Getting a better tax deal
The answer is that with some planning and knowing your position, you can get a better outcome for your tax situation. Being proactive, seeking out the right advice can make a big difference to your tax.
Larger companies tend to spend more on advice to not only identify current opportunities but to understand the tax impact when acquiring new businesses, selling assets, structuring or restructuring.
Understand what is available to you
Concessions do exist for small business and other entities if you know where to look. Often business just doesn't have the time or feel the need to invest to explore anything beyond the compliance basics. Working with the right advisory team, however, can make the world of difference.
Get you structures right
A lot of small businesses fall into the trap of looking at their structure once they've achieved a certain level of growth or decide it's time to make significant changes – like bringing in investors or selling the business, for example. By the time your business is established, the cost of changing the structure may be prohibitive. If you plan right from the beginning with flexibility and tax efficiency, yes the upfront dollars may be more but you will enjoy the tax benefits and accommodate change better as you grow.
Ensure that income and profits flow effectively
This follows on from getting your structure right. Once you have the right structure in place, you can optimise tax efficiency for how income flows to you, providing you plan it in advance.
Can individuals get a better tax deal?
Individuals have fewer choices when it comes to minimising tax but there are still opportunities depending on your circumstances.
Salary packaging, structure your investments
Salary and wage earners will have limited flexibility over direction of their income. Salary packaging can provide some tax benefits. Beyond that however it will be more a matter of how you structure your other investments to optimise your tax outcome.
Consider your business
Business owners and the self-employed have greater flexibility over how they receive their income and you should take advantage of this. Smart tax planning causes income to fall in the right places and maximises the use of lower marginal tax rates.
Act early to get the best position
All of this requires some focus and attention early in the process. Don't wait until your tax liability is 'hurting' you. Take advice early and have a tax plan to ensure that your tax outcomes are as efficient as possible. Contact us on 02 9957 4033 for more information.
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Disclaimer
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
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