Tax Planning is a pro-active way of arranging your financial affairs prior to the end of the financial year in order to keep your tax liability at a minimum, and retain your business profits.
At Sinclair Wilson, we encourage all our business clients to engage in Tax Planning initiatives and realise planning opportunities as an important tool to minimise tax.
As a general rule, Tax Planning options fall into three main categories; assessable income reduction, deductions and business structuring.
Tax Planning by assessable income reduction involves the planning of incoming cash flows to minimise assessable income. This can include deferring the collection of revenue from invoices until the next financial year and timing the sale of assets which have capital gains tax implications.
Tax Planning by control of deductions involves making the most of the tax deductions on offer. A few common options to consider are prepaying expenses ahead of the new financial year and using your excess profit to make pre-tax superannuation contributions. For primary producers, there are additional options available including farm management deposits and the use of primary production averaging.
Tax Planning with business structures also plays an important role to ensure that the most effective tax rate for the client is achieved, by way of profit distributions and differing entity tax rates.
Considered and timely business decisions are a crucial element in effective business planning. At Sinclair Wilson, we can assist with your business decisions and tailor the many Tax Planning options to your specific circumstances to ensure your tax exposure is efficiently managed.