The ATO has released its final guidance material on trust distributions which may particularly impact those who operate a family trust. To recap, in February 2022 the ATO updated its guidance around trust distributions made to adult children, corporate beneficiaries and entities that are carrying losses. Depending on the structure of these arrangements, potentially the ATO may take an unfavourable view on what were previously understood to be legitimate distribution arrangements. The ATO is chiefly targeting arrangements under section 100A of the Tax Act, specifically where trust distributions are made to a low tax-rate beneficiary but the real benefit of the distribution is transferred or paid to another beneficiary usually with a higher tax rate.
From 1 January 2023, if you’re aged 55 years or older you may be eligible to make a downsizer contribution of up to $300,000 (or $600,000 for a couple) to your superannuation fund from the proceeds of the sale of your home where specific requirements are met. Downsizer contributions can be a great way of boosting your superannuation leading up to or after retirement. As well as the extra capital they introduce into super, the contributions can also earn investment income that is either tax-free if you commence an income stream with the funds or be taxed at a concessional tax rate while your account is in accumulation phase.
Meanwhile, as we enter into the New Year, with many economists predicting a slowing of the economy, planning your business’s cashflow is more important than ever. Studies suggest that the failure to plan cash flow is one of the leading causes of small business failure. To this end, a Cash Flow Forecast is a crucial cash management tool for operating your business effectively. In basic terms, it tracks the sources and amounts of cash coming into and out of your business over a given period.
