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5 Tax Strategies continued...
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2. Prepay interest and small asset write-offs ‡ Individuals not in business are able to prepay interest on loans used to purchase income-generating properties or dividend-paying shares. ‡ This gives the investor an opportunity to bring forward a sizeable tax deduction to reduce taxable income. ‡ Useful if one has extra income in the relevant year due to inclusion of a large capital gain. ‡ Individuals can also write off expenditure on VPDOO DVVHW DFTXLVLWLRQV FRVWLQJ OHVV WKDQ outright that relate to income-earning activities.
not entitled to claim a 50 per cent CGT discount when they sell shares, but can transfer WKLV EHQH¿W WR VKDUHKROGHUV 7KH HQWLWOHPHQW appears as a notation on the investor’s dividend distribution statement.
3. Salary packaging
5. Entity holding investment assets
‡ 6RPH HPSOR\HUV QRW IRU SUR¿W VHFWRU UHFHLYH VSHFLDO IULQJH EHQH¿WV WD[ )%7 FRQFHVsions, so it is important to maximise any such opportunities. ‡ 7KHUH DUH EHQH¿WV WKDW DUH H[HPSW IURP )%7 and then there are ones that receive concessional treatment, such as motor cars. Both these W\SHV RI EHQH¿WV VKRXOG EH ORRNHG DW IRU LQFOXVLRQ LQWR VDODU\ VDFUL¿FH DUUDQJHPHQWV ‡ (PSOR\HUV FDQ DOVR EHQH¿W IURP VDODU\ SDFNaging opportunities as labour on-cost (work cover/payroll tax) can be lower under such arrangements.
4. CGT discount/investment in LICs ‡ Hold onto investments for more than 12 months before you sell to take advantage of the capital gains tax (CGT) discount. ‡ Investors often forget their CGT bill will be halved if they wait a little longer than 12 months before they get the temptation to sell. ‡ Ability to claim an extra tax deduction in listed investment companies (LIC). LICs are
Staff news
Office opening hours
This month we say goodbye to director Ian Koch who is retiring. Ian has been a director at Powers since 2000.
8.30am - 5pm Monday to Friday
We’ve also farewelled accountants Carissa Gunston in Biloela and Kelsey Nobbs in Brisbane.
Monto
New staff
Mundubbera
Roslyn Elliott has joined the WHDP DV RXU QHZ 2IÂżFH 0DQager in Brisbane. Christian Capp has joined our 10X team as an Agribusiness Coach. On the 10X front, we also welcome Toowoomba Business Coach, Ross Fulloon, to the team.
Gemma Blair has taken on ‡ 3UREDEO\ RQH RI WKH PRVW VLJQL¿FDQW WD[ SODQ- WKH UROH RI 0DUNHWLQJ 2I¿FHU ning strategies is to look at which entity within while Tanya Summers completes 12 months maternity the family group holds the investment assets. You need to take into account what is the most leave. important driver for your circumstances - asset Rebecca Congram has joined SURWHFWLRQ LQFRPH VSOLWWLQJ ÀH[LELOLW\ VXFFHV- our team on a casual basis in sion and estate planning. It can be as complex Brisbane. as setting up a discretionary trust or as simple as putting assets in the name of a low-income Let’s celebrate spouse. ‡ Discretionary trusts are particularly useful as Our Superannuation Manager they tick most of the boxes when it comes to in- Charles Page has become come splitting, asset protection, access to CGT an accredited Self-Managed Super Fund Professionals’ Asconcessions and succession planning. Advice IURP D VXLWDEO\ TXDOL¿HG DGYLVHU LV UHFRPPHQG- sociation of Australia SMSF Specialist Advisor. ed to help you sort through the maze. Accountant David Butler and Source | Tony Greco, National Institute of wife Lynda welcomed baby Accountants, senior tax adviser Jacob Robert Joseph Butler into the world on April 6.
Brisbane 8.30am - 5pm Monday to Friday 10am - 2pm Monday to Friday or by prearranged appointment
Final thoughts...
Diary Dates
“Always a pleasure to deal with the Powers team. Thank you, Paul, for all your help.�
June
A Cridland “We have a good relationship with our adviser, John Cox, which we wish to continue. Keep up the good work.â€? Con & Helen “We have been with Powers since 1968 and are extremely happy with their service.â€? Mick & Jan Mitchelhill, Tambo “It’s been great having the assistance of Murray Davis. We struggle with ÂżQDQFLDO GLUHFWLRQ DQG XQGHUVWDQGLQJ HYHU\WKLQJ :H DUH RIWHQ XQVXUH RI WKH TXHVWLRQV ZH QHHG WR DVN WR JHW DVVLVWDQFH ZLWK ÂżQDQFLDO GHFLVLRQV and directions, such as how to fund our retirement or fund much needed improvements around the property and home. It is great that Powers is offering more of these types of services.â€? D&K, Taroom
www.powers.net.au email: mail@powers.net.au
elor of Accounting this month.
