Tax Planning 2024

For businesses to maximise their cash position, they should consider any tax planning opportunities before 30 June.

Tax planning can assist you with the following:

  • Maximising tax efficiency
  • Reducing the likelihood of unexpected tax liabilities
  • Allowing for tax liability funding options to be proactively considered
  • Allowing for potential tax issues to be addressed before they become a problem
  • Capitalising on tax incentives
  • Capitalising on opportunities to grow personal wealth

Click the link below to download our Tax Planning Checklist:

ATO scrutiny on trust distributions increasing

The ATO’s additional guidance on trust distributions shows this is an area it is likely to check closely. The ATO has also recently been awarded more funding in the budget to tackle trust compliance.

Responsibilities and Considerations

Complete Trustee Resolution by 30 June:

Each financial year, trustees must determine which beneficiaries are entitled to the trust income.

Review Trust Deed Regularly:

Understand who the eligible beneficiaries are and the types of income that can be distributed according to the Trust Deed.

Tax Efficiency:

Consider the tax profiles of beneficiaries to ensure tax-efficient distributions.

Importance of Proper Trustee Resolution

Section 100A Compliance:

Ensure that the trust distribution entitlements are valid and that each distribution creates a legal entitlement for the beneficiary.

Greater ATO Focus:

With increased scrutiny on trust structures, accurately completing the Trustee Resolution is crucial for compliance.

Division 7A Loans

The ATO have recently made it aware that Division 7A compliance is going to be an area of focus and audits in the coming year.

Minimum Annual Repayments:

Division 7A loans require minimum repayments of principal and interest each year until fully repaid.

Repayment Methods:

These repayments can be made either through cash payments by 30 June or by declaring a dividend, though the latter may increase tax liability.

Interest Rate Change:

The ATO benchmark interest rate has increased from 4.77% in FY23 to 8.27% in FY24, impacting repayment amounts and the amount of tax payable on the deemed interest income.

Planning Considerations:

Carefully plan the funding of repayments, considering the significate interest rate increase.

If you would like to book a Tax Planning meeting, contact your Harris Black team member.

Brentnalls Conference – April 2024

In April, the Directors and Managers attended the 54th Brentnalls Affiliation bi-annual conference, held in the vibrant city of Melbourne.

The conference commenced with the Women in Brentnalls committee conducting a panel discussion with new equity owners and allowed them to share their journey so far. Following this, the Tax Advisory and Business Advisory groups came together to share their knowledge and discuss how each firm approaches these areas.

The next two days featured a lineup of speakers covering a range of topics:

  • Demography Insights by Simon Kuestenmacher: Analysing population trends and their impact on business dynamics.
  • Client Relationship Management with Alan Fitzgerald: Strategies for building enduring client relationships and the impact of AI
  • Empowering Advisors of the Future with James Mason: Navigating digital disruption and evolving advisory roles.
  • Navigating TASA Obligations with Robyn Jacobson: Compliance strategies under the Tax Agent Services Act.

The firms presented an update of the last 6 months and covered the operational areas of their firm including marketing, systems and processes and HR. These provide great discussion and an amazing learning experience for all attending.

The Brentnalls Affiliation continues to exemplify the power of unity and collaboration, empowering its members to strive for greatness collectively, while supporting each other on their individual journeys to excellence.

Meet The Staff – Dayne Larosa

Allow us to introduce Dayne, the newest addition to the Harris Black team. Joining us as an Administrative Assistant, Dayne brings with her enthusiasm, warmth, and a passion for providing exceptional support. Let’s delve into Dayne’s world and learn more about her unique qualities and experiences.

If Dayne could only eat one meal for the rest of her life, it would be Adobo with rice, a dish she loves to cook along with other favorites like Tang and coffee jelly. Her go-to drink is Coke, and her hobbies include singing, cooking, and watching action movies. She aspires to perfect her singing skills and dreams of owning a Lamborghini.

Dayne’s ideal superpower would be flying, granting her the freedom to travel anywhere. With a million dollars, she would embark on a journey around the world. The most relaxing place she has ever been is Palawan in the Philippines.

Given the chance to share a meal with any four individuals, Dayne would choose her grandmother, grandfather, Kobe Bryant, and Paul Walker. A guiding principle in her life is the quote, “Do not do unto others what you do not want others do unto you.”

