Posted on June 28, 2020
We wish to reiterate the importance of registering your security interests on the Personal Property Securities Register (PPSR) as numerous individuals and businesses continue to be affected by not properly registering their assets.
Superannuation assets can also be caught out as proven by the Pozzebon case in August 2014.
As trustees of their super fund in December 2013, the Pozzebon Family agreed to lend $250,000 to Australian Gaming and Entertainment Limited (AGEL), which was in the process of preparing to list on the ASX.
A loan agreement was signed, security was granted in the form of a personal property security interest in all of AGEL’s assets, and the money was handed over. After this transaction took place, the Pozzebon family didn’t register this particular security interest on the PPSR.
On 9th May 2014, AGEL announced it wouldn’t be proceeding with the public offer. Several days following this decision, the Pozzebon family registered the security interest granted by AGEL in December 2013.
On 26th May 2014, AGEL appointed administrators, who later became liquidators. When the administrators were appointed, AGEL had $860,000 in cash reserves. The liquidator’s position was that the Pozzebons interest in those funds was extinguished when the administration commenced, due to the late registration of their super funds security interest.
Corporate security interests need to be registered within the relevant timeframe (20 business days), according to Section 588FL of the Act. Any security interests not registered within this timeframe are vulnerable if a company later becomes insolvent.
Given the relatively insignificant cost of only $16 to register assets under the Personal Property Securities Act (PPSA) (excluding any legal fees required in the transaction), this was an expensive oversight for the Pozzebon family, resulting in a loss of $250,000 from their Superannuation Fund.
Why you should register your assets on the PPSR
If you provide finance, supply, lease, hire or loan assets to third parties, we strongly recommend you obtain appropriate advice and register your ‘security’ interest in the assets to protect your position. Failing to properly register may result in the loss of your assets in the event of insolvency, as was the case of the Pozzebons and their Superannuation Fund.
Have you been charged with Excess Contributions Tax for accidentally contributing more money to your super fund?
Posted on June 28, 2020
Have you been charged with Excess Contributions Tax for accidentally contributing more money to your super fund? If so, good news is on the way.
The federal government has made a commitment to reassess the superannuation contribution cap limits in order to lessen the instances of accidental breaches that lead to severe penalties for individuals. – See more at: http://www.smsmagazine.com.au/articles/govt-to-review-contribution-caps#sthash.165s7yvy.dpuf
Currently a contributions cap of $35,000 applies from 1 July 2013 for those 60 and over, and 1 July 2014 for those 50 and over. For everyone else, the contributions cap will remain at $25,000 (with indexing returning to the cap from 1 July 2014). The SG percentage will be kept at 9.25% for the 2014, 2015 and 2016 financial years. From 1 July 2016 the SG percentage will rise to 9.5% and will then increase by half a percentage point each year until it reaches 12% for years starting on or after 1 July 2021.
Good news is that for the 2013-14 financial year onwards, excess concessional contributions are no longer subject to excess contributions tax. If your contributions exceed the cap, the amount will now be included in your assessable income and taxed at your marginal tax rate, rather than the excess concessional contributions tax rate of 31.5%.
Constant change means that you need to keep one step ahead and constantly reassess your position. This applies to everything from salary sacrifice agreements to investment and retirement planning.
We will keep an eye on this and keep you posted.