Business Structuring & Restructuring
As previously communicated, the Federal Government introduced a regulation that will need to be adhered to by anyone that is a director of an Australian company. This applies to ALL companies, whether they are trading companies, trustee companies (i.e. Companies that are trustees of a Self-Managed Super Fund or a Family Trust), private companies and public companies.
The ATO has now released Draft Taxation Ruling TR 2022/D1 Income Tax: Section 100A Reimbursement Agreements. If you operate within a trust structure, it’s vital you know about this ruling. While it’s complex information, we will try to break it down for you as much as possible. Read on…
As a primary producer, you can elect to pay income tax at a tax rate based on your average income over the five previous years. This tax concession is called ‘income averaging’ or your ‘five-year average’. The purpose of income averaging is to even-out the income fluctuations experienced in primary production to ensure you don’t pay more tax over time than those taxpayers who are on similar, but consistent, incomes.
If you haven’t heard of Primary production averaging (or your ‘five-year average’) before, you’re not alone. It’s a specialised area of agribusiness taxation. If your Accountant doesn’t specialise in primary production accounting, they may not know how to use your five-year average to your tax advantage, ensuring your maximum cashflow is kept in your business.