The start of a new financial year brings along various changes that will impact almost everyone, from families and workers to business owners and retirees. As your trusted  Accountant, Attune Advisory is here to provide you with a comprehensive breakdown of the significant changes taking effect from July 1, 2023.
‍
Here's our snapshot:

‍

1. National Minimum Wage Increase: Effective from July 1, Australia's minimum wage will be $23.23 per hour, reflecting a 5.75% increase in award wages and an 8.6% increase in the minimum wage. This translates to $882.80 per week based on a 38-hour work week.
2. Farewell to LMITO (Low and Middle-Income Tax Offset): The temporary tax cut known as LMITO, or "lamington,"will no longer be available for the 2022-23 income year. LMITO provided tax relief to individuals earning up to $126,000, with the maximum benefit of $1500 going to those earning between $48,000 and $90,000 in 2021-22.
3. Superannuation Increase: The superannuation guarantee, which is the portion of wages employers must contribute to their employees' retirement savings, will increase from 10.5% to11% from July 1. This increase will continue by 0.5% each year on July 1 until it reaches 12% in 2025. Additionally, the temporary reduction on minimum super drawdown rates for retirees will end. This measure, introduced during theCOVID-19 pandemic, allowed retirees to withdraw only 50% of age-based minimums if they chose to do so.
4. Revised Method for Calculating Working from Home Expenses: The fixed rate method for calculating deductions for working from home expenses has been revised. From July 1, the fixed rate method will be67 cents per work hour, up from the previous rate of 52 cents per hour. The actual cost method, requiring detailed record-keeping of private and work-related expenses, remains an alternative option.
5. Expanded Eligibility for First Home Owner Schemes: The federal government's Home Guarantee Scheme, including theFirst Home Guarantee, Regional First Home Guarantee, and Family Home Guarantee, will have expanded eligibility criteria. Starting July 1, friends, siblings, and other family members can jointly apply for the First Home Guarantee andRegional First Home Guarantee. These schemes will also be available to non-first home buyers who have not owned a property in the past 10 years.
6. Enhanced Child Care Subsidy: Families earning less than $530,000 will be eligible for an increased childcare subsidy from July 10. Higher subsidy rates will apply to families with one child in care earning less than $530,000 in household income, with even higher rates for second and additional children in care. The subsidy increase will also extend to outside school hours care.
7. Extended Paid Parental Leave: New parents can now claim up to 20 weeks of paid parental leave, and partnered couples have the option to split the leave between them. For single parents at the time of their claim, the full 20 weeks of paid parental leave is accessible. The current arrangement offers parents 18 weeks of paid parental leave and two weeks of secondary carer leave, both paid at the minimum wage.
8. Age Pension Eligibility Age Increased: As of July 1, the age at which Australians can become eligible for the age pension will increase to 67 years, up from the current age of 66 years and six months.However, you can submit your claim in the 13 weeks leading up to your AgePension age.
9. TSMIT (Temporary Skilled Migration Income Threshold) Increase: From July 1, the TSMIT will rise from $53,900 to$70,000. The TSMIT represents the minimum salary that must be paid to a sponsored employee to obtain a temporary skilled visa in Australia.

‍

As the new financial year unfolds, it's essential to stay informed about these changes to effectively plan and manage your financial affairs moving forward. At Attune Advisory, we are here to support and guide you through these updates with tailored advice specifically for your circumstances. If you have any questions or would like help with tax planning, superannuation, or other financial matters, reach out to the team on 1300 866113 or send us an email.We are dedicated to helping you navigate these changes and achieve your financial goals.

‍

‍Understanding the intricacies of taxation can be a daunting task, especially when it comes to the Small Business Capital Gains Tax(CGT) Concessions. These concessions can have a significant impact on the tax outcome of your business or the sale of a CGT business asset.

Thankfully, there’s not too many variables to wade through, as Australia offers four types of CGT concessions. Having said that, determining which one applies to your specific situation can be a complex process that mean it’s worthwhile enlisting the help of the Attune team so you can ensure you take the right path.

To help you start the process, let's take a closer look at the four CGT concessions available:

1. 15-year Exemption: If you're 55 years or older and either retiring or permanently incapacitated, the 15-year exemption may provide total relief from CGT when you sell a business asset. To qualify for this exemption, you must have owned the asset for at least 15 years, with at least 7.5 of those years being classified as an active asset. This concession allows you to disregard the entire capital gain from the sale.
2. 50% Active Asset Reduction: The 50%active asset reduction concession offers a 50% reduction of the capital gain made on the sale of an active asset. An active asset refers to an asset that is used or held ready for use while running your business. This concession is often combined with other concessions to achieve greater CGT relief.
3. ‍Retirement Exemption: The retirement exemption provides relief up to a lifetime limit of $500,000. If you're under55, the exempted amount must be paid into a complying superannuation fund or aRetirement Savings Account (RSA). However, if you're 55 years or older, there is no requirement to contribute to a complying superannuation fund or RSA.
4. Rollover Concession: The rollover concession allows you to defer your CGT liability when you sell an active asset and buy a replacement active asset within two years before or one year after the original CGT event. The CGT liability is deferred until the replacement asset is sold.

‍Two of the most frequently asked questions about SmallBusiness CGT Concessions:

1. Can I use more than one CGT concession? Yes, certain concessions can be applied in conjunction with others, depending on your specific circumstances.
2. Can these concessions apply to a pre-CGT asset? No, the CGT concessions only apply to CGT events, and pre-CGT assets are excluded from CGT events.

