Top EOFY Strategies for Tax Savings and Financial Planning

Key EOFY Strategies for Tax Savings and Financial Planning

Optimise your finances with these EOFY tax and financial planning tips

As the financial year draws to a close, it's the perfect time to review your financial affairs and set the stage for a successful new financial year. By taking care of essential tasks and implementing strategic planning, you can position yourself for a smooth transition and a strong start for the year to come.

Topping up super

One important item for the To Do list is to top up your super with either concessional (pre-tax) or non-concessional (post-tax) contributions. For example, you could make a voluntary concessional contribution up to the limit allowed and then claim a tax deduction on your personal assessable income for it. Consider making additional contributions to your own super account or your spouse's account, to take advantage of tax concessions.

If you have unused concessional cap amounts from the previous five years and a super balance less than $500,000 on June 30 the previous year, you may be eligible to make a catch-up (or carry-forward) contribution greater than the annual limit.

Maximising contributions not only helps you build your retirement savings but can also provide valuable tax benefits. But it’s critical to be mindful of your caps and to ensure that you make any super contributions before the end of the financial year to meet the deadline.

Reviewing investments

Reviewing your investment portfolio is a valuable task at any time but particularly now.

For example, you could take a look for any capital gains or losses that could be used strategically to manage your tax liability.

Also, it is worth considering how your portfolio performed over the past 12 months against your goal of capital growth, income, or balance.

You may decide to readjust your goals or your investments to help steer performance in the right direction for the next 12 months.

Of course, if you’re planning any changes, it’s important to check in with us to ensure you're making informed decisions about your investments.

Paying expenses early

Another useful strategy at tax time can be to bring forward any deductible expenses or interest payments before 30 June to reduce your taxable income.

That could include incurring expenses on an investment property, prepaying interest on investment loans, making charitable donations, or claiming eligible work-related expenses.

Make sure you keep detailed records and receipts to support your deductions.

The ATO’s myDeductions app is a great place to start for free record keeping and to assist you to be ready for tax time.

Setting up salary sacrifice

As you look ahead to the new financial year, consider whether a salary sacrifice arrangement might be right for you.

Salary sacrifice allows you to divert a portion of your pre-tax salary directly into your superannuation, which effectively reduces your taxable income and boosts your retirement savings.

You will need to think carefully about your living expenses to work out the amount you can afford to contribute to your super, and ensure you do not exceed your concessional (before-tax) contributions cap of $27,500, which will increase to $30,000 from July 1 2024 to avoid paying any extra tax.

Your employer or payroll department can help you set up a salary sacrifice arrangement.

Checking your budget

This is a good time to revisit your financial goals and how you’re tracking, and then put together a strong budget for the new financial year that will help get you further along the track.

Take the time to review your income and expenses and identify any areas where you can cut back spending or improve your income.

This exercise not only helps you understand your financial habits but also allows you to reallocate funds towards your goals, such as paying down debt, building an emergency fund, or increasing your investment contributions.

Consult with professionals

Don’t forget to check in with your trusted advisers - financial advisers, accountants, or tax professionals - to make sure you are making the most of any opportunities for financial growth and maximising tax savings.

Taking advantage of our expert advice to review your current financial situation and goals, and checking that you are making the best decisions for you can make a difference. It provides peace of mind, ensures that you are complying with any obligations and, importantly, puts you in the best position to achieve your financial goals.

Your financial To Do list

Being a good manager of your own financial life means being organised and keeping your eye on the ball.

Here are some tips to help you finish this financial year on top and prepare to take on the next one:

  • Create a checklist: Write down all the financial tasks that need to be completed before year-end along with practical steps to make sure that nothing falls through the cracks.
  • Set deadlines: Identify when each task needs to be completed so that you stay on track and avoid last-minute stress. Prioritise tasks based on their urgency and importance.
  • Use online tools and apps Check out some of the financial management tools and apps that make it easy to visualise your cashflow, store your records and receipts, and help track your progress.
  • Track progress regularly Keep tabs on your progress, tick off your completed tasks and regularly review your checklist to address any issues or challenges promptly.

