In today’s blog, we’ll discuss new budget measures, the FASEA exam, new laws, and much more. Let’s get started:

From the Government

Chance for Advisers who didn’t Clear FASEA Exam

Financial advisers are required to clear the FASEA exam until 1 January 2022 to continue offering financial product advice. 3 exam sitting periods are left – July, September, and November. Suppose advisers don’t clear the exam, then they can try but have to wait for 3 months before trying again under the current rules. It simply means that the exam in July would be the last chance for many advisers to have a safety net of one more chance if they unfortunately fail.

Technology Usage for Corporation Act Requirements

The Treasury has issued Exposure Draft legislation for consultation considering the issue of technology usage in meetings to implement company documents and deliver materials related to meetings.

The bill offers a legal mechanism for organisations to implement documents electronically. When any company implements or executes a document electronically:

  • It will sign electronically
  • Fixing of the seal will be seen electronically
  • Different copies could be used by every person needed to execute or implement the document
  • The document might be implemented or executed by the director of a company that doesn’t have a company secretary

From the ATO

Extension of Division 7A Least Payment Relief

The ATO has declared that taxpayers are allowed to apply for an extension of the repayment period where they are not able to make their Division 7A annual minimum repayments at the end of the 2020-21 income years because of the ongoing effects of Coronavirus.

Once an online application is completed, an extension can be requested. The ATO will need the borrower to verify the shortfall amount that the covid-19 pandemic has impacted them and that they are not able to pay their Division 7A annual repayments. If the application is approved, the ATO will suggest to the borrower that they will not be supposed to have received an unfranked dividend.

85% Lodgement Benchmark

The ATO has hinted that if any tax agents fail to meet the 85% lodgement benchmark on time for 2020-21 lodgement years, then it will not make any tax agents lose access to the lodgement program.

ATO Business Portal’s End Date 

The business portal will be retired at the end of July 2021, and from this date, it will be replaced by the ATO’s ‘Online Services for Business.’

Payment-Only Deferrals for Eligible Tax Agents

Practitioners must be aware that applying for a payment-only deferral is possible for eligible tax obligations for their customers, including FBT and income tax.

In lodging the application, tax agents are required to offer comprehensive details of the customer’s unforeseen or exceptional circumstances that make them unable to pay by the due date and stepping ahead to reduce the effects of those circumstances. It is also required to show that the client can make full payment after resolving the circumstances.

Business Turnover and Concessions 

On the ATO website, you can check which small business concessions are there for business entities depending on their aggregate turnover. There are different turnover thresholds for several concessions because of changes made in prior years.

Rulings, Determinations, and IDs

Temporary Full Expensing Rules

This draft law companion ruling offers direction on practical elements of the temporary full expensing rules that enable the full cost of critical assets to be decreased if the adequate conditions are satisfied. The clients who get assets that are not included in the simplified depreciation rules can apply the temporary full expensing rules to these assets.

Total Turnover When Connected Individuals have Different Accounting Periods

The draft determination considers the issue of connected entities and calculating total/aggregated turnover where the entities in the group will have different accounting periods for income tax.

When working on aggregated turnover under section 328-115 of ITAA 1997 you should include:

  1. Yearly turnover of the taxpayer that is being tested
  2. Yearly turnover of each entity that is connected with the taxpayer
  3. The yearly turnover of affiliates of the taxpayer

FBT: Benefits of Car Parking Fringe 

This ruling substitutes the past ruling in this area (TR 96/26) and describes when the provision of car parking by an employer is processed as a car parking benefit for FBT purposes. The ruling works by some of the important factors of the car parking fringe benefit rules, such as:

  1. How to check whether a car park is situated in the locality of the employee’s main place of employment
  2. Whether a car parking is a commercial parking station
  3. How to know the lowest representative fee charged for all day parking by a commercial parking

R&D Tax Offset – ‘At Risk’ Rule

Basically, there are two primary elements to the ‘at risk’ rule. The first is regarding what the taxpayer has received or can expect to receive as an indirect or direct outcome of expenditure being caused. This test minimises the R&D tax offset to the extent that payments will be received because of managing the R&D activities. This factor of the test concentrates on whether associate or taxpayer has received, or has an expectation to receive, concern at the time the expenditure is obtained.

The other factor of the test needs advisers and taxpayers to consider whether any consideration is receivable or received irrespective of the outcomes of the activities on which the taxpayer incurs the expenditure.

