As we approach the end of the current financial year, we would like to bring your attention to the
following tax planning matters, some of which need to be in place by 30 June 2024.

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Superannuation

Superannuation Concessional Contributions (deductible)

Concessional contributions which include employer contributions, contributions made
under a salary sacrifice arrangement and personal contributions claimed as a tax deduction
is subject to an annual cap of $27,500. The concessional contributions cap will be
increasing to $30,000 per year from 1 July 2024.

From 1 July 2018, if you have a total superannuation balance of less than $500,000 on 30
June of the previous financial year, you may be entitled to contribute more than the
concessional cap of $27,500, by utilising unused amounts from previous years.

The first year that you will be able to carry forward unused amounts is the 2019/2020 year,
and these amounts are only available for a maximum of 5 years. Unused amounts after 5
years will expire. So, for example, unused cap from the 2018–19 year will expire in the
2023-24 year. The oldest available unused cap amounts are used first.

To utilise your unused concessional cap, you are required to meet these conditions:

• You have a total super balance of less than $500,000 at the end of 30 June of the
  previous financial year
• You make concessional contributions in the financial year that exceed your general
  concessional contributions cap
• You have unused concessional contributions cap amounts from up to 5 previous years
  (but not before 2018–19) *

If you meet these conditions, you can make concessional contributions above the general
cap without paying extra tax.

To obtain a tax deduction in the current financial year, please ensure that the decided amount
of superannuation is paid by 30 June 2024. We recommend that payments are made by 20
June 2024 to allow sufficient time for the superannuation funds (particularly industry funds)
to receipt the monies by Friday 28 June 2024 (as 30 June 2024 is Sunday).

If the superannuation contributions are received by your superannuation fund on or after 1
July 2024, the amount receipted by your fund will be included in your cap for the following
year (ie 24/25 year) rather than this financial year (ie 23/24 year).

If you wish to claim a tax deduction for personal concessional contributions in the 2023-24
year, you will need to provide a section 290-170 notice (Notice of intent to claim a
deduction) to the Trustee of your superannuation fund. Please ensure that you receive
written acknowledgement back from the Trustee acknowledging your request.

Eligible contributing members must submit the appropriate ‘notice of intent’ (NOI) form
(also known as a section 290-170 form) to the super fund before the earlier of the
following two dates:

• Lodgement of the contributing member’s income tax return (for the income year of
  contribution), and
• The end of the income year following the ‘contributing’ income year.

Superannuation Non-Concessional Contributions (Non-deductible)

Non-concessional contributions are made from after tax income and not taxed by a
superannuation fund. Non-concessional contributions include personal contributions for
which you do not claim an income tax deduction (eg. undeducted contributions).

The non-concessional contributions cap (NCC) for 23/24 year is $110,000. From 1 July
2024, the non-concessional contributions cap will be $120,000.

Your non-concessional cap is nil for a financial year if, at the end of the previous financial
year, you have a total superannuation balance (TSB) greater than or equal to the general
transfer balance cap ($1.9m for the 23-24 year).

Individuals under 75 years old at any time in a financial year, can make non concessional
contributions of up to 3 times their annual non-concessional contributions cap in that
financial year if their total super balance on 30 June of the previous financial year was less
than $1.68m (please refer to tables below). Individuals over 75 years old can only make
employer contributions or downsizer contributions.

The tables below summarise the bring forward non concessional contribution caps that
apply in the first year of the bring forward period depending on your total superannuation
balance (TSB).

For the 2023-24 year:

TSB on 30 June of previous year	NCC for the first year	Bring forward period
< $1.68m	$330,000	3 years
$1.68m to < $1.79m	$220,000	2 years
$1.79m to < $1.9m	$110,000	No bring forward period – general NCC cap applies
$1.9m or more	nil	N/A

For the 2024-25 year:

TSB on 30 June of previous year	NCC for the first year	Bring forward period
< $1.66m	$360,000	3 years
$1.66m to < $1.78m	$240,000	2 years
$1.78m to < $1.9m	$120,000	No bring forward period – general NCC cap applies
$1.9m or more	nil	N/A

Please note that if you exceed the non-concessional contributions cap, you will have two
options:

• Withdraw the excess amount, plus 85% of the associated earnings of the excess
  contributions, or
• Pay excess contributions tax equal to the top individual tax rate, on the excess
  amount.

Superannuation for Spouse

Taxpayers that make non-concessional contributions for their low-income earning (earning
under $40,000 p.a.) or non-working spouse are eligible for a superannuation spouse
contribution tax offset.