By addressing these essential tasks, you'll be well on your way to starting the new financial year in a strong and organised position. Remember, the key is to take the initiative, seek professional advice when needed, and stay disciplined in your financial management. With a solid plan in place, you can confidently navigate the year ahead and work towards achieving your financial objectives.

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


How to Get Your Family Trust Ready for EOFY in Australia

How to Get Your Family Trust Ready for EOFY in Australia

Ensure your family trust is compliant and ready for EOFY with these key steps.

With less than a month to go before the end of the financial year (EOFY) rolls around, some important tasks need to be completed for family trusts.

Discretionary trusts (often called family trusts) are the most common trust used in Australia and are generally created to hold and protect family or business assets.

Trustees of family trusts are able to distribute trust income or capital to any beneficiaries they choose.

That means beneficiaries have no entitlement to receive payments in any one year, so one of the key tasks before EOFY is making the necessary trustee resolutions for the current income year.

To ensure the trust’s discretionary beneficiaries are presently entitled to trust income, effective resolutions must be made by 30 June, or the date noted in the trust deed. This is particularly important if you wish to make beneficiaries specifically entitled to franked dividends and capital gains this year.

Making effective resolutions

Trustee resolutions don’t need to specify a dollar amount for each distribution (unless required by the trust deed), but they must provide a clear way of calculating what each beneficiary will receive.i

Failing to follow the requirements of the trust deed, or failing to appoint income by 30 June may result in beneficiaries – or you as the trustee – being assessed on the relevant share of the trust’s net (taxable) income.

Aside from checking the trust has not vested, as a trustee you also need to ensure the resolutions are unambiguous and preferably in writing.

Trustees also need to check their trust deed (including any amendments), to ensure the intended beneficiaries are permitted to receive trust income or capital and are not excluded from being beneficiaries. Effective resolutions require trustees to have complied with any requirements in the trust deed covering how to validly appoint or distribute trust income to beneficiaries.ii

Putting it in writing

Written records of annual resolutions are essential if you wish to effectively stream capital gains or franked distributions to beneficiaries for tax purposes.iii

If a resolution deals with franked distributions from the trust, trustees are required to put these in writing indicating the beneficiaries specifically entitled to the franked distribution.

When it comes to capital gains, written resolutions are also required and these need to be made by 31 August of the following income year to ensure discretionary beneficiaries are specifically entitled to the capital gain.

However, if some or all of a capital gain forms part of the income of the trust estate, the resolutions need to be made by 30 June, because any capital gain forming part of the trust income cannot be specifically dealt with after a beneficiary has already been made presently entitled to it.

Check family trust elections

It’s also vital to check the elections your family trust currently has in place to avoid incurring family trust distribution tax (FTDT).iv

If a trustee distributes income or capital to an entity other than the individuals specified in the family trust election, FTDT is payable at the top marginal tax rate (plus the Medicare levy) on the distributions.

The ATO encourages trustees to regularly review their trust’s in-force elections. It recommends checking annually whether current elections can or should be revoked, if the specified individuals remain suitable, and the timeframes for varying or revoking elections.

If any new entitled beneficiaries have been added to the trust during the income year, check you are holding their tax file number.

Prepare for new reporting requirements

Trustees also need to ensure they are prepared for the administration changes from 1 July 2024. These changes are part of the Modernisation of Trust Administration Systems (MTAS) project and affect return lodgements for the 2023-24 and later income years.v

The MTAS project was announced in the 2022-23 Federal Budget with the aim of streamlining taxpayer lodgements, improving the accuracy of income tax return information from trusts, and providing better information for ATO compliance activities. The new system is also designed to encourage the 30,000 trusts still lodging paper returns to move to electronic lodgement.

From 1 July 2024, trustees are required to complete four new capital gains tax (CGT) labels in the statement of distribution section of their trust’s return. These labels are designed to help notify beneficiaries of their entitlement to trust income and assist with calculation of CGT amount in their tax returns.

