Business Matters – May 2014
How to avoid the 45% tax rate?
Did you know that income remaining in a trust is taxed at 45%? It is imperative that any trust income is correctly allocated before 30 June 2014 to avoid horrible tax outcomes. To achieve the best outcome you should:
- understand your tax position for the year ended 30 June 2014
- prepare an effective tax plan for the remainder of this tax year
- review your trust deed
- prepare compliant minutes and resolutions before 30 June 2014
It takes considerable experience to undertake these steps so professional advice is highly recommended. Please contact our office for further details.
The end of the financial year is fast approaching. Please contact our offices if you are interested in tax planning. Tax planning includes but is not limited to:
- Deferring assessable income
- Accelerating deductions
- Capital Gains Tax
- Debt & Equity implications
- Salary sacrificing
- Low income tax offsets
- Non commercial losses
- Trust distribution calculations and resolutions
- Unpaid present entitlements
- Closely held trust measures
- Family trust elections
- Division 7A
- Declaring dividends
- Fringe Benefits Tax
- Research & Development grants
- Any other special circumstances you have had during the year
Contact our offices to discuss your tax position and end of year strategy.
Following from tax planning, here is a great way to increase your tax deductions – donate to our Oxfam team at https://trailwalker.oxfam.org.au/donate/payment/16223 . I am part of a 4 person team which will undertake the arduous 100km trail through the D’Aguilar National Park by foot and possibly on hands and knees later on! We have to cover the 100km distance together so as a team we will cover 400km.
Now why would we enter into such a punishing event? We are raising funds for Oxfam who in turn support people in dire situations. We are very fortunate to have the facilities we have and for only a few dollars we can greatly assist someone far less fortunate than ourselves. Click on this link if you would like to see how helpful your donation will be:https://trailwalker.oxfam.org.au/3852/the-difference-you-make
Our team name is “SharpDull” which is actually the meaning of “Oxymoron”. Feel free to ask if you would like to know why we chose this interesting team name or if you would like to hear more about this interesting event.
As expected it was a painful budget but I am cautiously optimistic that it will achieve long term gains through short and medium term pain. Highlights/lowlights from the budget:
- Paid parental leave from 1 July 2015 paying up to $50,000 over 6 months
- Pension age increase to 70 by 1 July 2035
- Extra costs to see a doctor
- Tightening up on welfare benefits (Unemployment, Family Tax Benefits, Newstart, etc)
- 2% levy on incomes exceeding $180,000 for 3 years from 1 July 2014
- Indexation of fuel excise to fund infrastructure spending
- Reduction in the corporate tax rate by 1.5% from 1 July 2015
- Increase in the corporate tax rate for the 3,000 largest companies to fund the paid parental leave
- Employer incentives with staff over 50 years old
Just a reminder these are only proposed changes so they may change substantially before they come into effect. Click here to read a more thorough analysis of the budget.
This newsletter includes the following interesting articles:
- Common year end mistakes
- Difficult conversations at work
- ACCC targets franchises
- Employer penalties for unpaid super contributions
- Refund policies
- What is “SuperStream”?
- Advertising fine print