Tax offset amounts for the 2023/24 year are as per the table below:

Spouse assessable income (SAI)	Maximum rebatable contributions (MRC)	Maximum offset
$0 – $37,000	$3,000	$540
$37,001 – $39,999	$3000 – (SAI – $37000)	MRC x 18%
Over $40,000	Nil	Nil

The offset is not available if your spouse exceeds their non-concessional contributions cap
for the 2023/24 year or their total super balance is over the general transfer balance cap of
$1.9 million (for the 2023/24 year).

Tax Planning for Businesses

Company tax rate

A company must be a base rate entity to be eligible for the lower 25% company tax rate. A
company is a base rate entity if both of the following apply:

• The company has a turnover less than the turnover threshold of $50 million for the
  2023-24 year
• 80% or less of the company’s assessable income is base rate entity passive income
  (such as interest, dividends, rent, royalties and net capital gain)
  If your business is a company, your aggregated turnover includes your annual turnover, plus
  the annual turnover of all the entities that are connected or affiliated with your company,
  which may be based in Australia or overseas.
  Tax rate for private companies that are not base rate entities remains at 30%.

Instant Asset Write-Off

Under the current law, the small business instant asset write-off applies to assets less than
$1,000. However, as part of the 2024-25 Budget, the Government announced it will
temporarily set the instant asset write-off threshold for small businesses at (less than)
$20,000 for the 2024 income year and extend that rate to the 2025 income year.

If the measures become law, small businesses, with aggregated turnover of less than
$10 million, will be able to immediately deduct the full cost of eligible assets costing less
than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June
2025.

For a small business entity to access the instant asset write-off threshold, the business must
satisfy the following conditions:

• The entity must carry on a business under general principles in the 2024 income year;
• It must have aggregated annual turnover of less than $10m (based on current or previous
  year figures)
• It must choose to apply the simplified depreciation rules for the 2024 income year;
• The asset must have a cost of less than $20,000; and
• The asset must be first used, or installed ready for use, for a taxable purpose between 1
  July 2023 and 30 June 2024.

From 1 July 2025 onwards, the instant asset write-off threshold will revert back to (less
than) $1,000.

Depreciation limits for cars

The maximum value that can be used for calculating depreciation the business use of a car
first used, or leased in the financial year, for the 2023/24 year is $68,108 (increasing to
$69,674 for the 2024-25 year).

If you purchase a car and the price is more than the car limit, the maximum GST credit you
can claim is 1/11th of the car limit will be $6,191 in the 2023/24 year ($6,334 the 2024-25
year). For cars that are only partially used for business, you are only entitled to claim a
partial GST credit based on how much you use the car for business purposes.

Businesses are required to keep a record of asset acquisitions and disposals during the year
showing the cost price or disposal value and relevant dates.

Business assets (plant & equipment)

Businesses are required to keep a record of asset acquisitions and disposals during the year
showing the cost price or disposal value and relevant dates. We recommend that you
review your business’s asset register to write off any obsolete or destroyed items before 30
June 2024 and advise us if any assets are to be scrapped.

Prepayments

Business prepayments, is expenditure incurred for things to be done (in whole or part) in a
later income year. Prepaid expenses are deductible over the eligible service period rather
than being immediately deductible.

Prepaid expenses may be immediately deductible if:

• It is excluded expenditure
• The 12-month rule applies
• It relates to a pre-review of business taxation (RBT) obligation

Excluded expenditure includes:

• Amounts less than $1,000
• Amounts required to be incurred by a court order or law of the Commonwealth, State
  or Territory
• Payments of salary or wages
• Amounts that are capital, private or domestic in nature

The 12-month rule

Small business entities* can claim an immediate deduction under the 12-month rule for
prepaid expenses if:

• The payment is incurred for an eligible service period not exceeding 12 months
• The eligible service period ends in the next income year.

*small business entities carrying on a business and has an aggregated turnover of less than
$10m.

If applicable, please provide us with a list of all prepayments in excess of $1,000 and include
information such as date and nature of payment, period of service and amount paid.
We recommend that small business entities review their expenses and, subject to cash
availability, consider bringing forward any payments which are currently being paid
monthly such as subscriptions and insurances.

Bad Debts

All non-recoverable trade debtors should be written off by 30 June 2024. We recommend
a review of trade debtors to be conducted to identify any amounts that are considered
uncollectable and written off prior to 30 June 2024.

