A friend’s accountant suggested that they could reduce interest on non-deductible debt by using company cash to offset their personal
mortgage, then transferring the cash back by 30 June. Is this an acceptable strategy?
This might initially sound like a brilliant strategy but what is really happening is that you are using company funds to derive a personal
benefit. Doing this once might not attract attention, but doing this more than once might trigger a deemed unfranked dividend under Division
7A. Section 109R is designed for scenarios like this.
If this occurs, the repayment you made will be ignored, meaning that a deemed dividend could be triggered in relation to the funds
initially borrowed from the company unless a complying loan agreement is put in place, in which case minimum loan repayments would need
to be made to prevent a deemed dividend from arising.
For example, let's assume you are a shareholder of the company (or an associate of a shareholder) and you borrow money from the company on 1
July 2022. This loan would generally fall within the scope of Division 7A, but a deemed dividend can be avoided if the loan is fully repaid
by the earlier of the due date and actual lodgement date of the company's 2023 tax return.
However, if you repay the loan but it appears that you intend to borrow a similar or larger amount from the company when making the
repayment then the repayment can be ignored. The main exception to this is where the repayment is made in a way that is taxable to the
individual (e.g., dividends or directors’ fees are set-off against the loan balance).
One of the most common situations where section 109R could apply is where funds are taken from the company bank account and placed into a
director's home loan offset account.
Even if the funds are transferred back to the company before the end of the year, there is a significant risk of section 109R applying if the pattern repeats. That is, the money will be treated as a dividend and taxed as assessable income.
Give us a call or email if you'd like help to understand what this means for you and your business.
In this webinar we will go through tax effective strategies that can achieve a net-benefit to your employees without costing you more.
Whilst retention payments are very common in the building and construction industry we continually see them being incorrectly accounted for, or not accounted for, and therefore often overlooked, resulting in advance payment of taxes and/or lost income.
We are heading into a period of opening up the economy after COVID, with the need to repair the budget, an election looming by May 2022, the threat of inflation and a withdrawal of central bank stimulus.
There was increasing discussion about the possibility of interest rate increases in key regions, to counteract gathering inflationary
pressures. This saw bond yields rise, and adversely affected the performance of fixed income markets.
The Victorian Government’s Business Costs Assistance Program Round Four - Construction provides one-off payments to eligible employing and non-employing businesses in the construction sector that operate in the specific local government areas.
In spite of the generally positive mood investors remained concerned by the ongoing spread of the Delta variant of Covid-19, and whether it could derail the recovery in major economies.
How safe is your superannuation? Can a super fund go bankrupt? Is my superannuation Government guaranteed?
The impact of Covid-19 and the associated lockdown has made it more important than ever to ensure, where possible, that you’re still getting paid.
While commercial property is a little more difficult to understand than residential, it offers several significant advantages for investors.
By using a guarantor to get a home loan, you can potentially put down a lower deposit. However, it doesn’t necessarily mean you will be able to borrow more money.
Even if you can’t quite afford your dream home right now, there are still other options to get onto the property ladder a lot sooner than most people think.
With the trade industry currently thriving off the boom in the housing market, tradies find themselves busier than ever. The $1200 Small Business Digital Adaptation Program can help you work out ways to make admin life easier.
If you're looking into investing into property, regardless if it's residential or commercial, there's plenty to weigh up.
Is a financial services compensation payment to your superannuation fund considered as a contribution?
New legislation will help prevent superannuation assets from being hidden during divorce proceedings. From 1 April 2022, the Australian Taxation Office (ATO) will be able to release details of an individual’s superannuation information to a family law court.
Australia’s two largest states and the ACT are in lockdown as the Delta strain of COVID-19 takes its toll while others are standing firm on a policy of eradication. The result is a country at a policy impasse and divided by border restrictions.
In this issue we cover Australia's aging populations and what that means for your retirement planning
ONLINE Webinar Session
7 September // 1:00PM
While the suburb and area are important factors in property selection, many investors fail to identify some of the red flags that might weigh on a property’s potential for growth.
Australian shares started the FY22 year with solid gains. Bond yields fell sharply, resulting in favourable returns from fixed income markets too.
On 24 August 2021 the Commercial Tenancy Relief Scheme Regulations 2021 were updated offering a wider eligibility catchment.
In simple terms, if you have been previously ineligible for rent relief, you may now be in a position to receive financial reprieve.
To have the retirement of your dreams, you must plan ahead. The bonus is, the sooner you start thinking about your retirement life, the better opportunity you have of making those dreams a reality.
If you can’t work because you or someone in your household is impacted by COVID-19, support is available. There are three types of payments accessible to individuals who have lost work because of the pandemic.
UPDATED 6 Sept 2021: The Small Business COVID-19 Hardship Fund program offers grants of $20,000 to eligible small and medium businesses, including employing and non-employing businesses. This program will allow more businesses who have previously not received support, to receive financial relief now.
Helping you lead & manage your business better. A webinar in collaboration with Mornington Peninsula Shire Council as part of their Small Business Workshops.
Set your kids up for financial success by teaching them about money and taking care of your own financial wellbeing.
Your tax refund can seem like winning the lottery. But it's not - it is your own hard-earned cash. So how can you make it work as hard for you as you did earning it?
"I'm totally covered.......through my super fund." If this is you, you might want to think again.
While everyone loves talking about property in Australia, the reality is that few people are experts. Here are some of the most common property investment myths plus some good ideas to consider.
Taking care of your mental health during lockdown periods becomes really essential. Shared by Simon Fraser University Health & Counselling Services: 25 tips to help you and your loved ones navigate this time.
Now that the new financial year is here, it’s time to start looking at all the ways you can make the most of your investment property. If you want to claim your expenses on your rental property, it’s vital that you have good records.
When property markets are hot, vendors often choose to go to auction to try and attract the very best price they can. However, many vendors are open to accepting an offer prior to the start of the auction itself.
Economic indicators have been generally positive recently, although the implementation of various lockdown restrictions nationwide are clouding the outlook.
The Victorian Government has announced new cash grants for businesses impacted by the lockdown declared on 15 July 2021. (Updated 6 Sept)
Most people would assume that if and when they need to claim on their insurance, the insurance payout covers the damage and is not income assessed for tax purposes - but this is not always the case.
If you worked from home during lockdown and spent money on work related items that were not reimbursed by your business, you might be able to claim some of these expenses as a deduction – but not everything you purchase can be claimed.
If you can’t work because you or someone in your household is impacted by COVID-19, support is available.
Tax planning is more than just a financial necessity—it's a strategic advantage for businesses of all sizes. By proactively managing your tax strategy, you can significantly reduce your liabilities, enhance cash flow, and ensure full compliance with ever-evolving tax regulations.
