This strategy makes private pet ownership costs tax deductible (under certain circumstances). Having pets in the workplace involves the employer acquiring pets for the workplace (whether an office, factory or warehouse). The pets could be the standard, cat, dog, fish, ferret, bird, snake, or any other pet really. The business benefits of pets in the…
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An associate lease is an agreement where an associate of the employee (typically spouse or partner), leases an existing or replacement car to the employee’s employer. The employer then provides the car to the employee via a pre-tax salary sacrifice arrangement. I.e. The employee pays for most of the vehicle’s operating costs from their pre-tax…
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This strategy involves a discretionary trust making pre-tax trust distributions to a tax-exempt beneficiary. If the beneficiary is tax exempt (a not-for-profit organization or church) then there will be no income tax paid on that income by the beneficiary. The beneficiary does not need to be able to receive tax deductible donations (i.e. be a…
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Changing from employee to contractor (business) has the benefit of making some private expenses tax deductible. Expenses such as motor vehicle, home office, travel, etc., may become deductible. A contractor’s total expenses are normally maximised by utilising the PSI Entity strategy which may make private motor vehicle expenses and living away from home accommodation and…
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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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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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Childcare expenses are not tax deductible to employees as they are considered private in nature. If provided by an employer they are subject to FBT unless they are deemed exempt childcare benefits. Childcare benefits provided by an employer will be exempt from FBT under section 47(2) FBTAA where the employer has In-house childcare facilities. Salary…
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A remote area housing benefit is an exempt benefit under section 58ZC of the Fringe Benefits Tax Assessment Act 1986. If a housing benefit is deemed a remote area housing benefit the employer can claim a tax deduction for the employees housing costs, and no FBT is payable. This converts an employee’s private housing…
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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"
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