This month for you we have the following Munro’s Client Alerts:
- An Extra Step When Hiring New Employees
- Additional Financial Support for Child Care Providers
- Tourism Business COVID Support plus other State and Territory COVID-19 Support Developments
- Closing a business? Don’t forget GST Deregistration
- MySuper Performance Test Results and New Super Comparison Tool
👇👇 Also this month... Negative Gearing and Temporary Pause on New Crypto Clients.
Negative Gearing with a Rental Property
The concept of “negative gearing” essentially means that your property makes a tax loss from renting. As a result, the ATO may effectively pay for some of the rental costs due to an increase in your tax refund (or reduction in your tax liability).
Why would anyone want to be negatively geared?
There are two main reasons:
- Just because you’re negatively geared it does not necessarily mean you are losing money. To get the tax benefits of negative gearing, you need to be making a tax loss. It is possible to still be cash flow positive and be negatively geared. This is because some tax deductions are non-cash expenses. These can include deductions for the decline in value of the building, fixtures and fittings.
- It’s mostly about capital growth. Generally speaking, negative gearing can be financially successful so long as the rental property appreciates in value by more than the losses made on renting the property. The aim is for the increase in value of the property to exceed the losses. From a tax perspective, the losses are usually immediately deductible and your tax benefit is equal to your marginal tax rate. No tax is paid on the increase in value of the property (capital gain) until a disposal happens. Ordinarily, the tax rate on the capital gain is around half your marginal tax rate, thanks to the benefits of the CGT discount.
There are many factors to consider before taking action on a negative gearing strategy. If you would like assistance with rental projections and tax effective structuring, then please let us know.
Temporary Pause on New Crypto Clients
For many years now Munro’s has taken an industry leading position on cryptocurrency accounting and taxation. Over the past twelve months the crypto markets have become popular which has meant that many Australians are requesting our help with their complex tax returns.
In fact, so many people have asked for our help that we’ve had to temporarily say that we are “fully booked until 2022" re crypto tax returns.
This dramatic surge in demand for our professional services has resulted in considerable supply-demand constraints, and it is our view that we must first maintain our exceptional service to existing Munro’s clients. Accordingly, we have temporarily paused taking on new clients in relation to cryptocurrency so that we can continue to deliver great value to our existing and highly valued Munro’s clients.
We look forward to bringing you more client alerts next month.
Munro's | The Professional Problem Solvers
“Problems Solved, Like No One Else”
As trusted confidants and savvy advisors to business owners and investors across Australia, Munro’s is proud to provide innovative solutions that enable growth, whilst also being the first port of call when complex issues arise.
Our exceptional accounting and tax services are of great benefit to Munro’s clients, but what is truly unique about Munro’s is our ability to help entrepreneurs make smarter decisions. This is achieved through a process of partnering with investors and business people whereby they obtain access to coaching, tools, information and networks which lead them to success in business and life.
Ultimately, Munro’s does what it takes to help you:
✔ Start, Grow and Exit Million Dollar Plus Businesses;
✔ Legally Minimise Your Taxes; and
✔ Safeguard Your Wealth.
We call this: Experiencing Success.
Whilst our innovative solutions are perfect for all types of businesses, they are particularly useful for:
🔼 Startups (Early Stage Innovation Companies);
🔼 Family Farms;
🔼 Hospitality Operators;
🔼 Large Format Retail;
🔼 Property Developers & Landlords;
🔼 Pharmacies; and
🔼 Cryptocurrency / Blockchain enthusiasts.
For social proof of all this, we draw your attention to our many 🌟🌟🌟🌟🌟 (five star) reviews on Google. Thanks to our firm commitment to delivering superb advice, innovative services and 5-star client care, we are proudly a Top 1% ranked Australian Accounting Firm.
Whenever you need help with your tax return, optimum structuring, Seed round, succession planning or specialist advice, you can trust in Munro’s to help you: Experience Success!
Contact Munro's today and let's Experience Success, together.