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Irina Hollander & Associates Pty Ltd Chartered Accounts

End of Year Tax Minimisation Tips & “To Do” Items

June 30 is looming and it is once again time for tax planning! There are things you could be doing prior to the year end to reduce your next tax bill and improve your business performance.

Below is the list of the most effective tax-saving tips for your consideration, depending on your circumstances.

 Property investors:

• If you are thinking to sell your property, be aware of the date on the sale contract. The date of the contract and not the date of settlement determines the timing of the capital gains tax event. You may be able to defer the taxing point of your capital gains for another 12 months.• Pre-pay non-capital expenses, such as interest and insurance.

• Inspect your existing property before year end and claim the travel expenses.

• Order and pay for a tax depreciation report to claim the quantity surveyor’s fee and the maximum depreciation against your rental income.

Business owners:

• Spend and claim an immediate deduction for business assets worth $20,000 each, but only if you have a real business need to invest.  Watch out for installation & delivery costs, as they do get included in the $20,000 limit.• Small employers (19 or fewer employees) must meet the SuperStream standard by 30 June 2016. Small business owners without external employees who pay their own super to their SMSF are exempt from this requirement. Please refer to the ATO’s step by step guide to implementing the super stream in your business at https://www.ato.gov.au/super/superstream/employers/employer-checklist–a-step-by-step-guide/

• If your business turnover is less than $2mln a year, prepay up to 12 months worth of predictable expenses.

• Pay superannuation obligations for the quarter ending 30 June by 25 June to claim the deduction in 2016.

• Be prepared to provide PAYG Payment Summary Statements to your employees by 14 July 2016 and send the ATO your payment summary annual report. Extensions exist to this deadline. If in doubt, please contact your bookeeping specialist or your tax accountant.

• Use the latest tax rates to calculate withholding from 1 July.

Employees:

• Pre-pay superannuation contributions, if your 2017 circumstances are likely to change. This very valid “reserving” strategy requires a careful execution. You will need to discuss it with your tax accountant before attempting.• Consider salary sacrificing into super. You must remain under your age appropriate limits not to get into trouble. Please remember, amounts salary sacrificed cannot not be accessed by you until retirement.

• If you had a salary sacrifice into super arrangement in respect of 2016 and you would like it to continue, you need to instruct the HR department to re-commence this arrangement from the 1st of July.

• Lodge a PAYG withholding variation application to take effect from 1 July, if you are normally in receipt of a sizeable tax refund. This will improve your personal cashflow

SMSF Trustees:

• If your SMSF holds a property, please obtain the property market valuation as at 30 June 2016. This is an audit requirement.

• If your SMSF holds a commercial property leased to your business, you are also required to obtain a rental appraisal. A friendly real estate agent will be able to produce both written market valuation & rental appraisal at no cost to you.

Please ensure you consult your tax adviser to gain a full understanding of precisely how you may be affected by any of the above tax-saving tips. Your accountant will also be able to recommend other, specific to your circumstances, strategies.

Irina Hollander CA offers a free 1 hour initial consultation

Disclaimer

The information provided above is of a general nature only and should not be relied upon as a substitute for specific professional advice.