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Given the major superannuation announcement on the May 2016 Federal Budget and the Treasurer handing down a Federal Budget that targets business growth through the support for Innovation and tax reductions for small business we have considered two key time frames
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What’s important "right now", certainty before 30th June 2016?
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What’s important for 2016/2017?
RIGHT NOW
COMPANIES & SMALL BUSINESS
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Small business concessions available
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Immediate tax deductibility for asset purchases costing less than $20,000 – until 30 June 2017
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Company tax role for Year End 2016 reduced to 28.5% does not apply to Companies earnings passive income)
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Clients to consider paying maximum concessional superannuation contribution caps to take advantage of the 2nd last year of the higher contributions cap being avaialble
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Prepay rent for profit reduction
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Prepay business loan interest for profit reduction
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Prepay Insurances
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Prepay subscriptions
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Be prepared for SuperStream which starts from 1 July 2016
SUPERANNUATION
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Clients about to make large non concession super contributions should check their position first. In regards to the new $500,000 lifetime limit
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Clients about to enter into the Limited Recourse Borrowing Arrangement to reconsider their strategies
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Revisit your position on starting (TRIS) Transition to retirement income stream even if it only last for 14 months
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Maximise salary sacrifice contributions to make use of the second last year of the higher contributions cap
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Maximise concessional contributions for business clients to also take advantage of the second last year of the higher contributions cap
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Think about contribution splitting over the longer term (but starting now)
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Consider a Self-Managed Superfund Setup as there will be advantages available in segregating assets that will not be available in retail funds
WHAT ABOUT 2016/2017?
SUPERANNUATION
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Maximise concessional contributions to make use of last year higher concessional contribution caps
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Should clients realise large capital gains during 2016/2017 before fund loses part of its tax exemption
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Best treatment of pension balances to comply with the 1.6 million cap on tax free pension amounts by 30 June 2017
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Organisation of the segregation of assets in a Self-Managed Superfund to help it comply with the $1.6 million cap prior to 30 June 2017
COMPANIES & SMALL BUSINESS
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Small business entity turnover threshold to increase from $2 million to $10 million from 1 July 2016
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Access to a Range of small business concessions as previously stated as available to small business with turnover of $2 million and under only
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Option to account for GST on a cash basis and pay GST instalments as calculated by the ATO
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Reduction in Company tax rate to 27.5%
INDIVIDUALS
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Tax threshold moves to $87k before 37% tax rate kicks in from 1 July 2016
*Please bear in mind all these recommendations hinge on a Federal Election outcome and final legislation passed and is offered only with the current information available at this point of time*
Messenger Murray Picello & AustinsPeters Financial Group are happy to discuss any of the Federal Budget implications and strategies that may be available for you and your business Please do not hesitate to contact our office (direct email link below)
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