Each year thousands of Australians are either seriously injured or struck down with a debilitating illness. Unexpected events don’t always happen to someone else. Just ask John Maher from Bendigo.
While driving just outside Bendigo, John noticed a 4 wheel drive coming towards him. What he didn’t know was that the car was being driven by a 18 year old girl who had been driving for 24 days and had lost control of the vehicle. The car rolled and bounced in the air and landed down on his roof. The girl was killed and John was trapped in his car for 1 hr ad 40 min. John suffered damage to his frontal lobe, a broken foot and ended up with serious neck and back injuries and suffers from short term memory loss. Fortunately John took out an income protection policy 10 year earlier. After a month of waiting and doctor visits, the insurance company initiated the policy. For more than 15 years now, John has been receiving benefits from the policy which will continue to pay out until he turns 65 and increases in line with CPI.
If you suffered serious accidental injuries like John, how long could you continue to maintain mortgage payments, your children’s education expenses, and your current living expenses without adequate income protection insurance in place? For 1 month, 2 months, or 6 months? And then what would you do to provide for your family?
Don’t leave your future to chance. Most of us insure our homes and motor vehicles against total loss, but fail to recognise that without income protection insurance, an accident or serious illness could render us financially destitute in less than a year. And whilst employees have some protection with Workers compensation insurance, remember that this only covers employees for injuries caused by accidents occurring during work hours, or from illnesses that occur as a direct result of employment.
This is a reminder that the small business investment allowance rules require that an asset must be purchased by 31 Dec 2009 to claim this additional investment allowance. The bonus deduction is claimed in the year that the asset is first used or installed ready for use. Please note that the asset must be used by 31/12/2010, otherwise no bonus deduction is allowed. Note be careful how the asset (eg car) is purchased, whether it is a HP, lease or chattel mortgage. You need advice on this if delivery does not come until after the New Year.
Gifts:
- If provided to employees or their family, these will be subject to FBT, tax deductible and a GST credit will be claimable. An exception to this is if they are under $300 per employee (or family member if provided direct to them) in which case, if they are entertainment (e.g. movie tickets), they will not be subject to FBT but an income tax deduction and GST credit will not be able to be claimed. If the gifts are under $300 (per employee) and are not entertainment (e.g. a Christmas hamper), they will be exempt from FBT while an income tax deduction and GST credit can be claimed.
- If provided to clients/suppliers and are entertainment/gifts, these will not be subject to FBT but an income tax deduction and GST credit will not be able to be claimed. Non entertainment/gifts will, however, be deductible and a GST credit will be claimable on them while remaining not liable to FBT.
Christmas Parties:
- If held at on external premises, these will be subject to FBT for attending employees while an income tax deduction and GST credit will be able to be claimed. However, if the value per employee (& each family member attending) is less than $300, they will not be subject to FBT but an income tax deduction and GST credit will not be able to be claimed. Finally, the amount attributable to clients/suppliers attending will not be subject to FBT but an income tax deduction and GST credit will not be able to be claimed.
- If held on business premises, there will be no FBT for employees regardless of the amount but the rules for their family members as well as clients and suppliers remain the same as for functions on external premises.