Where a bad debt is written off and been determined that it is unlikely to be recovered
through any reasonable and commercial attempts before 30 June 2024, you may claim a tax
deduction for it in the 2024 financial year. Entries should be made in the debtor’s ledger,
including a directors’ resolution drawn up or evidence of written approval of the directors.

If your business is registered for GST on an accruals basis, there may be an adjustment
required to the company’s Business Activity Statement (BAS), which can be made in the
June 2024 quarter BAS or at a later point by amending a prior BAS (subject to amendment
time limits and correction error value limits).

Superannuation Guarantee Charge (SGC)

We recommend that you review the payroll records, employee by employee, month by
month, to ensure that the appropriate percentage of ordinary time earnings has been paid as
superannuation contributions to a complying superannuation fund or industry fund.

We also recommend that employer contributions are made the week prior to Friday 28 June
2024 in order to ensure that the contributions are received by the funds by 28 June 2024 (30
June 2024 falls on Sunday).

Superannuation is deductible when paid. Therefore, to claim superannuation as a tax
deduction for the June quarter, the business must ensure that this superannuation is paid
before 30 June 2024.

For the purposes of SGC, the due date for contributions for the 2023/24 year is 28 July 2024.
If a payment is made after the due date, the tax deduction is denied.

The SGC rate for all employees is 11%. From 1 July 2024, the SG rate is set to increase by
0.5% from 11% to 11.5% for all employees. Please note that the applicable SG rate is
based on date of payment, and not when the work was done.

The SG percentage will increase to 12% by 1 July 2025 with increases of 0.5% scheduled
each financial year through to 1 July 2025.

As the $450 threshold for super guarantee was removed from 1 July 2022, super guarantee
applieso all eligible employees over 18 years old regardless of their monthly pay.

Substantiation and Record-Keeping

Ensure that all logbooks, travel diaries and odometer records are completed where
applicable in respect of the 2023/24 year. Please note that log books are required to be kept
for at least 12 weeks in the first year and then every five years.

New log books are required where circumstances have changed and the previous determined
rate (on prior log book) is no longer representative of the business/private usage.

Entertainment

Please ensure your meal entertainment is dissected between:

• non-deductible customer entertainment and
• deductible but subject to FBT, such as employee entertainment and
• deductible but free of FBT, such as employee sustenance while travelling on business
  or in an in-house dining facility.

Loans to shareholders/associates – Div 7A loans

Any loans or advances to shareholders or their associates, that are not fully repaid to the
company by the lodgement time of the company’s income tax return for the relevant year
will need to be documented with a complying loan agreement before the company’s
lodgement due date.

The complying loan agreements require shareholders/associates to make minimum yearly
repayments (of principal and interest) starting from the income year after the loan is made.
Missing the minimum yearly repayment or not meeting the minimum repayments could
result in payment of unfranked dividends to the shareholder/associate.
The benchmark interest rate for 2023/24 year is 8.27%.

Stock on hand

Businesses that own stock should ensure that a stocktake is completed at 30 June 2024.
Stock can be valued at cost, market value or replacement value, whichever is the lower.

For tax purposes, most businesses that trade stock are required to do an annual stocktake at
the end of the financial year. It is important to plan and execute a stocktake in a way which
gives a reliable and accurate stock figure. As part of stocktake, you should identify any old,
obsolete or damaged stock which can be written off or written down.

Year End Single Touch Payroll (STP) finalisation

Employers should have procedures in place to ensure they are able to lodge the STP yearend
finalisation report by 14 July 2024. This will allow their employees to complete their
tax returns.

Please note that where fringe benefits are provided to employees and the taxable value of
benefit provided exceeds $2,000, the grossed up value of the fringe benefit will be recorded
as reportable fringe benefits in the employees payment summary.

Trust distributions

Discretionary trusts are required to prepare and execute distribution minutes prior to 30
June for each financial year. The minutes specify how the income of the trust will be
distributed to beneficiaries for the relevant financial year. Minutes must be prepared in
accordance with the trust deed. For the distribution minutes to be effective, they must be
prepared and executed by 30 June 2024.

Tax matters for individual clients

Capital Gains

If you have capital losses (current year or brought forward) or current year capital gains,
consideration may be given to advancing future gains or losses to offset the position.

Please note that non-residents are not entitled to the CGT discount or main residence
exemption.

We also remind clients that hold crypto assets that switching from one crypto asset to
another is a CGT event. The ATO has advised that they will be utilising crypto assets datamatching
program for the 2024 year.