Software Royalties

This draft ruling basically considers the receipts’ character from the licensing and distribution of software and whether they are categorised as royalties for income tax. The ruling includes plenty of situations and requires to be considered in detail for customers that are involved in the software industry.

If payments are categorised as royalties this can have essential tax implications for customers, including franking rate and the tax rate that applies to companies, and whether non-residents withholding tax is activated. For tax purposes, royalty includes amounts credit or paid for:

  1. The use of, or right to use, patent, any copyright, design, plan, secret process or formula, or other like property or right
  2. The supply of technical, scientific, commercial, or industrial knowledge or information

Withholder Payer Number (WPN) Exemption Extended for STP

The exemption for companies who report using STP and have withholder payer number (WPN) has been extended again for the year 2021-22.


On June 15, 2021, Parliament resumed.

After a fiery debate, the maximum number of SMSF members is increased to six

Status: Royal Assent 22 June 2021

Basically, it was declared in the 2018-19 budgets, this bill raises the maximum number of members in an SMSF and small APRA fund from 4 to 6. It is essential to identify that in some cases, the state regulation may restrict the number of individual trustees a trust can have to less than five or six. Members of the fund may choose to engage a corporate trustee in these situations. And, because the amendment affects the definition of an SMSF, it will have implications under other Acts and Regulations.

The requirements for signing off on an SMSF’s accounts and financial statements will vary as well. If SMSF has more than one director member, at least two members must sign the accounts and statements in their role as individual trustees or directors of a corporate trustee.

Under the current rule, more than four members are not allowed, the requirements ensure that all members of SMSFs with one or two members sign the accounts and statements. At least half of the members of SMSFs with three or four members must sign the accounts and statements for each income year.

Under the latest requirements, an SMSF with more than one director or individual trustees must have all the trustees or directors sign the statements and accounts. The statements and accounts of all other SMSFs must be signed by at least half of individual trustees or the directors.

Individually ‘Stapled’ Superannuation

Status: Royal Assent 22 June 2021 Single Default Funds

The bill presents new rules to restrict the creation of several superannuation accounts for employees who don’t have a superannuation fund when they join a new job. Currently, when a company hires a new staff member, then an individual employee needs to recognise where they want their superannuation directed.

If an individual does not specify a fund, their superannuation is directed to a default fund. If an individual does not choose a fund, the company must connect the individual to an existing superannuation fund before creating a default fund on their behalf, beginning November 1, 2021.

Trustees are now required to run in the best financial interests of beneficiaries

According to the bill, trustees must adhere to the rules under the SIS Act based on the financial interests of beneficiaries. Apart from retirement benefits, the financial interests of members may incorporate insured benefits offered following formulated insurance strategy and other regulators, legal and professional obligations.

Medicare levy low-income threshold and other budget measures

Status: Passed without changes

The bill included in the previous month’s round-up allows 2021-22 budget measures:

  1. Medicare levy low-income threshold maximises the Medicare low levy income threshold for families, singles, and pensioners, and seniors from 1 July 2021.
  2. For SMEs and primary producers, tax exemption for flood and storms grants.
  3. Family home guarantee-guaranteeing loans for 10,000 single parents along with dependants to buy a first home.

FBT exemption for training redundant personnel, GST on granny apartments, and more

Status: Passed without changes

The bill includes budget measures as covered in last month’s round-up:

  • The low and middle income tax offset (LMITO) will be extended to the end of the 2022 income year.
  • From 1 July 2021, a CGT exemption will be provided for granny flat agreements that meet certain criteria.
  • Employers now have a particular FBT exemption for giving fringe benefits in connection with the education or training of redundant workers, which applies to benefits supplied on or after October 2, 2020.
  • The junior minerals exploration incentive has been extended until the end of the 2025 income year.
  • Changing the rules to reduce the Australian tax exposure for NZ sportspersons and support workers who have spent a long period in Australia competing in cross-border league tournaments. This affects income earned in the 2020-21 and 2021-22 income years.

COVID-19 Disaster Payment for Workers Affected by Lockdown

Status: Passed without changes

The bill offers the framework for payment from the Federal Government, the ‘Covid-19 Disaster Payment’ to offer for workers affected by restricted movement lockdowns that last over 7 days in an area of Covid-19 local transmission announced by the Chief Medical Officer.

