bulbs that are hidden in the various garden beds come to life again and dazzle us with their colour.

In order to prepare for our spring garden we need to start planning now in January. I have learned that with gardening, I am always focussed at least 6 months ahead. Spring bulbs need to be planted in February/March, the exception being Tulips. Tulips need to be placed in the fridge for five weeks and then can be planted in May. It sounds odd, putting bulbs into the fridge before planting, but they need to be chilled in order to flower.

This year we will be shuffling bulbs around, what I refer to as my ‘Bluebell garden’ will be dug up and halved to make room for more Tulips. The Ranunculus and Anemone gardens will be added to as well. The hardest part is limiting myself each year with how many bulbs to purchase! It is very easy to get carried away with ideas about what I want to add, I have to remember that it is very important to look after what is already there, the bulbs need fertilising and fresh compost every year. The same principle can be applied to retirement savings, it is important to look after what is there; because once it is gone it is costly to start again.

It is always sad when the spring flowers start to fade and the garden looks lifeless once again. But, then I remember that summertime means David Austin Roses will bloom, colour will be restored and the next project begins: planting sunflower seeds!