Working from home deductions

From the 2023-24 year onwards, there are two methods to calculate working from home
deductions:

• fixed rate method
• actual cost method

A) Fixed rate method

Using the fixed rate method, taxpayers can claim a rate of 67 cents per hour they worked at
home in the 23-24 tax year. There is no requirement an employee to have a dedicated home
office area to be able to claim under this method.

The fixed rate covers additional expenses incurred (from working from home) in relation
to:

• Electricity/gas
• Internet usage
• Mobile phone/home phone
• Stationery and computer consumables

However, depreciation for assets used in home office (eg desk, chair, computer) are not
included in the revised rate, and can be claimed separately. You will need to keep records
for any equipment purchased to work from home.

If you intend to use the revised fixed rate method to claim home office deductions in the
2023-24 year, you will need to calculate the actual number of hours worked for the entire
year (from timesheets, rosters, diary or other similar documents).

In limited circumstances, where you have a dedicated home office, you may also be able to
claim occupancy cost (such as rent, rates, mortgage interest).

To be eligible to claim occupancy expenses, you must show that:

• It was necessary for you to work from home because your employer does not provide you with an alternative place to work from
• The area in your home that you use for work is exclusive or almost exclusively used for work purposes and isn’t readily capable of being used for any other purpose.

Please note that they may be CGT implications when you sell your home if you claimed occupancy expenses.

B) Actual Cost method

To be eligible to use the actual cost method, you must meet the following criteria:

• incur additional running expenses as a result of working from home
• keep records/written evidence which shows the amount you spend on expenses or
  depreciating assets used while working from home

Additional running expenses you may incur include:

• Depreciation for assets used such as home office furniture
• Electricity/gas
• Home phone, mobile, internet
• Stationery, computer consumables
• Cleaning costs of your dedicated home office area

You can’t claim running expenses if the area you work from is shared by others while you
are working from home.

To claim your work from home expenses using actual costs, you must keep either a record
showing the number of actual hours you worked from home in the whole year (for example
timesheet or spreadsheet) or a continuous 4 week period that represents your usual pattern
of working at home.

Car expenses

To claim a deduction for car expenses, you must:

• own or lease the car *
• the expenses must be for work-related trips
• you must have spend the money yourself (and were not reimbursed)
• you must keep required records

*You cannot claim car expenses if the car you use is under a salary sacrifice or novated
lease arrangement.

There are two methods to calculate deductions for car expenses:

a) Cents per kilometre method

To calculate your deduction under this method, you multiply your work related kilometres
by the rate per kilometre for that income year (in 2023-24 the rate is 85 cents per km).

You can only claim a maximum of 5,000 work related kilometres per car.

Taxpayers need to keep a record of how they calculated the work related kilometres.

b) Log book method

In order to use this method, you will need to keep a log book that shows your work-related
trips for a continuous 12 week period and also keep receipts and other records of car
expenses you paid during the financial year.

Log books are valid up to 5 income years. However, if your circumstances change (such
as changing jobs or moving to a new house), and the log book is no longer representative
of your work related use, you will need to keep a new log book.

Your log book must:

• cover at least 12 continuous weeks and be broadly representative of your travel
• include the destination and purpose of every journey, the odometer reading at the start
  and end of each journey, and the total kilometres travelled during the period
• include odometer readings for the start and end of the logbook period.

You can keep a log book using the myDeductions tool in the ATO app
(https://www.ato.gov.au/online-services/online-services-for-individuals-and-soletraders/
ato-app/mydeductions?=Redirected_URL) or keep a paper log book.

Under this method, the deduction for car expenses will be calculated by multiplying your
business use percentage (determined from your log book), with your total expenses.

Tax deductible super contributions

If you wish to make tax deductible superannuation contributions to your fund, please note
that payments must be made before 30 June 2024.

We recommend making the payment by 19 June 2024 to allow sufficient time for your
superannuation fund to receipt your contribution by 30 June 2024 so that the contribution
is counted towards your contribution cap for 23-24. If the contribution is received by your
superannuation fund on or after 1 July 2024, the amount will count towards your 24-25
contributions cap. Please refer to page 1 regarding contribution caps for 23-24 year.

You will also need to advise your superannuation fund that you would like to claim a tax
deduction for this contribution by completing a ‘Notice of intent to claim or vary a
deduction for personal super contributions’ form (NAT 71121).

If you wish to discuss any of the above matters, please contact our office.

Should you have any questions, please feel free to contact our office on 0402 27 728 (Carl) and
0412 404 128 (Tina).

Yours faithfully
CARL DUMBRELL & TINA LOH
Partners – CDTL Accountants & Advisors