Year end is coming!

Big picture year-end tax considerations

Year-end tax planning is a crucial time for evaluating whether the current structure is fit for purpose both now and into the future. This includes looking at the interaction of trusts, companies, self managed super funds (SMSFs), Private Ancillary Funds, and other entities.

It is also important to consider any changes in your personal life during the year. Perhaps life is largely status quo or perhaps there has been a realisation of a significant family asset that requires additional tax planning. This additional planning might involve Small Business Capital Gains Tax concessions, donations, superannuation contributions and other actions that need to be completed before 30 June.

Stepping away from tax considerations, it is also beneficial to review personal insurance and estate plans. Ensuring that personal insurance is up to date and adequately covers current needs is crucial for financial security. Similarly, reviewing and updating estate plans can provide peace of mind that assets will be distributed according to the client's wishes and in the most taxefficient manner.

Businesses-what should you be taking into consideration?

Key year-end revenue-related tax planning considerations for businesses include reviewing contracts to determine if income invoiced may be considered revenue in advance for income tax purposes.

From a deduction perspective:

• Review the accounts receivable ledger to follow up any outstanding debts and to formally write off any debts that are not collectable.

• Make sure all capital assets have been included on the asset depreciation schedule, consideration has been given to the instant asset write off and all depreciated assets are still held by the business.

• Review your inventory listing to ensure obsolete and damaged stock has been properly accounted for.

• Any superannuation payable by the business is paid prior to 30 June, as superannuation payments are deductible based on cash payment and not accruals.

Although not 30 June time-sensitive, have the various government grants including Research & Development concessions been considered?

From a business owner perspective, has consideration been given to the remuneration strategy of salaries versus dividends as well as the impact of any funds withdrawn from the business that may be subject to Division 7A provisions1 , [which prevents private companies from making tax-free distributions of profits to shareholders or their associates through payments, loans or forgiven debts].