YOUR EOFY GAME PLAN
Big Changes
RECENT CHANGES TO TAX LAWS AND FAMILY TRUST LAWS
There are certain things we need to assist you with this year which require a specific order
To make it easier for you, we have combined all the key actions we are strongly recommending for you into this one “2025 Year End Game Plan” package with details outlined below, touch base with us so we can tailor a price for you so you can budget for this important work over the next few months.
We’ve also outlined below the important reasons why we believe this work for you is absolutely necessary and why you will be better off with our recommendations.
The last 3 years have seen some of the biggest changes to tax laws in decades, and also laws affecting Family Trusts.
They include:
- Tax Rulings (relating to S100A of the Income Tax Assessment Act) from the Australian Taxation Office (ATO) that may dramatically restrict how you can distribute profits from a Family Trust out to your family.
- A Court unwinding a Trustee’s Family Trust Distribution when 2 children complained they didn’t get enough money.
- New guidance from the ATO that affects “Professionals” and restricts the way they spread their income across their family group.
- A renewed focus by the ATO on “Personal Services Income” (PSI) which again may restrict the way you spread your income across your family group.
On top of this, we have now had the Federal Budget in March 2025 and a Federal Election scheduled for 3rd May 2025 where we expect significant tax and superannuation changes and the usual pre-30 June tax planning opportunities to save tax.
TAX PLANNING GUIDE - MINIMISE YOUR PERSONAL TAX
TAX PLANNING GUIDE - MINIMISE YOUR BUSINESS TAX
REDUCING YOUR TAX + PLANNING FOR YOUR TAX PAYMENTS
Here is the order of the key tax planning services we recommend for you over the coming months:
In May 2025 we’ll consider strategies to reduce your tax after the Federal Budget.
In May/June 2025, we can provide you with a Tax Planning Report that will give you specific actions to reduce your tax, including the best way to spread business profits across family members to provide for their needs.
Based on our Tax Planning Report, we can then prepare your 2025 Trust Distribution Resolution for any Discretionary Trusts or Family Trusts that you have. You need to sign these before 30 June 2025 or the ATO may tax your Trust at the highest rate of 47% on any trust profits.
In July 2025 we can prepare a TaxFlow Projection Plan for you. This important report will summarise your next 18 months of tax payments for all individuals and entities in your group – tabled in a cashflow format with totals. This makes it so much easier for you to plan for your tax payments and discuss with us your options for reducing any PAYG instalments the ATO may automatically assess for you.
DISCRETIONARY (FAMILY) TRUST DISTRIBUTIONS
Here is the order of our key services you will need over the coming months:
In March/April 2025, we would like to review your Trust Deed to let you know if you need to consider varying your Trust Deed to remove certain beneficiaries and therefore remove the risk of them forcing the Trustee to pay Trust profits to them.
In June 2025, and based on our Tax Planning Report to you, we will prepare a 2025 Trust Distribution Resolution for any Discretionary Trusts or Family Trusts that you have. You need to sign these before 30 June 2025 or the ATO may tax your Trust at the highest rate of 47% on any trust profits.
As part of our Trust Distribution Resolution document pack that we send to you, we will also provide you with a Payment Instructions which each Trust beneficiary can sign in the first week of July 2025. This document is needed to prove to the ATO that your Trust’s payments to beneficiaries are not part of what S100A of the tax legislation, calls a “reimbursement agreement”, resulting in tax of 47% being assessed on these Trust distributions.
FBT – REDUCE ATO AUDIT PERIOD + FINALISING YOUR 2025 STP INFORMATION
Here is the order of the key Fringe Benefits Tax (FBT) services we recommend for you over the coming months:
In April 2025 you will need to complete our brief FBT Questionnaire and send it back to us so that we can work out what fringe benefits you may have provided to employees or Directors, and how much FBT may be payable.
In April/May 2025 we strongly recommend that we prepare your 2025 FBT Return (including employee declarations) and lodge a 2025 FBT Return for you, even if it has NIL FBT payable. This restricts the ATO to a 3-year FBT audit period – otherwise the ATO can go back an unlimited number of years to audit your business for FBT.
Prior to 14 July 2025, you will be able to use the “reportable benefit” summary information included in our 2025 FBT Report to include for each employee in your Single Touch Payroll (STP) year-end finalisation declaration. This information is required by the ATO so that it can be included in your employee’s year end Income Statements.
VALUE TO YOU (Benefits)
Family Trust Distributions
Our advice will ensure that:
- Your Trust Deed doesn’t expose you to beneficiaries forcing the Trustee to pay them profits from your Trust.
- Your 2025 Trust Distribution Resolution will be signed before 30 June 2025 to avoid your Trust being taxed at 47% of its profits.
- You will have taken specific steps to make it very difficult for the ATO to apply its new interpretation of S100A to your Trust and impose tax at 47% on certain Trust distributions.
2025 Tax Planning Report
Our advice will help you to:
- Reduce your tax payable.
- Work out the best way to distribute business profits to your family to provide for their needs.
- Have the information needed to prepare your Trust Distribution Resolutions.
- Understand what your next 18 month’s tax payments are and when they are due.
Lodgement of 2025 Fringe Benefits Tax Return
If we prepare and lodge your 2024/5 FBT Return, then the length of time the ATO can audit you for FBT purposes is limited to just 3 years. By limiting this potential ATO audit period to just 3 years, the risk to your business of having to pay large amount of FBT and penalties in the future is vastly reduced.
PLAN OF WORK AND PRICE
We have created a package price below for your business group.
Date | Action | Benefit to you |
April 2025 | Trust Deed Review | Understand if your Trust Deed needs to be varied before 30 June 2025 to exclude specific beneficiaries who could try to take over your Trust |
April 2025 | 2025 Fringe Benefits Tax (FBT) Return preparation + lodgement | FBT ATO audit period restricted to 3 years. STP Reportable Benefits for employees |
May + June 2025 | 2025 Tax Planning review + Federal budget update | Reduce your 2025 tax. Understand your key pre-30 June 2025 year end business actions |
June 2025 | 2025 Trust Distribution Resolution and Beneficiary Payment Instructions preparation | Ensure your Trust is not taxed at 47% on its profits |
July 2025 | 18-month TaxFlow Projection | Know when your tax is payable so you can plan for it |
Total Tax-Deductible Price – Contact our office to receive your quote | ||
NEXT STEPS
We will then phone or email you about this recommendation.