Malcolm Turnbull’s Innovation Statement released on 7th December 2015 provides tax incentives for early stage investors. The tax incentives will encourage early stage investment in innovative start-ups and should boost growth by fostering new enterprises and promoting entrepreneurship. Further details are available at National Innovation & Science Agenda. The tax incentives apply from 1st July…
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For businesses operating on an accruals basis, income that is subject to a client dispute may be deferred until the dispute is settled. The disputed income should be recorded in the financials as a liability, and only recorded as income when the dispute is finalized.
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Both common law partnerships and written partnership agreements allow the partners of a partnership to vary the amount a partner draws as a ‘partner salary’. To be effective for tax purposes in an income year, the agreement must be entered into before the end of that income year. The partner’s salary should be based on…
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The lifetime CGT cap for 2017/18 is $1,445,000. This is available for capital gains that utilise the small business 15-year exemption or the small business retirement exemption. But only $500,000 can be contributed in respect of the retirement exemption. The contributions are not tax deductible to the taxpayer and not accessible to the super…
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This strategy involves ‘evening up’ the marginal tax rates between spouses. Tax is saved if income can be moved from the spouse in the highest tax bracket to the spouse with the lowest tax bracket. The income splitting rules are: All investments earning income should be in the name of the lower-earning spouse…
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Most forms of income earned by professional sportspeople is personal services income (PSI) and is assessed to the sportsperson individually. This includes salary, competition winnings, prizes, and appearance fees. This income cannot be split with family members or taxed at company rates. In contrast, all endorsement income is genuine business income generated by the goodwill…
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Taxpayers operating a winery receive all the standard business deductions plus the additional primary production related deductions including: Immediate deduction for the cost of fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills. Access to the Farm Management Deposit Scheme. Tax averaging. In addition, since 2004 wine makers…
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Investment Loss (TNIL) is an individual’s taxable losses from rental and share investments. The TNIL is added back to an individual’s taxable income to calculate the tax related concessions and obligations for: Medicare levy surcharge. 15% additional tax on concessional contributions (Division 293). Child support payments. $1,000 up-front reduction for discounts on employee shares/options. Senior…
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This tax strategy allows an employee, who is also separately carrying on a business as a sole trader, to claim depreciation on the cost of an asset in their business that has been fully reimbursed by their employer. This strategy involves ‘double dipping’ as the employees business depreciation claim is unaffected by their employer…
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The cost of providing in-house recreation facilities to employees is deductible if it is located on the employer’s premises. Examples of in-house recreational facilities are a tennis court, a swimming pool, gymnasium or games room provided on an employer’s premises for staff use on work days. The employer can claim a deduction for the expenses…
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"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2