Trustees are also required to prepare a new trust income schedule for all beneficiaries receiving income from the trust. Beneficiaries will need to lodge this trust income schedule with their annual tax return.

If you would like more information about EOFY requirements for your family trust, call our office today.

The ATO is watching

The ATO’s Trust Tax Avoidance Taskforce has released a long list of trust activities that will get its attention.vi

Some of the activities include:

  • Circular trust distributions
  • Differences between distributable and net income
  • Distributions of franked dividends
  • Distributions to complying super funds
  • Distributions to tax-preferred beneficiaries
  • Family trust distributions tax
  • Income re-characterisation arrangements
  • Loss trust moved into group
  • Non-lodgement of trust and beneficiary returns
  • Non-residents’ capital gains
  • Potential reimbursement agreements
  • Unitisation arrangements
  • Value extraction and corpus distributions

It’s worth remembering there can be significant tax implications if you don’t follow the rules and comply with your legal obligations as a trustee.

i Trustee resolutions | Australian Taxation Office (ato.gov.au)
ii Trustee resolutions | Australian Taxation Office (ato.gov.au)
iii Capital gains | Australian Taxation Office (ato.gov.au)
iv Family trusts – concessions | Australian Taxation Office (ato.gov.au)
v Modernising trust administration systems | Australian Taxation Office (ato.gov.au)
vi Trust activities that attract our attention | Australian Taxation Office (ato.gov.au)

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Financial Planning for Australians: Balance Today and Save for Tomorrow

Financial Planning for Australians: Balance Today and Save for Tomorrow

Key strategies to manage your finances effectively, ensuring both a comfortable present and a secure future

Managing your financial situation always involves tension between how you live your life now and preparing for your future – whatever that looks like.

The worry about not getting the balance right and making unnecessary sacrifices now – or not having enough money for the things you want to do in the future is a common and valid concern we hear when we talk to clients. You want to be living your best life now which means not living too frugally or worrying about your future. At the same time, you don’t want the choices you are making now in how you live your life to impact or make impossible the wonderful life you envision for yourself down the track.

Balance whatever your stage of life

We all have financial goals - whether you are saving for your children's education, working towards that once in a lifetime round the world trip, freeing up finances for a gap year, or setting yourself up for a wonderful retirement. It’s important to balance your ‘now’ with your ‘future’ when it comes to spending, saving, and investing to make sure you can achieve those goals. You don’t want to regret your spending – or on the other hand live a frugal life and look back on opportunities you missed while you were squirrelling it away.

The tension between the ‘now’ and your ‘future’ with respect to your finances can be even more heightened when you have retired. It can be a strange adjustment suddenly not having a wage coming in and living off your savings, super and investments. It’s common, and quite understandable, to worry about not having enough to last the distance, particularly given that a 65-year-old today may live well into their 90’s and could spend up to three decades in retirement.i No one wants to outlive their savings.

However, many retirees live unnecessarily frugal lives as evidenced by a 2020 Retirement Income Review which found that most people die with the bulk of their retirement wealth intact.ii Those that live frugally do so often not from necessity but because they don’t have an understanding of their financial needs, including how these will change over time, and how much they can afford to spend.

How the balance changes over time

That balance is hard to hit. It is different for different people, and your approach to saving and spending will change at various stages of your life.

If you are paying off a difficult to maintain level of debt or in the final stages of scraping together a deposit for a home, making sacrifices now in the way you live life your life might feel OK. Equally if you have spent much of your life building wealth, letting loose the reins a little and going on that cruise might be something you are extremely comfortable with.

Certainty now and confidence in the future

Whatever your stage of life, achieving the right balance comes from having an in-depth understanding of your financial situation now, and establishing and maintaining a personalised plan that takes into account all aspects of your financials – your earning capacity, level of debt, assets and very importantly, the life you want to live today and your goals for the future.