The payment would be available to:

  • People who have the right to work in Australia whether they are Australian citizens, temporary visa holders, or permanent residents.
  • Are aged 17 years or more than 17 and:
      1. Lost income on or can’t work or after day 8 of a Covid-19 lockdown.
      2. Don’t have access to paid leave claims through their company.
      3. Are not getting an income support payment, a territory or state pandemic payment, pandemic leave disaster payment.

Screen Production Incentive Reform 

Status: Presented into the House of Representatives

Declared in the 2020-21 budget, the bill maximises the producer offset for movies that are not feature films released in cinemas to 30% of total eligible Australian production expenditure and make several thresholds and integrity changes across the three-screen tax offsets.

The changes:

  • The producer offset rate increases to 30% across all eligible movies that do not fall into the category of feature movies released in cinemas.
  • Maximise the eligible Australian production expenditure threshold from $500,000 to $1m
  • Changes eligibility criteria:
      1. Eliminates 65 commercial hour cap for seasons of a series and a series.
      2. Expenses on general business overheads can no longer be considered as eligible Australian production expenditure towards any offset.
      3. Expenses on services and goods offered by Australian residents outside Australia would no longer be considered towards an employer’s qualifying Australian production expenditure.
      4. Expenditure related to a movie incurred in getting Australian copyright or licensing Australian copyright in previous work for use in the movie can be considered as qualifying Australian production expenditure up to a cap equal to 30% of the movie’s total production expenditure.
      5. For a documentary, remuneration and development expenditure offered to the director, principal cast, and producers up to 20% of the sum of production expenditure on a movie can be considered as qualifying Australian production expenditure.
      6. On the first version of a movie, or one-re-version, a company can only claim expenditure as qualifying Australian production.

Child Care Subsidy Maximise for Families with Multiple Children

Status: Presented into the House of Representatives 

This bill executes the 2021-22 budget measures maximising the child care subsidy for families who have multiple children aged 5 or under in child care from July 11, 2022, and eliminates the $10,560 cap.

Single Disciplinary Body for Financial Advisers

Status: Presented into the House of Representatives

The creation of a single disciplinary body for financial advisers is suggested by the Hayne Royal Commission.

This bill applies recommendation 7.1 of the Tax Practitioners Board Review that suggested that a new model will be implemented for managing or regulating tax consultants while implementing recommendation 2.10 of the Financial Services Royal Commission Final Report.

Paid Compassionate Leave for Miscarriage and Sex Discrimination Definition Extended

Status: Presented into the House of Representatives

The bill extends the minimum leave claims to ensure that there will be paid compassionate leaves for miscarriage. These changes will ensure that when a worker or an employee, or employee’s wife has a miscarriage, the employee would be claimed two days of paid compassionate leave. In addition to this, the bill clarifies the victimising conduct can create the basis of a civil action for illegal discrimination along with criminal complaint under the Sexual Discrimination Act and explains that sexual harassment can be conducted to a valid reason to determine whether the dismissal was unjust, harsh, or unreasonable.

Table 1.1: 2020-21 Medicare levy low-income threshold amounts and phasing-in ranges

Category of taxpayer No levy payable in 2020-21 if taxable income or family income does not exceed (figure for 2019-20) Reduced levy in 2020- 21 (if taxable income or family income is within range (inclusive) Ordinary rate of levy payable in 2020-21 where taxable income or family income is equal to or exceeds (figure for 2019-20)
Individual taxpayer $23,226 ($22,801) $23,227-$29,032 $29,033 ($28,502)
Individual taxpayers eligible for the SAPTO $36,705 ($36,056) $36,706-$45,881 $45,882 ($45,070)
Families eligible for the SAPTO $51,094 ($50,191) $51,095-$63,867 $63,868 ($62,740)
Families with the following number of children and/or students (family income) (family income) (family income)
0 $39,167 ($38,474) $39,168 -$48,958 $48,959 ($ 48,093 )
1 $42,764 ($42,007) $42,765 -$53,454 $53,455 ($52,509)
2 $46,361 ($45,540) $46,362 -$57,950 $57,951 ($56,925)
3 $49,958 ($49,073) $49,959 -$62,446 $62,447 ($61,341)
4 $53,555 ($52,606) $53,556 -$66,942 $66,943 ($65,757)
5 $57,152 ($56,139) $57,153 -$71,438 $71,439 ($70,173)


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