In the coming months, Dayne is eagerly anticipating her daughter’s 7th birthday party. We look forward to seeing Dayne thrive and contribute to the Harris Black team with her remarkable qualities. Welcome, Dayne!

Important Tax Dates

5 June 2024

  • Lodge tax return for all entities with a lodgment due date of 15 May 2024 if the tax return is not required earlier and both of the following criteria are met:  
    • non-taxable or a credit assessment in latest year lodged
    • non-taxable or receiving a credit assessment in the current year.

21 June 2024

  • Lodge and pay May 2024 monthly business activity statement.

25 June 2024

  • Lodge and pay 2024 Fringe benefits tax annual return for tax agents if lodging electronically.

Federal Budget 2024-2025

The Government has handed down a ‘no surprises’ budget with little in the way of any substantive tax measures, focussing more on the immediate challenge of cost-of-living increases while remaining mindful of adding to inflationary pressure.

In this special edition Harris Black newsletter, we summaries the key proposals from the 2024-25 budget.

Individuals & Families

Personal income tax cuts confirmed – From 1 July 2024

As previously announced, the Government has legislated permanent tax cuts for all Australian taxpayers from 1 July 2024.

Relative to the previous Stage 3 plan, the redesigned cuts broaden the benefits of the tax cut by focussing on individuals with taxable income below $150,000.

The tax rates and income thresholds from the 2024-25 for residents (as already legislated) are:

• taxable income up to $18,200 – nil;

• taxable income of $18,201 to $45,000 – nil plus 16% of excess over $18,200;

• taxable income of $45,001 to $135,000 – $4,288 plus 30% of excess over $45,000;

• taxable income of $135,001 to $190,000 – $31,288 plus 37% of excess over $135,000; and

• taxable income of more than $190,001 – $51,638 plus 45% of excess over $190,000.

$300 energy relief for households – From 1 July 2024

Households will receive a credit of $300 on their energy bills credited as automatic quarterly instalments across 2024-25.

Energy relief will also be provided to eligible small businesses in the form of a $325 rebate.

Capping indexation of HELP debts – From Loans that existed on 1 June 2023

As previously announced, the Government will cap the HELP indexation rate to be the lower of either the CPI or the Wage Price Index (WPI) with effect from 1 June 2023.

The change will apply to all HELP, VET Student Loans, Australian Apprenticeship Support Loans and other student support loan accounts that existed on 1 June 2023.

By changing the calculation of HELP indexation from 1 June 2023, the indexation rate is reduced from:

• 7.1% to 3.2% in 2023, and
• 4.7% to around 4% in 2024.

The change resolves an issue for more than 3 million Australians with a HELP debt when the CPI indexation rate spiked to 7.1% last year.

An individual with an average HELP debt of $26,500 will see around $1,200 reduced from their outstanding HELP loans this year, pending the passage of legislation.

Superannuation on paid parental leave – From 1 July 2025

As previously announced, from 1 July 2025 superannuation will be paid on Paid Parental Leave payments from 1 July 2025.

Eligible parents will receive an additional payment based on the superannuation guarantee (i.e. 12% of their PPL payments), as a contribution to their superannuation fund.

This payment is in addition to the changes that saw families provided with an extra two weeks of leave (22 weeks total), which will increase to 24 weeks from July 2025 and 26 weeks from July 2026.

Business & Employers

$325 energy relief for small business – Date 1 July 2024

Around one million small businesses will receive $325 off their energy bills over 2024–25.

The support will apply as an automatic quarterly credit to energy bills.

$20k Small business instant asset write-off extended – Date 1 July 2023 to 30 June 2025

Small businesses, with an aggregated turnover of less than $10 million, will be able to immediately deduct the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2025.

This measure extends the 2023-24 Budget announcement to the 2024-25 financial year.

“Immediately deductible” means a tax deduction for the asset can be claimed in the same income year that the asset was purchased and used (or installed ready for use).

The increased small business instant asset write-off announced in last year’s Federal Budget is not yet law.

Senate amendments proposed increasing the threshold from $20,000 to $30,000 and expanding the measure to apply to medium entities (aggregated turnover of less than $50m).

How can we help you?

Today’s financial environment demands a regular review of strategy and a focus on execution.