The importance of receiving support with financial planning is reinforced in a recent report which indicated advised Australians are significantly more likely to say they feel confident in achieving their financial goals (71 per cent) compared with those who are not receiving support (55 per cent).iii

The same proportion said that they were living well now, stating their finances allow them to “do the things I want and enjoy in life.” And those receiving advice are also balancing the “now” with their future needs. Those accessing financial advice also indicated they were more likely to be financially prepared for retirement and have a higher savings balance.

This confidence that comes from receiving personalised advice also means being more prepared when people leave the workforce (and a wage) behind. Advised Australians are significantly more likely to feel very or reasonably prepared for retirement (76 per cent), than those without advice (45 per cent).iv

The key to achieving a balance between living your best life now and being financially secure in the future is knowledge. If we know that tomorrow is shaping up well for us, we may worry a little less today, feel a little less guilty when we spend today and be less likely to have regrets about spending - or about missing out - further down the track.

i https://www.aihw.gov.au/reports/life-expectancy-deaths/deaths-in-australia/contents/life-expectancy
ii https://treasury.gov.au/sites/default/files/2021-02/p2020-100554-ud00b_key_obs.pdf
iii https://www.netwealth.com.au/web/insights/the-advisable-australian/understanding-australian-advice-clients-better/#download
iv https://www.netwealth.com.au/web/insights/the-advisable-australian/understanding-australian-advice-clients-better

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Top Strategies for Property Investment in Australia

Top Strategies for Property Investment in Australia

A review of top strategies for property investment success in Australia. Get insights on maximising returns and managing your investments.

With property remaining a high-priced asset, it’s more important than ever for investors to ensure their property investments are a financial success.

The latest data demonstrates property’s popularity. One-in-five households (21%) owns a home in addition to their usual residence.i

Maximising taxation benefits is one key element but the ATO recently found 9 out of 10 returns were incorrect, so it’s essential to check your paperwork as we approach the end of the financial year.ii

Get your structure right

As with any investment asset, ensuring the right ownership structure for a property asset is vital because it can make a big difference to your tax position each financial year.

It’s also sensible to check if you are using the right structure to help protect your investment from creditors, provide income in retirement, or cope with the unexpected death of a part-owner.

Managing the loan

Once you establish your investment loan, tax still remains a consideration. Any deductions you claim for your loan expenses must directly relate to earning assessable rental income.iii

In cases where money from the loan is used for both private and income-producing purposes (such as a property partly used for rental and partly as your home), you must split your claims into deductible and non-deductible amounts.

If you use the redraw facility on your home’s mortgage to fund an investment property, you won't be able to claim the interest as a deduction if you subsequently use your family home as a rental. There are also capital gains tax (CGT) implications with this strategy.iv

Costs related to loan establishment fees cannot be claimed as a deduction upfront and must be spread over the term of the loan or a five-year period, whichever is shorter.v

Rental deduction dangers

Although many investors focus on the tax deductions they can claim from a property asset, both rental income and deductions are key areas of ATO interest.

Detailed records are required to substantiate all claims and any rental income from short-term arrangements and insurance payouts must be included in your return.vi

You also need to be careful not to overclaim. Many new investors make the mistake of claiming an immediate deduction for initial repairs after purchasing a property. Existing damage must be claimed over several years as a capital works deduction and is used when working out your capital gain or loss when selling.vii

Deductions such as advertising for tenants, professional property management, council rates, land tax and strata fees, building and landlord insurance, and pest control can only be claimed for time periods directly connected to earning income.

Depreciation or capital works?

Property investors are able to claim a wide range of deductions for expenses associated with maintaining and financing property assets, but care is needed.

Claims for depreciation of assets with a limited effective life (such as freestanding furniture, washing machines and TVs), can be made each year, but deductions for capital works must be spread over 40 years following construction. Capital works include improvements or alterations such as adding a driveway or altering the building.viii

Improvements such as renovating a bathroom, are a building cost and must be claimed at 2.5 per cent annually over 40 years from completion.ix

Check your CGT

When it comes time to sell your investment, an important consideration is capital gains tax (CGT). The key to making your investment tax-effective is to ensure you have identified all legitimate expenses contributing to the property’s cost base so you can correctly calculate the capital gain or loss.

