azure redback presentation tax 22 nov11
TRANSCRIPT
03/05/23 1
Getting the better of the tax man:
10 strategies for managing and limiting your tax burden
Presented by: Michael Derin, Managing Director, Azure Group
03/05/23 2
Strategies to manage tax
Tax cannot be avoided but it can be managed
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1. Tax planning Help to understand & reduce tax burden for both
business & owner Pre-June on accurate results to end of March Good structure & consider the whole group, family
& shareholders Manage profits & tax over a number of years Should have long term focus
Consider future plans & impact future tax liabilities eg asset sale/purchase, investment in new equipment, selling the business, property, super & succession planning
03/05/23 4
2. Account record keeping Managing tax effectively is impossible without
accurate, reconciled & up-to-date financial accounts – like flying blind
Balance sheet &
P&L
Realistic P&L
& cash flow
forecasts
Defined short &
long term goals
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3. Director/shareholder loans Confusing & complex area Interlinked with family trusts & income streaming
Example - Director/shareholder draws down profits from company but does not declare income
Solutions Repay loan before 30 June Pay dividends
Consider costs of Division 7A loans – is it worth it?
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4. Staff wages & benefits Contractors v employees FBT – entertainment & car
benefits, associated party benefits, FBT gross up
Traps of workers’ compensation, payroll tax & SGC
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Minimising taxEveryone must pay tax but by adopting
smart tax planning strategies you can limit your tax liability so you don’t end
up paying more than you should
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5. Superannuation Can be the best tax effective structure in Australia Every dollar contributed up to age base limits can
save you tax Limits to how much can be contributed
$25K pa or $50K pa for those over 50 with a super fund below $500K
Excess contributions tax SMSF – “In house assets” Spouse contributions
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6. Splitting income between people Bramford case Allows you to distribute wealth
for maximum tax benefits, particularly if one spouse isn’t working
Distributing wealth to children – new restrictions
Need to be aware of tax limits, ie higher tax rate kicks in at $80K pa
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7.Cash basis for small businessesProfits on cash basis may be less
than accruals basis, reducing tax liability
PrepaymentsAccelerated depreciation
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8. Managing income tax across financial years
Cash v accrual basis makes a differenceInventory/trading stock managementEmployee SGCDiffered & unearned revenue Timing of expensesDebtors – bad debtsManaging employee leaveTax losses – franking credits
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9. Concessions & deductions Donations Bad debts Staff bonuses Pay staff super on time Pre-paying expenses Write off obsolete trading stock/inventory Repairs to workplace and/or equipment Small business assets, obsolete items, scrap
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10. Capital gains - business Trapping gains in companies Small business CGT concessions
50% discount 50% active asset reduction Super rollover relief – life time
cap $500k pp Rollover of assets relief
