| As we approach the end of financial year, we thought we would take the time to remind clients of some key compliance matters and tax planning tips. Concessional super contribution top-up Current year concessional contribution cap is $27,500. If you consider topping up Tax Deductible super contribution, we suggest you make the contributions asap and allow your fund sufficient time to process the deposits and allocate contributions in 2024 tax year. Note for those with a Total Super Balance (TSB) under $500,000 as of 30 June 2023, you can carry forward unused cap amounts from up to 5 previous financial years. Minimum Pension 2024 Ensure minimum pension requirements are met by 30 June 2024. Employer Single Touch Payroll/Reportable Fringe Benefit Amounts When reporting EOFY Single Touch Payroll finalization, please ensure Reportable Superannuation and Reportable Fringe Benefit Amounts are included. Note car benefits arising in respect of an FBT-exempt electric car are included for the purposes of determining a relevant employee’s Reportable Fringe Benefits Amount. Instant Asset Write-off The temporary full expensing concession ended on 30 June 2023. From the 2024 year, an instant asset write-off will only be available for eligible depreciation assets under the simplified depreciation rules. Based on proposed legislations, broadly speaking an SBE (turnover less than $10 million) or medium-sized business (turnover between $10 million and $50 million) may immediately write off certain depreciating asset that costs less than $30,000 in 2024 year if the asset is installed and ready to use before 30 June 2024. The amendment to the Bill (to increase the threshold to $30,000) returns to the Senate in late June 2024 pending legislation. Business Deductions Consider writing off and scrapping obsolete stock. Consider debtors ledger review and bad debt write off. Consider prepayments. Bonus deduction – business energy efficient assets In the 2023/24 Federal Budget, the Government announced (not yet legislated) its intention to introduce a new energy program aimed at lowering business power bills and emissions for small businesses. The bonus deduction is 20% up to $20,000 on eligible energy efficient depreciation assets such as electric split system air conditioner, smart TV, desktop computer, energy saving fridges. Trustee Resolutions A general reminder to trustees who wish to make beneficiaries presently entitled to trust income for the 2024 income year should ensure their trustee resolutions are effective. This includes where trustees may want to make beneficiaries specifically entitled to franked dividends and capital gains included in that income subject to trust deed. Super Guarantee Percentage General super guarantee percentage increase to 11.5% effective 1 July 2024. Superannuation contribution caps from 1 July 2024 From 1 July 2024, concessional contribution cap is $30,000; From 1 July 2024, the non-concessional contributions cap is $120,000; Bring-forward cap first year applicable to 2024-2025 year is • $360,000 for those TSB less than $1.66 million as of 30 June 2024; • $240,000 for those TSB $1.66 million to less than $1.78 million as of 30 June 2024; • $120,000 for those TSB $1.78 million to less than $1.9 million as of 30 June 2024; • $Nil for those TSB $1.9 million or more as of 30 June 2024 Upcoming legislation changes and proposed legislation changes As stated in the last newsletter, stage 3 individual tax cut commences from 1 July 2024. Consider the timing of derivation of income and the timing of asset sale in your tax strategies. The proposed Division 296 tax (new tax applicable to members with Total Super Balance exceeding $3 million) is to apply from 1 July 2025. We recommend you commence reviewing superannuation strategies and start looking for arm’s length robust valuation for properties and unlisted assets held by your super funds. Another piece worth mentioning is the proposed changes announced by the Government that it will amend the tax law to deny deductions for ATO interest charges. This measure is not yet law. This measure will mean that taxpayers will no longer be able to claim deduction for general interest charges (GIC) and shortfall interest charges (SIC) incurred on or after 1 July 2025. The above is a brief summary of planning tips, and before implementing any strategy we recommend you contact us to seek advice specific to your position. Loewy Consulting Partners Pty Ltd ABN 27 543 807 977 Liability limited by a scheme approved under Professional Standards Legislation Important: Clients should not act solely on the basis of the material contained in this newsletter. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Client Alert is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval. |
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