October 2019 Newsletter


  • Employee or independent contractor: What happens when it goes wrong?
  • Low and middle income tax offset
  • Seven major trends affecting Australians in retirement
  • The 5C’s of credit: What banks & lenders look for
  • Announcements

Employee or independent contractor: What happens when it goes wrong?

Low and middle income tax offset

If your taxable income is less than $126,000, you will get some of the low and middle income tax offset. The maximum offset is $1,080 per annum. The base amount is $255 per annum.
The amount of the offset you are entitled to will depend on your individual circumstances, such as your income level and how much tax you have paid throughout the year.

Seven major trends affecting Australians in retirement

In designing a system that will be robust in the face of social, economic or demographic changes, it is useful to note major trends that will affect Australians in retirement. A sound system will be dynamic and require change from time to time.
This paper notes seven currently identifiable trends.

The 5C’s of credit: What banks & lenders look for

You may often hear about potential borrowers who are struggling to fix their credit scores in order to increase their chances of getting approved for a loan or other credit product. However, an applicant’s credit report isn’t the only thing that banks and other credit providers look at before deciding whether to approve or reject a loan application.
Banks and business lenders usually follow a framework to determine a loan applicant’s creditworthiness. This …


This month we wish Happy Birthday to Tony, Nicole and Grant!
Also, congratulations to Brittany, Lyndel and Tony who all bring up work anniversaries this month!
Tony Sampson


Nicole De Zoete


Grant Kuchel



Lyndel Delahunty


Tony Sampson




FREE Client Movie Night

Watts Price Accountants & Knights Accounting invite you to join us for:


The inspirational and true story of Michelle Payne.


Thursday 10th October 2019

5.30pm nibbles and drinks at Horsham Historical Society 33 Pynsent St, Horsham VIC 3400

Movie commences 7.00pm at the Horsham Centre Cinema  at 41 Pynsent St, Horsham VIC 3400

Spaces are limited so please contact Cris on (03) 5382 3001 or email at mail@wattsprice.com.au by Thursday 3rd of October to reserve your place!



Commonly Asked Question

Q: SMSF Diversification – why might I get a letter from the Tax Office?

Recently the ATO advised that they would be contacting nearly 18,000 SMSFs where the trustees hold more than 90% of their investments in a single asset class e.g. property, cash or shares. 
Why? Regulation 4.09 of the Superannuation Industry (Supervision) Regulations 1994 states “The trustee of the entity must formulate, review regularly and give effect to an investment strategy that has regard to the whole of the circumstances of the entity including, but not limited to, …” and goes on to talk about risk and composition.
SMSF Trustees should be aware that:
  • They are required to have an Investment Strategy
  • An appropriate investment strategy will consider the need for diversification and liquidity risk (among other things). Failure to consider this is breaking the law and could result in penalties of $4,200
  • The legislation doesn’t actually require a written investment strategy, it just requires the trustees to ‘formulate, review regularly and give effect’, but best practice is to have it in written or electronic form
Under FOFA (Future of Financial Advice) accountants are not in a position to help you formulate an investment strategy but we can provide you with a basic Investment Strategy template which you can complete based on your circumstances or have your Financial Adviser help you formulate.
Anyone receiving one of these diversification letters from the ATO should be aware that having an Investment Strategy shows you have considered the diversification of the fund and other issues. In many cases no further action would be required as it is perfectly acceptable to have 90% or more of your investments in the SMSF in any one asset class if you can justify it.
It should also be noted that the ATO has no authority to force an SMSF to change it’s asset allocation!
If you have any queries please contact your Financial Adviser or our office on 03 5382 3001 or email at mail@wattsprice.com.au

All the best from the Watts Price Team!