Tax planning strategies to be implemented before 30 June 2017

Article written by West Carr and Harvey Accountants and used with permission

To do list
This year, the lead up to the end of financial year is more important than usual as it provides some unique new tax planning opportunities. Now is a great time to take advantage of recent legislative changes most notably, the changes to personal tax rates from 1 July 2017 and a substantial increase to the small business entity turnover threshold. This will provide many more businesses with access to deprecation and prepayment benefits and a lowering of the company tax rate for eligible small businesses.

Here are some tax planning initiatives and year end considerations which may help you:

Individuals
Now is a great time to prepay any non-business / work related and investment expenses
Beginning and completing repairs to any depreciating assets (such as rental properties) before the new financial year will more effectively manage tax implications.
If you are running a business at a loss, perhaps consider whether any of the non-commercial loss tests can be satisfied to offset the loss against your other income.
Farm Management Deposits – now is a good time to consider whether deposits or withdrawals should be made before year end.
Have you made any capital gains as an individual this year? If so, planning may be required to manage this.

Businesses including Small Business Entities
Writing off any bad debts is a great start!
We suggest scrapping any depreciating assets no longer in use (such as motor vehicles/phones/laptops that are no longer required)
Paying superannuation before 30 June means you will claim the deduction in 2016/2017.

For small business entities:
– You can bring forward your acquisition of assets to the current year to access the $20,000 immediate write off concession that has been extended for the 2016/17 financial year
– Establishing a prepayment schedule of up to 12 months can be beneficial.
Trust distribution resolutions are required by 30 June or earlier dependant on the requirements of the deed.
Company tax rate reduction to 27.5% for small business entities. Additionally, many more companies will be eligible based on the increase in SBE turnover threshold to $10m per annum.
Have the minimum loan repayments been satisfied for shareholders and associates? If not, now is the best time to get this finalised!