The property’s cost base includes the price paid plus your buying and selling costs (such as stamp duty, legal fees and the agent’s commission). You are not permitted to include amounts already claimed as a deduction, including depreciation and capital works.

Any capital gain must be included in your tax return for the income year the property is sold, while capital losses can be carried forward and used in future years.

To ensure you are making the most of your investment assets, call our office today.

i Housing Occupancy and Costs, 2019-20 financial year | Australian Bureau of Statistics (abs.gov.au)
ii https://www.ato.gov.au/Media-centre/Speeches/Commissioner/Commissioner-s-address-to-the-Tax-Institute-s-Tax-Summit-2022/
iii, iv https://www.ato.gov.au/api/public/content/530c1d629e07404aa4405dbe664b8011?v=0ced7a8c
v https://www.ato.gov.au/individuals-and-families/investments-and-assets/residential-rental-properties/top-10-tips-to-help-rental-property-owners
vi https://www.ato.gov.au/Media-centre/Media-releases/Get-your-rental-right-this-tax-time/
vii, ix https://www.ato.gov.au/Individuals/Investments-and-assets/Residential-rental-properties/Top-10-tips-to-help-rental-property-owners/
viii https://www.ato.gov.au/tax-and-super-professionals/for-tax-professionals/prepare-and-lodge/tax-time/tax-time-toolkits/tax-time-toolkit-for-investors

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Mental Health Tips for Small Business Owners

Mental Health Tips for Small Business Owners

Running a small business can be rewarding yet stressful. Prioritising mental health is essential for long-term success and personal happiness.

Most businesses run on pretty tight margins which mean there’s very little extra capacity. If someone takes leave, is away ill or resigns, guess who generally has to step in? If there is a lack of resources for certain roles or tasks, chances are the business owner will get involved.

It is commonplace for small-business owners to be working long hours, struggling to achieve life work balance and feeling that it all rests on their shoulders.

And it’s not just internal pressures within the business that can cause pressure, small businesses often bear the brunt of a turbulent economy. Throw in a series of interest rate rises, increasing inflation and economic uncertainty, and you have good reasons why a number of small business owners might be feeling pressure.

Small business owners and mental health

Given that business performance is so closely linked to an individual’s financial security, personal identity, and sense of self-worth, it’s no surprise that small business owners are particularly vulnerable.

A recent survey confirmed how common it is for small business owners to experience issues with their mental health. In fact, more than half (56 per cent) of small-business operators say running their own business has led to feelings of anxiety or depression.i

Given how common it is to experience these issues as a small business owner, it’s a sad fact that many don’t prioritise their own happiness and health. While 61% acknowledge there is more they can do to improve their wellbeing, one in three (30%) find it difficult to talk about it - and get support.ii

With that kind of gap between acknowledging the importance of self-care and actually making it happen, small business owners need a hand to be at their best. There are a number of ways you can get your wellbeing back on track - and get support to do so.

Prioritising your wellbeing

Running a successful business means checking in regularly and managing the health of the business – looking at factors like revenue, sales, costs etc. Adding in some checks for your health and wellbeing can help you make your wellbeing a KPI.

Think about what good mental and physical health means to you and how you are tracking as far as the general things we all need to do to maintain optimal health. How much sleep are you getting, what are your eating habits like, do you have any time for exercise, have you any unhealthy behaviours or habits you’d like to address?

Prioritise what matters most to you

When you are time poor, something has to give - and often it’s your wellbeing. Place a priority on the things that matter most to you. Try to be ruthless and cut out unnecessary tasks or those that can be delegated or outsourced.

Scheduling ‘me’ time the same way you schedule time for the business can help make self-care happen. Block out time for important activities including breaks away from your desk.

Try to maintain some separation between work and your personal life and ensure you have breaks and tactics to “unplug” mentally and physically from the 24/7 demands of running a business.

