Newsletters

The intention of this newsletter is to provide a brief overview of a particular topic of interest per edition. Hopefully, you will find these briefs informative, relevant and stimulating.

The topic for this edition is: year-end tax planning. As 30 June 2005 is rapidly approaching, the following is a brief checklist of year-end planning strategies.

1. Debit loan accounts in private companies. Any loans advanced post 4/12/97 to shareholders, directors and their associates should be either repaid temporary borrowing ; or reviewed for dividends payable prior to 30 June 2005; or loan agreements should be in place.

2. Accelerate deductions.

3. Defer taxable income.

4. Superannuation contributions must be paid by the employer and cleared through the bank prior to 30 June 2005.

5. Superannuation guarantees 9% levy must be paid by 28/7/05, however if you want a deduction it must be paid and cleared by 30 June 2005. This does not mean included in creditors.

6. New plant & equipment proposed to be acquired can be structured with an upfront lease payment 40% of cost paid now balance in 12 months , GST credits are recovered over the lease period.

7. Consider superannuation contributions for spouse.

8. Farmers consider using management Farm deposits.

9. Generally avoid tax schemes unless product ruling issued from ATO and commercially viable.

10. Accrue employee bonuses, must be a fixed amount and not geared to a % of net profit.

11. If considering setting up your own DIY superfund, perhaps pay contribution into a managed fund with nil entry & withdrawal fees and roll out into you own DIY fund in July 05 saving of admin, audit & compliance cost .

12. Capital loss & gains Review portfolio investments for any capital offsets. If you have a net capital gain during the year, then perhaps realise investments that result in a loss to reduce the capital gain.

13. Prepay expenses watch new rules .

14. Prepay interest on borrowings.

15. Writing off assets purchased Any individual asset costing less then $1,000 can be written off in the year acquired. If deemed small by the ATO. Normal depreciation rates for others i.e. 7.5 to 20%

16. Early Planning Most successful tax planning begins in July each year and involves consideration of structures and of transactions in advance of their taking place. Loan amounts can be planned ,cash flows and tax payments can be budgeted ,and nasty surprises can be avoided.

17. Consider purchasing an investment portfolio with a geared loan and prepaying the loan advanced protected geared portfolio. Watch interest rates.