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ATO reminder about RFB

Employers are reminded that the ATO will be focusing on businesses operating outside the fringe benefits tax (FBT) system in 2013-14.

The ATO will be paying particular attention to those employers who are failing to fulfil their reportable fringe benefits (RFB) amount and FBT obligations.

Employees should be recording the value of fringe benefits provided to each employee.

If the value of certain fringe benefits provided exceeds $2000 in an a FBT year (which is 1st April to 31st March), employers need to record the gross taxable value of the benefits in the employee’s payment summary for the corresponding income year (which is the 1st July to 30th June).

Employees need to be aware that FBT is an employer liability, and they cannot consolidate FBT returns.

Generally, if there is an RFBA, there will be an FBT liability. However, this does not occur where benefits are exempt from FBT because an employee works in or for a public benevolent institution, health promotion charity, hospital, public ambulance service or is a live- in residential care worker.

If employees do not correctly report their RFB amounts, it may affect their government benefits and obligations.

Posted on 13 February '14 by , under Tax.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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