The financial year end checklist 2013 contains tax-effective strategies that may be effective for you – depending on your personal financial and taxation circumstances. Employees, professionals, contractors or self-employed business operators (carrying on business under a structure) may benefit from them, but you should confirm any proposed course of action with your accountant, tax agent or financial planner before acting on them.

to-do-checklist

As the financial year draws to a close some of the options that we have proposed in recent communications to our clients for optimising the financial benefits of ‘tax concessions’ have already passed in a practical sense.

For instance, there isn’t sufficient time left to: arrange a properly sourced, suitable income protection insurance policy (and prepay the tax-deductible premium before 30 June); arrange and prepay fixed interest for the coming twelve months; and getting a transition to retirement strategy established with an allocated pension and consequent superannuation contribution will also be beyond practical achievement for most financial planning firms.

However – the following matters can be worked on to ensure that you optimise your benefit if they are in your financial mix for the 2012/13 financial year:

–          Capital Gains: offset strategies are available. Ensure that all records relevant to the acquisition, holding and disposal of the asset(s) are available: this will not only ensure you minimise the cost of having the calculation made by your accountant/ tax agent; it will also ensure you get the full advantage available under the taxation laws. (Capital Losses ‘hidden’ in non-superannuation investment portfolios may well be worth realising to facilitate utilisation and repositioning the investment portfolio.)

–          Superannuation Contributions: can you contribute more without breaching the ‘cap’? For the contribution to be tax deductible in this financial year it has to be in the fund trustee’s bank account by close of business on 30 June (this year that will be 28 June!) EMPLOYERS SHOULD NOTE that this also applies to the final month/ quarter contribution of superannuation guarantee amounts withheld.

–          Government Super Co-Contribution: if you’re eligible you need to make a Non Concessional Contribution before 30 June to benefit. (see our Library article on this matter from June 2012)

–          SMSF Investment Strategy: is your documentation up-to-date ready for the year-end audit? You have some time beyond 30 June to have this prepared, but it must be in place before the Fund’s financial reports to 30 June are audited.

–          Spouse Super: (if eligible to do so) make a deductible contribution to your spouse’s Super account; or split your own contribution to their account

–          Small Business Capital Gains: make sure any rollovers are lodged within required timeframe – these times are critical and so you should check with your accountant/ tax agent to ensure they aren’t missed.

–          Acquire consumables that will be used to operate a small business, repair equipment and/ or rental property, operate vehicles or equipment: items such as paint, tyres, tools, electrical ‘fittings’ etc that are expected to be used in a reasonably short period of time can be worth considering (in a discussion with your accountant/ tax agent).

Other key matters to have in place at this time of year include: trust distribution minutes; Tax File Number (TFN) for all eligible beneficiaries should be appropriately recorded and stored by trustees; and start to collate those pieces of information that you will need to prepare your income tax return (or to hand to your tax agent to prepare it for you).

To round-off the checklist, consider acting early for the 2103/14 financial year and attending to the following as soon as possible in that new financial year ahead:-

–          Salary packaging (including salary sacrificing additional funds to superannuation for you and/ or your spouse): can include vehicle costs (acquisition or operating), mortgage and/ or home ‘utility’ payments; education expenses etc  – depending on the arrangements available through your employer;

–          Review of your personal life insurance needs and ensuring that your protection is adequate (and not excessive): including Term Life insurance, TPD, Trauma and Income Protection insurances;

–          Small Business proprietors should also review key-man and business succession arrangements (including whether the understood arrangements should actually be documented, reviewed as to how practical they are – and whether or not they can be readily funded); and consider Business Expense insurance in their wealth protection strategy; and

–          Estate Planning arrangements should be reviewed with your financial planner (not overlooking the appropriateness of who has been nominated as your beneficiary in your superannuation account/s and life insurance policies!).

Speak to your Accountant or Contact Us if you need any assistance to ensure your wealth management strategy for this financial year end is best for your circumstances.