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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 2024 hits.
We’ve curated a list of top things to focus on when organising your tax affairs for the 2024 year-end, applicable to businesses, primary producers, trusts and individuals.
TRUSTS
Trust distribution minutes
Ensure you speak to your tax adviser to ensure your trust distribution resolutions are in place by 30 June 2024.
Be aware that if you are planning to distribute to any new beneficiaries (e.g adult children, corporate beneficiaries) for the 2024 year or beyond you need to ensure a Tax File Number (TFN) report has been lodged notifying the ATO of the beneficiaries’ TFN before the end of the financial year if not already done. This is to notify the ATO of any new beneficiaries as they have an obligation to provide their TFN to avoid having TFN withholding applied to payments at a hefty rate of 47%.
Updated guidance on Family Trust Arrangements
On 23 February 2022, the Australian Taxation Office (ATO) issued long-awaited guidance on discretionary trusts and the application and operation of section 100A of the Income Tax Assessment Act 1936 (ITAA 1936).
The ATO simultaneously issued updated guidance setting out the ATO’s current view on Division 7A, trusts and unpaid present entitlements owing to corporate beneficiaries. The guidance is set to have a significant impact on discretionary trusts in Australia, particularly in familial arrangements where trusts are used for business and investment purposes and trustees have (or intend to) distribute income of the trust to adult beneficiaries over the age of 18 (adult child beneficiaries) or corporate beneficiaries.
Learn more on this topic here, or contact an RSM adviser for more information.
Division 7A Loans – Trust distributing to a company
When deciding to distribute income from a Trust to a Company during the 2024 financial year to benefit from a lower company tax rate, ensure you have considered Division 7A consequences.
Where a Trust distributes income to a Company, the Unpaid Present Entitlement (UPE) may result in a deemed dividend if the UPE is not repaid by the lodgement due date of the Trust’s 2024 Income Tax Return or placed on a complying Division 7A loan agreement or Sub Trust Agreement.
CONTACT US
Whether you are looking to maximise 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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