Summerhill August 2008 e-newsletter

An Education tax refund has been recently introduced to help families meet the cost of primary and secondary schooling.

ShareGift Australia helps investors tidy up their portfolios through donating small parcels of shares that would otherwise be difficult and expensive to trade.

More than 200,000 Australians hold small parcels of shares worth more than $80 million. Selling such small parcels can be costly and hard, but ShareGift Australia, a not-for-profit organisation, helps shareholders convert them to help a wide range of Australian charities.

The solution is simple, transparent and tax deductible.

With more than $286 billion held through Self Managed Superannuation Funds (SMSFs), the Federal Government and Tax Office are keen to ensure all parties are complying with their obligations.

SMSF trustees are likely to receive greater interest from the Tax Office to ensure each trustee understands their roles and responsibilities in operating their SMSFs. The government and ATO believe many trustees are not sufficiently aware of their duties, and perhaps rely on the SMSF’s accountants, auditors and advisers to fill this deficiency.

Given the recent market volatility, we thought we would take the opportunity to remind clients what we do behind the scenes in managing their investment portfolios.

Individuals are using Wills for more than just dividing their assets between beneficiaries: ethical Wills give benefactors the opportunity to communicate their values, hopes and dreams to future generations.

Legal Wills are designed to address dividing tangible assets. As individuals – and particularly after recent high-profile estate disputes of Peter Brock, Clinton Grybas and Heath Ledger – most of us are aware of the importance of leaving a current, valid Will to ensure our money, or possessions, are distributed according to our wishes. But what legal Wills neglect to address is the opportunity to convey our values, ideals and beliefs to loved ones.

Anyone who watches the financial report on the nightly news will be aware of media discussion about this being a new ‘bear’ market.

Helping people achieve their goals is what Summerhill Financial Services does. So it makes sense for us to support a community program with the same aim.

Each year at this time, the Commissioner of Taxation announces key areas the Tax Office will focus on as part of its annual audit regime.

Many of the focus areas stay the same from year to year, although the ATO will add areas to its radar where it believes there is system abuse.

Before we know it, the Australian summer barbecue season will be here – a time when many of us spend our weekends standing around a burner in someone’s backyard discussing the state of the world. When it’s male-dominated, the chit-chat over smoking steaks usually starts with the weather, before progressing to sport, television and New Year’s resolutions. Sooner or later, the question of investment crops up.

These barbecue conversations about money can be a little exasperating, particularly if you’re a long-term buy-and-hold investor with a diversified portfolio structured around the known sources of risk and return. So picture a group of people standing around a barbecue on a summer evening. The small talk exhausted, one guest who’s had a particularly good year in the markets, changes the subject to investment… “My broker told me to put a bundle on BHP and Rio this year,” he says, in between swigs on a can of expensive imported beer. “Best thing I ever did.”

The Australian Tax Office has released the latest statistics it has gathered on Self Managed Superannuation Funds (SMSFs).

At the end of the 31 March 2008 quarter, there were 378,656 SMSFs – an increase of 12% in 12 months.

• There are a total of 729,851 members in those SMSFs
• At 30 June 2007, the average asset balance per member was $417,694, and the average asset balance of the fund was $800,651
• As at 30 June 2007, the top five asset classes invested by those SMSFs were…