Seek support

Support can involve industry groups, networking with peers to discuss issues you have in common or seeking assistance from trusted advisers.
There are also a lot of organisations geared up to provide support. State Governments provide different support programs you can access. The Federal Government also offers NewAccess, a free and confidential, guided mental health coaching program delivered by Beyond Blue to help small business owners.iii

Making your own health and well-being a priority can seem like an impossible notion when you are under the pump but making some tweaks to support your own health can help, not hinder, productivity and business success.

i https://insidesmallbusiness.com.au/management/planning-management/over-half-of-small-business-owners-experience-mental-health-issues
ii https://www.myob.com/au/press-releases/myob-research-finds-mental-health-both-immediate-concern-and-difficult
iii https://business.gov.au/risk-management/mental-health/mental-health-and-wellbeing-support-for-business

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Market movements and review video - June 2024

Market movements and review video - June 2024

Stay up to date with what's happened in markets and the Australian economy over the past month.

The run of stronger-than-expected domestic inflation figures continued in May.

The higher-than-expected inflation figures saw Australian shares tumble after reaching a welcome high mid-month.

The ASX200 finished the month on a positive note, slightly higher for the month of May.

Click the video below to view our update.

Please get in touch if you’d like assistance with your personal financial situation.

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


June 2024 Tax Update: Essential Changes for Individuals and SMEs

June 2024 Tax Update: Essential Changes for Individuals and SMEs

New tax cuts and increased ATO oversight. Understand the implications for personal finances and small business.

Every taxpayer can look forward to a tax cut from 1 July thanks to the centrepiece of the Federal Budget delivered in May.

On average, taxpayers will save around $36 a week under the new rules, which were legislated in February.i

The lowest tax rate in 2024-25 reduces from 19 per cent to 16 per cent, and the 32.5 per cent marginal tax rate reduces to 30 per cent for those earning between $45,001 and $135,000.

The current 37 per cent marginal tax rate will be retained for people earning between $135,001 and $190,000, while the existing 45 per cent rate now applies to income earners with taxable incomes exceeding $190,000.

The Budget also included a commitment to reform current tax laws and give the ATO discretion to stop chasing on-hold historical tax debts of individuals and small businesses.

Boost for tax compliance

Other Budget tax measures include a $2.5 billion crackdown on the shadow economy, as well as other fraud and tax avoidance through upgrades to the ATO’s IT systems to enable real-time identification and blocking of suspicious activities.ii

A new compliance taskforce will also be formed to focus on recovering lost revenue and stopping fraudulent refunds.

Instant asset write-off retained

Small businesses will be pleased to know that the deadline for the popular $20,000 instant asset write-off has been extended to 30 June 2025.iii

Under the instant asset write-off rule, small businesses with an annual turnover of less than $10 million are permitted to immediately deduct eligible assets of less than $20,000, rather than depreciate them.

Key focus areas

The ATO has announced it will be taking a close look at three common errors taxpayers are making in returns lodged this financial year.

These include incorrectly claiming work-related expenses, inflating deduction claims for rental properties and failing to include all income when lodging a return.

Work-from-home expenses will need comprehensive substantiation and rental landlords will need to carefully check their repairs and maintenance deductions.

Meanwhile, existing CGT exemptions for foreign residents buying and selling assets will be tightened.

Unpaid GST and income debts

The ATO has signalled it intends to increase its focus to ensure both individuals and businesses pay their tax and super obligations on time.

For example, there will be a crackdown on businesses failing to pass on $50 billion in undisputed debts for GST and PAYG from employee wages.

Around 65 per cent of this debt is owed by small businesses and the ATO has warned it is returning to its normal, pre-pandemic debt collection practices.iv

Changes for trust tax returns

Small business owners who are trustees or trust beneficiaries need to remember new income tax reporting changes commence on 1 July 2024.

Trustees will be required to provide additional information about capital gains tax on the trust’s tax return statement of distribution to provide beneficiaries with additional information when completing their trust income reporting obligations.

Trust income from managed funds will also be reported with the additional details.

SG payment reminder

With the new Super Guarantee (SG) payday rules due to start on 1 July 2026, the ATO is reminding employers they need to ensure timely payment of their quarterly SG obligations.

