Category Archives: Trusts

Tax Planning Starts Now

There’s four key things that all business owners MUST consider RIGHT NOW.

Two of them are brilliant wealth creation ideas.

Please read on!

30 June is only 8 weeks away so we need to make the most of the time we have for tax planning. Too often, we end up suffering because we have procrastinated and not made a positive decision to do something. If we all leave your tax planning until June, quite frankly there may not be enough time to do anything significant to legally reduce your tax.

So for 2014, our invitation to you is to START NOW with your tax planning.

4 Key Tax Planning Strategies

These are:

  1. Establish a Self-Managed Super Fund (SMSF) – How to make it your family’s wealth VAULT and legally pay NIL tax at retirement.
  2. Debt Optimisation – Pay off your home loan sooner, minimise non-deductible interest and maximise your tax deductions for investments.
  3. Trust Distribution Resolutions needed BEFORE 30 June 2014 – or pay up to 46.5% tax on trust profits.
  4. General tax planning strategies – Key items that mean $ in your pocket.

How our Tax Planning Process works

First of all, we request from you details of your expected income and business profits for the 2014 tax year (1 July 2013 to 30 June 2014). This includes all wages (employment income), interest and dividends and rental income received, business profits (or losses), and any capital gains/losses you expect to make.

Based on this information, we estimate your taxable income and your tax payable BEFORE any tax planning strategies.  For example, we may calculate (based on your information) that you may have a taxable income of $200,000 for 2014.  This would result in $66,547 tax and Medicare levy payable.

Secondly, we discuss all of your tax planning options. Some of these may be things to do in your business, and some of these may be investment or wealth creation options.

Third, we provide you with a report that explains in plain English the tax planning strategies we recommend and exactly how much tax you will save.

And finally, we provide you with an easy-to-follow Action Plan to ensure that both you and we can do everything that needs to be actioned before 30 June.

Contact our office TODAY to start your tax planning for 2014. 

Don’t wait until June!

Posted on the 07-05-2014

If you have a Family Trust you need to read this

Trust Distributions Resolutions

needed BEFORE 30th of June, 2014 – or pay up to 46.5% tax.

If you have a Family Trust (also known as a Discretionary Trust) YOU NEED TO READ THIS!
 
From the 2011/12 financial year, Trustees who distribute the income of a Trust through a resolution to beneficiaries must do so BEFORE the end of the financial year (June 30 for most of our clients) for the resolution to be effective in determining who is to be assessed on the Trust’s income.
 
This is a recent change to the Trust taxation laws that applies to this financial year, and future years.
 
If a Trustee fails to make a resolution to appoint the income of the Trust before the end of the financial year, the Trustee may be assessed by the ATO on the Trust income at the highest marginal tax rate (i.e. 45%), rather than the intended beneficiary(s).
 
Before 2012, the ATO allowed a certain amount of discretion as to when a resolution could be prepared.
 
However, the ATO now takes the view that following the recent decision in Colonial First State Investments v FC of T 2011 ATC 20-235, trustees must now resolve to distribute the current year’s income on or before year end to ensure the beneficiary is presently entitled to trust income.
 
What You Need to Do
 
You need to provide us with a Profit & Loss Statement for each Family Trust that you have for the period 1 July 2013 to 30 April 2014. You also need to send us details of all income earned by all family members during the period 1 July 2013 to 30 April 2014, and your estimated income for the period 1 May 2014 to 30 June 2014, including any capital gains.
 
We will then review all options for you, and recommend the most tax effective manner to distribute your Family Trust profits. We will then prepare the appropriate Trust Distribution Resolution for you to sign before 30 June 2014.
 
Contact our office TODAY (02) 9531 0922, if you have any questions about this information.

Your action now may save you thousands of dollars of unnecessary tax payments!

 

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