Below are three key areas that pay attention to during the tax planning process:
Reviewing your business records will assist in highlighting any opportunities or areas of concern. Examples of what may be identified during the tax planning process include:
Without accurate and up to date information, it will be difficult to derive a clear picture of your business performance and tax position. With the abundance of easy to use, cloud based bookkeeping packages available, there’s no excuse to be behind with your record keeping!
Your non-business income must also be considered during the tax planning process. Sources may include:
We will ensure that all deductions and opportunities relating to the above income sources are taken into consideration when reviewing your overall position.
The ATO’s data matching capabilities are increasing, so please ensure all sources of income are declared and that appropriate records are kept.
If you have a company or discretionary trust in your group structure, there are unique opportunities to minimise your taxes. There are also unique compliance requirements that need consideration prior to 30 June each year.
Operating through a company provides opportunities but without tax planning, it can create obstacles due to the strict compliance requirements.
With a company being a separate legal entity to you as the owner or director, it must be remembered that the company’s assets are not your assets. The three main ways to legally extract money from a private company as a director or shareholder are as follows:
During the tax planning process, we review optimising the level of director’s fees and dividends within commercial and legal boundaries to keep tax at a minimum.
Discretionary trusts are an excellent vehicle for tax planning due to the flexibility afforded in respect of the who, what and how much to distribute each year.
If the trust deed allows, the trustee can:
We also ensure that every trust has an annual trust distribution resolution prepared by 30 June each year. Not having a complying resolution prepared on time will subject the trust income to the highest marginal rate and the ATO has openly stated that they are focusing on compliance in this area.
Please reach out to get the process started. There are opportunities to exploit, money to be saved and the time to get started is now!