Payments for the fourth quarter (1 April to 30 June 2024) are due by 28 July at the latest, with more frequent payments being encouraged.

Check for unlawful tax schemes

The ATO has warned businesses again about the potential risks of becoming involved in unlawful tax schemes, including structured arrangements incorrectly classifying revenue as capital, exploiting concessional tax rates and obscuring the source of funds or party relationships.

Warning signs for these schemes include zero-risk guarantees, being asked to maintain secrecy and fees or commissions based on the tax saved.

We’d be happy to provide further information or clarification about any of the new tax measures or to provide advice if they affect you.

i https://budget.gov.au/content/factsheets/download/factsheet-col.pdf
ii https://budget.gov.au/content/bp2/download/bp2_02_receipt_payment.pdf
iii https://budget.gov.au/content/factsheets/download/factsheet-sml-bus.pdf
iv https://www.publicaccountants.org.au/news-advocacy/media-releases/2024-25-australian-federal-budget-chalmers-fails-to-charm-small-business-owners

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Market movements and review video - May 2024

Market movements and review video - May 2024

Stay up to date with what's happened in markets and the Australian economy over the past month.

As eyes turn to the 2024-25 Federal Budget, stronger-than-expected domestic inflation was recorded for April.

The markets have been subdued due to geopolitical instability and uncertainty around cash rates both in Australia and the US.

The S&P/ASX 200 was down by about 2.5% for April.

Click the video below to view our update.

Please get in touch if you’d like assistance with your personal financial situation.

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Loud Budgeting: Is It for You?

Loud Budgeting: Is It for You?

Think of loud budgeting as having a frank chat about your finances with friends. It’s about sharing financial goals openly, getting everyone on board and excited about your financial journey.

It's a trend that may have started as a joke but is being embraced by those who want to share their financial goals and priorities and in doing so, also improve their chances of achieving them.

It was comedian and writer Lukas Battle who bought the term “loud budgeting” to the world in a TikTok post, presenting it as an alternative to “quiet luxury” as loud budgeting represents a move away from spending to impress or conform.

As is the way with trends, the idea resonated with people, was picked up and run with by a growing group of budgeters. The spirit of the trend is about saying a loud “no” to what doesn’t align with your values. But there’s more to it than that, and there is also a right way to go about loud budgeting that will enable you to keep your finances on target – and your friendships intact.

The benefits of loud budgeting

But before we look at how to get it right, let’s explore why loud budgeting can be such a powerful tool to put you in control of your financial journey.

The fundamental reason it works is because talking transparently about your finances and sharing your reasoning behind how you want to spend your money gives you power and lets you decline invites in a way that is less likely to offend others.

Being open about your challenges can create a sense of community and inclusion. By sharing and acknowledging that it is normal to have limited spending capacity and that it can be a juggle to manage our short-term spending with our long-term savings goals, helps everyone understand each other’s pressures.

Once things are out in the open you are also more accountable. When you have shared your financial hopes and dreams with others, you are more likely to do what is required to stay on track and get support from those who care about you.

Making it loud - and successful!

Think of your goals
Before you start sharing your financial goals with others you must be clear on what they are. Think about what is important to you and what you are working towards. Don’t just have figures in your head - do a proper budget of what you have coming in, what you need to save to meet your targets and what you have left over to spend, so you can make educated decisions.

What matters to you
When you have decisions to make about how to spend your money it can help to think about what is important to you and make intentional choices. That ensures you are not living unnecessarily frugally, but being selective about what you choose to spend your money on, taking into consideration what matters most to you.

Eye on the prize
It’s important to keep your eye on the prize (or prizes) whatever form they may take. Looking to the longer term, this can be smaller goals, like saving up for a special occasion or bigger ones, such as a home deposit. It could also be prioritising payments such as mortgages, student loans and other kinds of debt. Check in from time to time to track your spending and savings against your goals.

