May 2023 – Temporary Full Expensing, Early Tax Deduction on SG Contributions, Federal Budget and more…..

Do you operate your business via a family trust? If so, there is good news on the tax distribution front. The ATO, via a decision impact statement, has now conceded that it will have to amend its position on trust distributions. In the Guardian appeal, the Full Federal Court rejected the ATO’s position reimbursement agreements and section 100A of the Tax Act. What does this all mean for family trust distributions as we head towards the end of the financial year? Moving forward, there are now a number of tax-effective strategies that can be employed that will not fall foul of the ATO’s interpretation in this area. 

Are you an employer who needs to make superannuation guarantee (SG) contributions for your employees? If so, it may be worthwhile from a taxation standpoint to bring forward these SG contributions forward to before 1 July to benefit from a tax deduction this financial year. However, the timing of when SG contributions are deductible to an employer can be tricky if employers pay SG contributions for their employees via a superannuation clearing house (SCH). Employers can claim income tax deductions for April-June SG contributions made to a superannuation fund this financial year on behalf of their employees, subject to certain conditions being met.  

Meanwhile, this could be the final opportunity for your business to take advantage of Temporary Full Expensing (TFE) on depreciating assets…but get in before 1 July! The principal benefit of TFE is cashflow. TFE enables businesses to bring forward their depreciation claims, and therefore their deductions upfront, into a single year rather than having them spread out over multiple future years. Ultimately, this assists cashflow which itself is one of the main challenges faced by businesses. Most business assets are eligible including machinery, tools, furniture, business equipment etc. 

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