The financial year is fast coming to a close and it is time to consider your potential taxation position before 30 June.
We provide tax planning strategies which incorporate a review of your performance for the current year to date and will estimate your position as at 30 June. Being informed of your tax position will enable you to implement tax effective strategies prior to the end of the financial year.
Aside from profitable farming or business operations, unexpected taxation scenarios can also arise from:
- Capital gains from sale or family transfer of investments or property
- Reduced depreciation deductions
- Timing of income or deductions in prior years
- Drawings from companies by shareholders or directors
- Farm management deposit movement
- Primary production averaging
- Superannuation contributions and rent payments
- Movement in stock levels
- Managing private trust distributions
Timing of transactions - Timing of Income and deductions can have a direct impact on your tax position.
Super Fund Contributions - A tax deduction is only allowed for your super contributions where the funds have cleared through the Super Fund bank account by 30 June (both for employees and individual contributions).
Rent Payments - If your Self-Managed Super Fund (or property trust) owns real estate, now is also a good time to make sure that the rent being paid to the fund is up to date and check that your lease agreement is still current.
Pension Payments - If you have a Self-Managed Super Fund and are receiving pension payments; have you taken your minimum amount of pension that you must withdraw prior to 30 June?
Immediate Write-off - In May 2017, the Government announced an extension to the 2016 Budget measure providing an instant asset write-off provision for small business. Small businesses can immediately deduct the business portion of most assets if they cost less than $20,000 and were purchased before 30 June 2018.
Forward Planning - Have you considered the impact of your actions on the year ahead?
With the Federal Budget just around the corner, we are likely to see some changes to our tax system which could impact your position. Stay tuned for our post-budget blog for more details on this.
Any action taken which results in a reduction in tax must be taken for investment or commercial reasons (i.e. making super a contribution can lead to a tax reduction, however the contribution is made with the intent to support you through retirement). It is important that your action is not for the sole and dominant reason of avoiding tax.
Cash-flow is king - in implementing tax planning strategies we consider your cash-flow position to ensure the strategy is in line with your available capital needs.
If we have not already carried out a review of your tax position for you and you feel that there may be circumstances that you believe will impact your tax position, please arrange an appointment with our office as soon as possible to discuss your year-end planning, so there is sufficient time to implement these strategies. Our team is ready to develop the best strategy for you.
After 30 June our tax strategies are limited so don't leave it too late!
Have a question about any of the above tips or want to implement a tax effective plan prior to 30 June? For more information about tax planning, please contact us at Murray Nankivell at firstname.lastname@example.org or by phone on .
About the Author - Joel Thomas