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.

This edition features pieces on:

  • Upcoming federal budget: It’s now less than a fortnight until the Federal Budget which is to be handed down on 9 May. Some of the things to look out this year potentially include an announcement on the future of temporary full expensing and its possible replacement, the fate of the so-called stage three individual income tax cuts, and much more.
  • New reporting requirements for SMSFs: From 1 July 2023, trustees and directors of SMSFs must report certain events that affect their members transfer balance account quarterly. These events must be reported by lodging a ‘transfer balance account report’ (TBAR).
  • Financing motor vehicles: One of the most common decisions facing business is how to finance and account for the acquisition of a motor vehicle. There are numerous ways of doing so, including outright purchase, lease, chattel mortgage, and hire purchase…with each resulting in differing accounting, taxation and GST treatment.
  • Temporary full expensing…get in quick: On current legislative settings, the depreciation rules for business are set to change for the worse from 1 July. If you are considering investing in your business, it may be advantageous to get in before this date to take advantage of temporary full expensing.
  • Bringing forward super deductions: Businesses who pay superannuation guarantee contributions to their workers can optimize their 2022/23 tax position by bringing forward these contributions to before 1 July 2023. However, there are a number of important timing issues that must be adhered to.
  • Upcoming, year-end trust distributions: In good news for taxpayers who operate their business via trusts, the ATO has softened its position in this area following a recent decision by the Full Federal Court. What does this mean for upcoming trust distributions for 2022/23?


May Newsletter 23