Careful communication
Being careful in your phrasing will help make sure feelings aren't hurt when you decline an invitation. Part of loud budgeting is not saying ‘no’ outright – it's about explaining what’s going on for you and offering an alternative that works for you. For example, if you’re invited out for a dinner that you know will blow the budget, you could say “I’m trying to get enough together for a deposit to buy a place so I’m on a tight budget at the moment, can we catch up for a BYO barbeque at my place instead?

Making financial choices that are in line with how you want to live your life and prioritising long-term goals over temporary indulgences is a great way to set yourself up for a fantastic future. So why not speak up and try making your budgeting loud?

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.


Unlock Savings: Guide to Refinancing Your Home Loan

Unlock Savings: Guide to Refinancing Your Home Loan

Refinancing your home loan has the potential to save you thousands, reduce your monthly repayments and free up your finances to achieve your goals.

However, mastering the art of refinancing requires strategic planning, an understanding of the process and taking numerous considerations into account. Whether you plan on external or internal refinancing, here’s what to keep in mind.

Understand the different types of refinancing

While many people think of refinancing as switching lenders, you can also choose a better deal but stay with your original lender. Refinancing through your original lender but opting for a different deal is referred to as an internal refinance; external refinance is where you find a different lender.

In 2023, it was reported that Australia had the largest boom in mortgage refinances in history over the past three years.i And according to Finder’s Housing Market Report 2023, while in 2019 just over half of refinancers were external refinancers, by mid-2023, this had jumped to 72%.ii

Know the market and interest rate movements

As the stats show, in recent times more mortgage holders than ever, are swapping lenders in order to chase a better deal. Often this is the main goal – to refinance to get a lower interest rate.

Given the fluctuations in the market and the rise and fall of interest rates, it’s smart to keep informed as to what’s happening. It’s also a good idea to touch base with a financial expert to get their take on whether now is a good time to refinance.

Assess your financial health

It’s then time to look at your financial situation, so you have a clear understanding of your credit score, current financial position and equity, income, and debt-to-income ratio.

It may have been some time ago that you last did this and it’s likely that some things have shifted, especially given the higher cost of living at the moment.

Understand your loan

Whatever your reasons for wanting to refinance are, you need to understand what your current commitment is and what changes you want to make.

Read through your current loan’s terms and conditions, as it may have been a while since you’ve checked them. You can chat to your current lender to see if there are any benefits you haven’t been utilising or costs you are unaware of.

Understand refinancing costs

A follow-up from knowing your loan is ensuring you have a clear understanding of refinancing costs. While the lure of a better deal can be hard to resist, you may find that it may cost you more than you had thought.

Calculate your break-even point to determining if refinancing is beneficial – this includes taking any valuation fees and payout costs (such as exit fees) into consideration. If you are on a fixed rate home loan, you may need to pay a break free if you refinance.

Consider the impact on your credit score and LVR

Another thing to be aware of is how refinancing can impact your credit score. Aspects that come along with refinancing, such as ending a loan and needing another credit check, can cause your credit score to dip. And if there is the possibility that you skip out on a mortgage payment (should the refinancing process take longer than expected, for example), this will further damage your credit score.

Loan to Value Ratio (LVR) is the difference between the amount you’re borrowing to the value of the property. If your LVR is over 80%, you need to pay Lender’s Mortgage Insurance (LMI). When refinancing, it’s likely that your LVR has shifted due to your mortgage repayments, so your LVR tends to be lower as a result. However, if your property has fallen in value and your LVR has risen, then you may need to pay LMI when refinancing.

We can assist with refinancing to ensure it’s not only beneficial for you, but that it also frees up your finances. Get in touch today so we can discuss your options.

i https://www.macrobusiness.com.au/2024/03/mortgage-refinancing-boom-turns-bust/
ii https://www.finder.com.au/home-loans/housing-market-report

This article is intended as an information source only and to provide general information only. The comments, examples, words and extracts from legislation and other sources in this publication do not constitute legal advice, financial or tax advice and should not be relied upon as such. All readers should seek advice from a professional adviser regarding the application of any of the comments in this article to their particular situation.