2019 Year End Tax Planning – Australia

As the 2019 financial year draws to a close on 30 June 2019, the below outlines some key tax planning strategies which could be implemented to increase tax efficiency.

  1. Prepaying Tax-Deductible Expenses

Per the general prepayment rules, if you incur certain allowable deductible expenses in the year which relate to an eligible service period which does not exceed 12 months and ends in the next income year. Examples of allowable prepaid expenditure include:

  • Income protection insurance
  • Investment property expenses
  • Professional subscriptions
  • Business Travel Expenses relating to the following year

If you therefore have upcoming expenses in July, you may wish to pay in June instead to bring forward the relief by one year.

  1. Delaying Capital Gains Tax (CGT) Disposals*

Shortly looking to sell a taxable CGT asset? By delaying the exchange date until after 30 June 2018, any CGT payable will be delayed for another year, giving a cash flow benefit.

For assets already sold during the year, consider whether there are any assets current sat at a loss which you may be looking to sell in the coming months, as by fast forwarding the sale to before 1 July 2019, the loss can be set against the current gains during the year. Where there are no capital gains during the year in which a capital loss is made, the loss is carried forward at set against future gains.

*As long as this does not reduce any reliefs you can claim against the gain – if unsure contact us for advice.

  1. Income Spreading

If your income level each year changes, look to delay/fast forward any income in to the year with the lower income*, to make use of the lower tax bands. This should also be taken in to consideration when deciding whether to prepay any expenses or delay/fast forward any CGT sale.

*Where this is possible.

  1. Superannuation Contributions

In order for a personal Superannuation contribution to be deductible in the 2019 year, the fund must have physically received the contribution by 30 June 2019, along with the notice of intention to claim document. If the funds are received 1 July 2019, the deduction will only be available in the following tax year and will use up part of your non-concessional cap for that year.

  1. Spouse Superannuation Contributions

Is your spouse’s taxable income below $40,000 in 2018? If so, providing certain conditions are met, you can make contributions to your spouse’s Superannuation fund and receive a tax offset of 18% of the contribution, up to a maximum contribution of $3,000. This results in a tax offset of up to $540.