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WHAT TO CONSIDER WHEN TAX PLANNING FOR EOFY
With the end of the financial year looming, it’s time to think about your tax planning options before 30 June 2023 hits.
We’ve curated a list of top things to focus on when organising your tax affairs for the 2023 year-end, applicable to businesses, primary producers, trusts and individuals.
Division 7a Loans
Division 7A of the Australian Income Tax Assessment Act 1936 deals with loans, payments, and debt forgiveness provided by private companies to their shareholders or associates. Understanding and managing Division 7A compliance is crucial to avoid unintended tax consequences and ensure a smooth financial year-end.
If you are a shareholder or a shareholder’s associate and you borrowed money from a company for personal use during the 2023 financial year, these loans need to be repaid or placed on a complying loan agreement by the earlier of the lodgment due date of the 2023 company tax return.
If not, there is a risk that the loan will potentially be treated as a deemed unfranked dividend and taxed in the shareholder/ shareholder’s associate hands.
In respect to existing Division 7A loans, please ensure the minimum annual loan repayment is received by the company prior to 30 June 2023.
GET IN TOUCH
Whether you are looking to maximize deductions, manage capital gains, explore superannuation strategies, or leverage any other tax-saving opportunities, our dedicated team is here to guide you every step of the way. We encourage you to explore the contents of this webpage and reach out if you have any further questions.
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