SA Land Tax Update – Land held by a Discretionary Trust

Trustees of a discretionary trust who held land in the trust on or before 16 October 2019, have until 31 December 2021 to nominate a designated beneficiary for that land. Land purchased after 16 October 2019 is not eligible for nomination. By nominating a beneficiary, the land held by the trust is then allocated to the individual’s land holding.

Once the 31 December 2021 deadline passes, there will be no further opportunity to nominate a beneficiary. Any assessable land held in a discretionary trust that has not had a beneficiary nominated will be taxed at higher surcharge rate. In some circumstances it may be beneficial to not nominate a beneficiary, however it could lead to a greater land tax levy being imposed.

If you have received your 2020/2021 land tax assessment notices, we suggest you review the assessments to ensure:

• The land included on the assessment is actually owned by the entity receiving the assessment;
• Correct tax rate has been applied to land held in a trust;
• Your Principal Place of Residence is exempt and excluded from land tax calculation;
• Land held by related corporations have been aggregated correctly.

If you have any questions regarding land tax or would like assistance in reviewing your assessment/s, please do not hesitate to contact our office. We are here to help you achieve the most tax effective outcome.

Super Stapling and your business

The new rules, announced as part of the government’s recent Your Future, Your Super reforms, will see workers automatically stay with their existing super fund when changing jobs — unless they actively choose a new fund.

The change aims to reduce the number of super accounts Australians accrue throughout their working lives and eliminate unnecessary fees workers pay for multiple super accounts.

From 1 November 2021, employers will need to change their onboarding and payroll processes to comply with the new ‘super stapling’ requirements

What is ‘super stapling’?

Under the current ‘default’ superannuation system, where an employee commences employment with a new employer and does not choose a superannuation fund into which their super contributions will be paid, their contributions are paid to a default ‘MySuper’ product selected by their employer. This means that a person who changes jobs and does not exercise choice of fund will typically have more than one superannuation account.

However, under the ‘super stapling’ reforms, where a person moves jobs their existing superannuation account will be ‘stapled’ to them, meaning that their new employer must pay contributions into the ‘stapled fund’ unless the member chooses for their contributions to go to a different fund.

‘Super stapling’ is part of a package of reforms to the superannuation system announced in the 2020 Federal Budget and are aimed at tackling the problem of unintended multiple accounts eroding the retirement savings of Australians. The ATO estimates that there are approximately 6 million unintended multiple accounts in the super system charging $450 million in fees.

What does this mean for employers?

When a new employee commences on or after 1 November 2021, and they do not exercise choice of fund, the employer will need to check if the employee has an existing stapled fund. This is done by logging into ATO online services and providing some basic information about the employee.

Generally, if the employee does not exercise choice and has a stapled fund, the employer will be required to contribute to the employee’s stapled fund to meet their Superannuation Guarantee (SG) obligations.

As an employer what am I obligated to do?

From 1 November 2021, an employer will only need to undertake a stapled fund search where the employee does not complete a Choice of Fund Form. Where an employee completes a Choice of Fund Form and selects to join the employers default fund, this will be considered as a valid choice and a stapled fund search is not required. Failure to request a stapled super fund for employees, who have not made a choice, will mean an employer will have a Superannuation Guarantee shortfall which would be required to be reported in their Super Guarantee Charge Statement. The ATO has signalled there is provision for the shortfall to be reduced at the discretion of the Commissioner. The ATO has acknowledged this is a significant process change and will support employers to make the transition. Further details are currently being drafted and will be made available on the ATO website.

Further information can be found here.

—
If you have any questions in relation to the above changes, the team at Rawson Verco Need are ready to assist you.