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A few “To Do” actions before 30 June 2017

Peter Cramer

5 weeks to go!

Here are a few helpful tips for businesses and individuals to complete prior to the End of Financial Year (EOFY).

For Businesses

  1. Update tax planning so you are aware of your tax position – so in turn you can take action to minimise tax if required. See your GTP accountant.
  2. Great news! – The definition of Small Business has been changed to include businesses with less than $10m turnover. This allows for trade up on plant without tax profit, pre-payment of expenses, operating on a cash basis and other benefits.
  3. Look to acquire necessary plant items < $20,000 – get a 100% deduction. (This special write-off has been extended to 30 June 2018 via the Budget).
  4. Work out what business expenses can be pre-paid so as to bring them into this tax year – then get them paid!
  5. Make sure super contributions for employees and self employed owners are actually paid before 30 June (if you want the deduction this year).
  6. Consider refinancing debt into a better deal – and maybe fixing some debt which may enable you to pre-pay interest for the next 12 months.
  7. Make sure you have insured your greatest asset – You! Loss of income insurance is just one of life’s must-haves. Also ensure you have Death and TPD cover to provide a lump sum to protect those you leave behind. Don’t forget to review your business insurances to ensure adequate cover of all assets and public liability.
  8. If in the process of purchasing assets, constructing sheds or storages – get them installed and ready for use before 30 June so as to be able to get tax savings this year.
  9. Leading up to the start of a new Financial Year is a good time to review your business structure and re-look at its tax effectiveness and the asset protection it provides. Businesses evolve over time and a change in structure is often advised. See GTP for a check up!

For Individuals

  1. Thinking of buying an ‘off the plan’ investment property? The Stamp Duty concession for ‘off the plan’ ceases on 1/7/17. Children looking to build their first home in regional Victoria? Wait until after 1/7/17 for extra First Home Owners Grant ($20,000) and stamp duty exemption on first home up to $600,000.
  2. Buying a rental property? As from 9/5/17 you won’t be able to claim depreciation on chattels included in the purchase price (now to form part of cost base). However if you purchase chattels thereafter – they are ok.
  3. Get your personal super tax deduction made before 30/6/17. $35k deduction for age 50+ and $30k for under age 50. From 1/7/17 this drops to a flat $25,000. Also, make sure you change any salary sacrifice arrangements to the lower figure for next year.
  4. A good time to plan for next year’s salary sacrifice strategy so as to increase the after tax value of your wages.
  5. Perfect time to sit down with your spouse/partner/family and discuss and document your goals! “Goals written down and kept in sight are far more likely to be achieved than those that are in your head”. Stop procrastinating and do it! (Refer to previous Blogs on this topic).
  6. Anywhere near retirement? Consider your level of superannuation and if less than $1.6m – examine ways to contribute more to super as “Non Concessional” – ie from after tax dollars. Still a great investment vehicle with wonderful tax concessions. See GTP for an explanation of the rules. If less than age 65 may be able to allocate assets and cash up to $540,000 per person into super. (Important rules apply – don’t try this on your own!)
  7. Sold any shares or assets for a profit in 2016/17? Look for any assets showing a paper loss and maybe it is time to sell those and create a capital loss to offset gains. Rules apply so tax advice might be useful.
  8. Tell your spouse/partner/children that you love them and appreciate them!
  9. Take some time to educate your children on the facts of financial life. If you are unsure what they are – bring them in to your next visit with us and let’s discuss it with them. You must give positive financial examples to your children so they do not go into adulthood with an “expectation”. The quickest way to ruin your children’s financial future is give them whatever they ask for!
  10. On another tack – try the following New Tax Year resolution: Read at least one business or personal development book before Christmas.

Wishing you all a Happy New Financial Year (1/7/17) and may you and your business thrive!

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