Tax Minimisation Strategies 2016
Year End 2016 has arrived. Be sure to address any outstanding issues relative to your tax position for optimal benefit.
Business clients who have not migrated to Xero, beautiful accounting software, now is the most ideal time to setup ready for trading 1 July.
Individual clients who seek a budget solution to manage their “personal business”, Xero is also recommended to be setup ready for 1 July.
Refer below for a summary of actions that you may wish to take to minimise your tax.
Please Note: The best tax planning tactics are adopted in July, not June – as early as possible in the financial year, rather than at the end of it. Proper tax planning is about getting your tax affairs in order for not just the current financial year, but for future also. Some of the actions listed may not be achievable before 30 June 2016, but will set you on track for future years. Be sure to contact us if you have questions and need to discuss further …
Business
Maximising Deductions
- Write off bad debts
- Revalue or write off stock
- Donate to a registered charity
- Pay staff or family bonuses
- Bring forward planned purchases
- Realise foreign exchange losses
- Pay superannuation contributions in full before 30 June
- Review fixed asset schedule – revalue or write off assets
- Distinguish between fixed assets and repairs & re-allocate to repairs
- Hold shareholders meeting to approve Directors Fees before 30 June
- Sell investments for gain to utilise capital losses carried forward
- Purchase assets < $20,000 before 30 June for immediate deduction
- Prepay expenses before 30 June (rent / insurances / subscriptions)
- Make concessional super contributions – take care not to exceed limits
Minimising or Deferring Income
- Defer sale / service to customers until after 30 June
- Hold off on realisation of foreign exchange gains
- Separate unearned from earned revenue (eg rent in advance)
- Revise maturity dates of term deposits for timing of interest earnings
- Sell investments for loss to offset capital gains
- Keep investments for gain until after 30 June (if no carried forward losses)
- Assess tax position of beneficiaries for family trust distributions
Restructures
Any businesses undergoing a restructure due to growth, taxation, asset protection or any related purpose, please allow plenty of time to be sure your restructure is in place ready for trading on 1 July 2016. This includes opening of new bank & card accounts.
Individuals
- Donate to a registered charity
- Contribute to your super fund from after tax earnings
- Ensure your motor vehicle log book is up to date
- Ensure your work related travel diary is up to date
- Where work travel is extensive, negotiate bona fide travel allowance in salary package
- Salary sacrifice super or work related equipment in salary package
- Re-assess your home office business use percentage
- Re-assess your home office study use percentage
- Ensure personal deductions are substantiated with invoices / receipts
- Ensure new assets for home office are substantiated with invoices / receipts
- Assess your position for access to family tax benefits / government rebates
- Structure your private, life and other personal insurances
- Prepay interest on geared investments
- Make last minute repairs to your investment properties
- Sell personal investments for loss to offset capital gains
- Sell personal investments for gain to utilise a carried forward loss
- Keep investments for gain until after 30 June (if no carried forward losses)