M AITLAND PARTNERS NEWS December 2009
| Maitland Partners, 14 Elgin St, Maitland, NSW 2320 www.maitlandpartners.com.au enquiries@mpartners.com.au PH: (02) 49338050 |
Inside This Issue:
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ATO Sets Sights on Trusts
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Wealthy families, business owners and investors seem to be the subject of the ATO’s next crackdown. According to a confidential consultation paper, the ATO wishes to change the way the law is applied to over 460,000 discretionary trusts, involving corporate beneficiaries. This would result in these trusts being liable for millions of dollars in extra tax. Previous audits by the ATO have aroused concerns that trusts were being exploited unfairly to avoid paying tax. They’ve noted that a growing number of very large levels of funds are being accumulated within trusts. They wish to explore the practice of diverting trust funds for personal use but do acknowledge that the issue is wider than this. They will be looking at how companies’ distribution entitlements should be treated when they remain unpaid by the trust. The ATO aims to tax some trust distributions to a company as a loan. This move by the ATO would expose a tax-planning structure, which is common-place amongst these groups, to penalty rates of tax – a serious issue considering the amount of people exposed and the huge amount of dollars involved. Its not the first time the ATO have visited this subject. Even though this move by the ATO is currently being “looked into” by the inspector-general of taxation, they’ve made it known that their evolving view on the matter is that “an unpaid present entitlement” to a corporate beneficiary is a loan and they aim to tax it as dividends under integrity rules.” If this is the case the funds would ultimately be taxed twice – once at 30% at the company level and then again as a deemed dividend at a rate of up to 46.5%. Julian Disney, the chair for Community Tax Forum acknowledges that there are some legitimate reasons for using trusts but says also that changes are necessary as trusts are being abused to cut taxes through income-splitting and shifting. If you have concerns relating to a present or intended trust structure, please contact us to discuss your situation. |
| Yes it is past 30 June, but we need to be considering our tax planning opportunities for the 2009/2010 year.
The big push was to access the investment allowance before 30 June 2009 to maximise tax savings. The investment allowance is still available to all businesses, as follows:
Small businesses with turnover less than $2 million can claim a tax deduction of 50% of the cost of eligible assets acquired (or ordered or constructed) before 31 December 2009 provided they are installed by 31 December 2010. This deduction is in addition to depreciation. The result is a 150% deduction over the life of the asset, which for companies represents a 15% discount on the cost of the asset. Small businesses need to invest a minimum of $1,000 per asset to qualify for the investment allowance. Maximise Superannuation Contributions The maximum deductible superannuation contribution for people aged under 50 years is now $25,000 (reduced from $50,000). For people aged over 50 years the maximum amount is $50,000 (reduced from $100,000) for the 2010, 2011 and 2012 years. After 30 June 2012 the maximum deductible amount for all people will be $25,000 (or applicable indexed amount). In addition, there are changes to the capped amount for other superannuation contributions and you should seek professional advice in this area. Saving for retirement has become a lot more difficult and strategic. Most people will need to invest in superannuation at a younger age if they want to have a sufficient income stream in retirement. This needs to be balanced against the cashflow impact on the business. |
Doing Business in a Recession, Or Not
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It does not matter whether we are officially in a recession or not. The reality is that business is tougher and finance is not as readily available. The keys to succeed in an economic downturn are: 1. Plan a written strategy with a focus on growth
2. Plan and monitor financial performance
4. Achieve more business efficiency
5. Maintain tight financial controls
6. Ensure you have an adequate resource base
Maitland Partners specialises in providing taxation and business advice to small to medium enterprises. We can help develop or critique your business strategy, as well as prepare the 3-way budgets. We can do a financial health check, sensitivity analysis and “what if” analysis. On an ongoing basis we can assist you with implementation of the business strategy, as well as monitoring of financial performance. Please contact David Perrott on 4933 8050 for a complimentary, confidential and obligation free consultation |
Maitland Partners 10 Year Anniversary Celebration
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After weeks of organisation and planning, Thursday 5 November finally arrived. Susan and I headed over to Maitland Park Bowling Club a little early to decorate, which turned out to be challenging given the wind was a bit stronger than the sticky tape and blu tac. It was 12.30pm before we knew it and guests were arriving. I had the job of handing out the tickets for lucky door prize along with alcoholic beverage tickets, which gave me the chance to meet and greet everyone. After some time for drinking and chatting we headed inside for our buffet barbeque lunch which was delicious, and I’m sure was enjoyed by all. After lunch David made his speech which began in true David style… a joke that got a laugh out of everyone. He followed with recognition and thanks to not only his wife Alison and business partner Julie-Ann, but to Susan and all of his staff along with the people who helped Maitland Partners become what it is today. After more drinks and chatting all headed outside to start playing bowls. Everyone organized themselves into teams of four. At no point in my life did I think I would play bowls, but a team was short a player so I filled in. I, along with many others, had never played before let alone know or understand the rules of the game. I was lucky enough to have one of Maitland Partners client’s, Tewie Barnard, on the opposing team. He taught me more than I ever thought I would learn about the game of bowls, and surprisingly I enjoyed playing. Then it was time for the winners and runners up to be announced. Coming in first was John Lechner, Troy Morley, Janine and Brad Harris receiving a first place certificate and an extra large coffee mug advertising their big win. In second was the team consisting of Tewie Barnard, Alison Perrott, Sue Costin and Peter Wood receiving a second place certificate and a coffee mug advertising their achievement. Everyone headed inside for more drinks, along with new arrivals that came to celebrate with us. Goodbyes and more congratulations were said with the day drawing to an end. Luckily, the rain held off long enough for us to celebrate this day properly. I’m glad to be part of Maitland Partners and very much enjoyed celebrating 10 yrs. Here’s to the next decade. Skye
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