ZLOO LQFOXGH ÀRRG DQG DQ\ RWKHU IRUP RI natural disaster. In superannuation, the government is still pushing ahead with an allowable deduction RI IRU WKRVH RYHU IURP -XO\ 2012 (subject to a maximum balance in WKH IXQG RI 2WKHUZLVH \RX IDOO back to a maximum allowable deductible contribution of SHU DQQXP
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Our mission is to ensure you achieve your financial and business goals. We value the thoughts of our clients. That is why we believe the final word should belong to the most important person...you.
If you want help with these strategies call Support Accountant Toni Powers Investment & Finance Services Neilsen ZLOO ÂżQLVK KHU %DFKon 07 4995 6655
in the private health insurance rebate for those under 65 and with a family income EHWZHHQ WR For primary producers, the government announced they will be extending early access to Farm Management Deposits for those affected by natural disaster. Currently the early access provisions are limited to drought, but the new provisions
In this issue
Biloela
Good byes
Not many surprises in this year’s Federal Budget There were no earth-shattering announcements in the Budget this year, but still some changes to be aware of. The main changes of concern are the removal of low income offsets for minors receiving income from investments or trusts, changes to the small business Capital Gains concessions for trusts and the proposal to push through a reduction
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BRISBANE
Level 7, 269 Wickham St (PO Box 310) Fortitude Valley QLD 4006 Ph: 07 3251 4444 Fax: 07 3251 4422
Visiting Monto, Mundubbera and other locations by appointment
7-9
CRT Farmfest, Toowoomba
13
Queens Birthday Public Holiday
21
Monthly Activity Statements due for May
July 1
Start of Financial Year 2011-12
12
Property Investment Seminar PIC Group (Settlers Inn, Biloela)
14
PAYG Payment Summaries to Employees
21
Monthly Activity Statements due for June
28
Quarterly Activity Statements due for Quarter 4, 2010-11
28
Payment of employer superannuation due for Quarter 4, 2010-11
August 14
PAYG Withholding Payment Summary to ATO
21
Monthly Activity Statements due for July
The information in this document is of a general nature and is provided for information purposes only. It does not take into account your particular objectives, financial situation or needs and should not be used as a substitute for independent advice from a qualified professional. Liability limited by a scheme approved under Professional Standards Legislation, except where financial services are provided by Authorised Representatives of Professional Investment Services Pty Ltd (PIS) AFSL 234951 ABN 11 074 608 558. *Financial Planning services provided by Authorised Representatives of PIS. #Valuation services provided by NPR Valuers Biloela Pty Ltd ABN 47141679576
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The Tax and Budget special
June 2011
In the LOOP
The Quarterly Newsletter for clients of Powers Financial Group
Director’s Message With Murray Davis It’s been a tough few months for those of our clients affected by ÀRRGV EXW ZH KDYH EHHQ DEOH WR KHOS well over 100 businesses, including primary producers and small businesses, with all levels of government support. We would like to remind everyone that we are still providing free assistance to businesses who wish to REWDLQ WKH ¿UVW ÀRRG DVVLVtance grant. 7KLV JUDQW DQG WKH VXEVHTXHQW grant will remain open until the end of September. We will help non-Powers clients as well, so if you know of anyone who needs a hand please let them know.
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5 Tax Strategies
Tax should never be the driver of investment decisions, but here are some tax strategies to consider as part of your wealth creation planning. 1. Superannuation Superannuation still represents a wonderful tax planning opportunity for most investors. ‡ If you are lucky enough to have your own self-managed superannuation fund (SMSF), which is invested predominantly in listed shares paying fully franked dividends, then the super fund may not even be paying any tax or even better, receiving a tax refund. ‡ The government intends to reduce the concessional contributions for those over WR ZKR KDYH D VXSHU EDODQFH PRUH WKDQ 6R LW LV LPSRUWDQW IRU those over 50 to maximise their conces-
sional super before the new rule kicks in. ‡ Low-income earners are encouraged to make an after-tax contribution to super as they may be eligible for a tax-free co-conWULEXWLRQ EHQH¿W RI XS WR ‡ The only downside for the co-contribution is that the tax-free contribution made on your behalf by the government is locked away until retirement. ‡ Invest one dollar and receive one extra dollar tax free, which has to be the best risk-free investment available. This strategy works well when you have both a high and low-income earner within the family unit. ‡ Opportunity to claim a spouse rebate for super contributions made on behalf of a low-income spouse. The spouse rebate LV ZRUWK XS WR
Look inside for more strategies