Remember, the complex world of Small Business Capital Gains Tax doesn't have to be overwhelming. With the right assistance, you can navigate it successfully, protecting your financial interests while ensuring full compliance with the Australian Tax Office requirements. Your focus should be on growing your business, and ours is to support you in doing so.

So what’s my next move?

Understanding these CGT concessions – even at the top level– and their applicability is crucial for effective tax planning strategies, so we suggest at least re-reading the above to get you across them to start with.But remember, at Attune Advisory, we're here to guide you through this process from start to finish – our expert team can provide you with personalised advice tailored to your unique situation, ensuring you maximise the benefits from theCGT concessions available to you.

You can book an appointment to discuss your current situation and how we can help you reach your goals via email or call us at1300 866 113.

As a small or medium-sized business owner, you have a lot on your plate. Among the many complexities you face, understanding how dividends from your business are taxed can certainly rank as one worth dealing with!

With that in mind, we thought we’d give you some guidance below to help make the taxation of dividends a little more manageable. 

First, let's start by understanding what dividends are.

Put simply, dividends are essentially a portion of a company's profits distributed to its shareholders. They serve as a way to return capital to the shareholders and reward their investment in the company. It is of course important to note here that in the eyes of the Australian TaxOffice, dividends are considered income to the shareholder and are, therefore, subject to income tax.

The tax treatment of dividends can vary based on several factors, including the size of the dividend, your other sources of income, and whether the dividends are fully franked or unfranked.

Who’s Frank?

Fully franked dividends come with franking credits, also known as imputation credits.

These credits allow Australian companies to pass on the tax paid at the company level to their shareholders. When you receive fully franked dividends, the company has already paid tax on them. As a shareholder, you might be entitled to a tax offset, which helps avoid double taxation. If the franking credit exceeds your personal tax payable, you may even be eligible fora refund. However, if the franking credit is less than your personal tax payable, you will be liable for the shortfall.

On the other hand, unfranked dividends have not had any tax paid at the company level. As a result, these dividends are fully taxable to you as the shareholder.

Now, let's address some frequently asked questions regarding the taxation of dividends:

1. Do I have to declare dividends on my tax return? Yes, all dividends received, whether fully franked, partially franked, or unfranked, should be reported on your tax return. This includes dividends that were reinvested.
2. How does a dividend tax credit work? InAustralia, a franking credit or imputation credit is a credit for the tax a company has already paid on its profits. When a company distributes its profits as dividends, shareholders receive a franking credit that can be offset against their tax liability.

‍Important next steps …

Dividends can be a valuable income stream for you or your business, but understanding how they are taxed is crucial for effective tax planning. If you need help understanding how dividends from your business are taxed or have a complex tax situation with regards to dividends, our team atAttune Advisory will provide a comprehensive analysis of your specific situation, answer your questions, and guide you towards the best strategies for your financial success.

Make your financial situation your priority by booking an appointment via email or by giving us a call us on 1300 866 113.

‍

Are you a business owner feeling the weight of high marginal tax rates despite running a profitable enterprise? If so, it's time to consider incorporating your business and we can help ... Incorporation can provide significant tax benefits by allowing you to leave profits within the company, which are then taxed at a more moderate corporate tax rate of 25%.

The 25% corporate tax rate applies to businesses with an annual aggregated turnover below $50 million, as long as their passive income(such as rents, interests, dividends, etc.) does not exceed 80% of their assessable income. By incorporating your business, you can take advantage of this lower tax rate, allowing you to retain more of your hard-earned profits.

However, it's important to understand that incorporating your business involves navigating certain rules and regulations. The PersonalServices Income (PSI) rules, in particular, may impact how income is attributed to you as the business owner. If your company provides personal services and does not meet the required results, 80%, unrelated clients, business premises, and/or employment tests, the income of the company could be attributed to you personally.

To ensure a smooth and successful incorporation process, it's crucial to work with experienced professionals like the team at AttuneAdvisory. Our experts have in-depth knowledge of the tax landscape and can guide you through the complexities of incorporation, ensuring that you maximise the tax benefits available to your business.

By incorporating your business, you not only unlock the potential for lower tax rates but also gain access to a range of other advantages. These include increased credibility and professionalism, limited liability protection, potential access to more favourable financing options, and enhanced opportunities for business growth and expansion.

At Attune Advisory, we pride ourselves on providing strategic, tailored solutions that meet the unique needs of each business we work with. Our team will carefully analyse your situation, taking into account factors such as your business structure, industry, and growth plans. We'll then develop a comprehensive incorporation strategy that aligns with your goals, ensuring you reap the maximum tax benefits while remaining compliant with relevant regulations.

As you contemplate the advantages of incorporating your business, we recommend consulting the Australian Taxation Office (ATO) website for additional information. The ATO website provides valuable resources on individual income tax rates, including details on the 25% corporate tax rate and the conditions that must be met to qualify for this rate.
‍

Don't let high marginal tax rates hinder the growth and profitability of your business. Take the first step towards tax optimisation and financial success by incorporating your business with Attune Advisory. Our team of seasoned professionals is here to guide you through the process, ensuring you unlock the tax benefits you deserve. Call the team today on 1300 866 113 or send us an email to schedule a consultation and let us help you navigate the path to amore tax-efficient future for your business.

‍