Tax planning is the difference between an accountant who tells you what you owe in October and one who changes what you owe in May. Every strategy below is ordinary, legal and used by well-advised businesses every year. Almost all of them only work if the decision is made and documented before 30 June. After that, the year is closed and you are reporting, not planning.
Why the timing matters
The ATO taxes what happened in the year. A trust distribution has to be resolved by 30 June. A superannuation contribution has to be received by the fund by 30 June. An asset has to be installed and ready for use by 30 June. A bonus has to be committed by 30 June. Discover any of these in September and the option has gone.
That is why our tax planning runs in April and May, with real year-to-date numbers from monthly bookkeeping, not an estimate from last year’s return.
What a tax planning session covers
- Profit forecast to 30 June. Actuals to date plus a realistic estimate of the last quarter, for every entity in the group.
- Who ends up with the income. Trust distributions, company dividends, salaries and bonuses, modelled against each family member’s and entity’s marginal rate.
- Superannuation. Concessional contributions for the owners up to the cap, catch-up of unused caps where eligible, and making sure employee super is paid before 30 June so it is deductible this year rather than next.
- Timing of income and expenses. Prepaying deductible expenses, bringing forward committed costs, writing off bad debts, reviewing stock valuation, scrapping obsolete assets.
- Asset purchases. Whether the instant asset write-off or accelerated depreciation applies to anything you were going to buy anyway. Buying equipment just for the deduction is rarely worth it; buying it two months earlier often is.
- Division 7A. Any money taken out of a company by a shareholder or their associate has to be repaid, declared as a dividend or put on a complying loan agreement before the company’s return is lodged. This catches more founders than anything else on this list.
- Structure. Whether the entity you are trading in is still the right one, whether a bucket company should receive distributions, and whether the group is ready for the next thing: a new site, a partner, a sale.
- Capital gains. Anything sold this year, and whether the 50% discount or the small business CGT concessions apply. Anything you are thinking of selling next year, so it can be structured now.
Strategies that are usually available
| Strategy | Who it suits | Must happen by |
|---|---|---|
| Trust distribution resolution | Any trading or investment trust | 30 June |
| Concessional super contribution | Owners with capacity in the cap | Received by fund before 30 June |
| Pay June quarter employee super early | Any employer | Received by fund before 30 June |
| Prepay 12 months of rent, insurance, subscriptions | Small business entities | Paid before 30 June |
| Bucket company for excess trust income | Trusts distributing more than the family can absorb at low rates | Company exists before resolution |
| Write off bad debts and obsolete stock | Anyone carrying either | Documented before 30 June |
| Division 7A loan agreement or repayment | Companies with shareholder loans | Before lodgement, best before 30 June |
| Bring forward committed asset purchases | Businesses eligible for accelerated deductions | Installed and ready for use by 30 June |
Thresholds and caps change most years. We apply the current ones in the session; do not act on a figure you read online without checking it.
What tax planning is not
It is not schemes, offshore arrangements or anything that needs a promoter. The ATO publishes the strategies above itself. The skill is in applying them to your group with real numbers, early enough to matter, and documenting them so an audit is a non-event.
How we run it
Tax planning is part of the core engagement for every client with a trading entity, not an add-on. Your designated team books the session in April or May, sends the forecast beforehand, and leaves you with a written plan: what to do, by when, and what it saves. If you came to us for a second opinion, the same review runs over your last two years to show what was missed.