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30 June is approaching – let’s get serious! No one wants to pay more tax than absolutely necessary but how do you know if you are paying the correct amount? To assist with this question, we share our top year-end tax planning tips to consider.

Superannuation contributions

Concessional contributions can offset Australian income such that you are putting away money for your future and not into the tax man’s hands.

A maximum cap of $27,500 can be paid into an Australian super fund prior to 30 June 2023.  Please note, however, that a contribution cannot result in a tax loss and therefore if you do not have sufficient income to offset the total super contribution made the balance cannot be carried forward to use for future years.

Charitable donations

Donations made into Australian charities with deductible gift recipient status can offset Australian income such that you are making a difference to the community instead of to the Government. Unlike superannuation contributions, if you do not have sufficient income to offset the entire donation, you can carry forward the deduction over the next five years.

Pay all rental property expenses

The timing for a deduction against rental property income is based on the timing of when the expense is paid and not on the date of an invoice or bill. Therefore, if you have the opportunity to pre-pay your property insurance or pay land tax before the due date this can result in lower income or greater losses and as such tax benefits.

Obtain a capital allowance depreciation report

You could get the benefit of a tax deduction for property improvements either you carried out or a previous owner carried out.  If previous year claims have not been made it is also possible to amend previous year tax returns which may lead to a refund or increased tax losses for future use.

Withholding taxes

A reminder that interest earned on an Australian bank account or unfranked dividends earned from Australian shareholding is subject to withholding tax. If the withholding tax has not been automatically withheld from your payments you have the obligation to include this income in your tax return and pay the withholding tax yourself. Please note, superannuation contributions and donations mentioned above cannot reduce your withholding tax obligations.

The timing of property sales

Don’t be fooled by an increase in the property market.  Non-residents pay more tax on property gains than residents so be sure to discuss with us the tax implications before you engage an agent. If you do choose to sell property as a non-resident, delay the contract date until after 30 June to extend the payment of the tax for another year.

Australian trust distribution resolutions

Trustees of all Australian trusts must prepare a distribution resolution or minutes documenting which beneficiaries are to receive the net income and gains of the trust derived for the year. Without this in place, trustees can lose the flexibility in determining which beneficiaries are taxed on the income and gains and instead the trustee can be taxed.

In summary, it is important to plan for the tax year end, as individual circumstances are unique and we work with clients to design a tailored approach. Ilana Kramarov is the Director of Tax for Select Investors Australia, and works closely with Australian expatriates, through their Singapore journey and beyond. If you would like to discuss your personal circumstances and year-end tax planning opportunities, please contact Ilana via email ilana@selectinvestorsaustralia.sg.

This information has been prepared in good faith, is in the nature of general comment only, and neither purports, nor is intended, to be advice on any particular matter.  You should not act or rely upon any matter or information contained in or implied without taking appropriate professional advice which relates specifically to your particular circumstances.  Select Investors (Australia) Pty Ltd expressly disclaim all and any liability to any person (whether a reader or not) who acts or fails to act as a consequence of reliance upon the whole or any part of this information.