As the 2024–25 financial year draws to a close, it’s more important than ever for business owners, trustees, and investors to ensure their tax affairs are in order. This year, several areas have attracted greater attention from the ATO, including family trusts, Division 7A loans, franking credits, and superannuation contributions.
Here’s a summary of what you should know—and what action to take—with trusted guidance from Boa & Co. Chartered Accountants.
1. Family Trusts and the Risk of 47% Tax
The ATO has sharpened its focus on Family Trust Elections (FTEs) and Interposed Entity Elections (IEEs)—and some trustees have been hit with unexpected Family Trust Distribution Tax (FTDT) at a hefty rate of 47%.
This often happens when a distribution is made outside the defined “family group.” Once an election is in place, the rules are strict: there is no discretion to undo errors after the deadline, and the ATO can issue FTDT assessments without any time limit.
Our advice: Review your FTEs and trust distributions carefully. If you’re unsure who qualifies as part of the family group, we can assist to avoid costly mistakes.
2. Franking Credits and the 45-Day Holding Rule
If your family trust distributes franked dividends to a corporate beneficiary, that entity must satisfy the 45-day holding period rule to claim the franking credit.
The ATO’s current (but unpublished) position is that a company must already exist and be a beneficiary before the ex-dividend date. If a company was incorporated after the dividend was declared, it might not qualify—potentially leading to a loss of valuable franking credits.
Our advice: Plan beneficiary structures in advance, especially when using newly created companies. We’ll help you stay compliant and tax-efficient.
3. Division 7A and the Ongoing Bendel Case
A recent Federal Court decision (Bendel) ruled that Unpaid Present Entitlements (UPEs) are not loans for Division 7A purposes. However, the ATO is appealing to the High Court, meaning uncertainty remains.
Until the appeal is resolved, the ATO continues to treat UPEs as Division 7A loans. If they’re not managed correctly, they can be treated as deemed dividends—with serious tax consequences.
Our advice: To stay safe, follow the ATO’s current guidance. Let us review your trust-company structures and help you meet Division 7A obligations, including minimum yearly repayments (MYRs) before 30 June.
4. Instant Asset Write-Off Extended—but Act Fast
The popular $20,000 instant asset write-off has been extended for small businesses (turnover < $10M) until 30 June 2025. This means you can immediately deduct the cost of eligible assets if they’re first used or installed before the deadline.
While the government has announced another extension to 2026, this has not yet become law.
Our advice: Don’t wait. If you’re planning to upgrade tools, vehicles, or equipment, we can advise you on timing and eligibility before EOFY.
5. Super Contributions—Timing Matters
To claim a deduction for superannuation guarantee (SG) contributions, payments must be received by the employee’s super fund by 30 June 2025—not just transferred or sent to a commercial clearing house.
If you use the ATO’s Small Business Super Clearing House (SBSCH), this deadline is extended slightly—but only for SG purposes, not for tax deductions.
Our advice: Make contributions early. For personal contributions, ensure your notice of intent is submitted before lodging your tax return or by 30 June 2026, whichever is earlier.
Need Support Before Year-End? Let Boa & Co. Help You Wrap Up with Confidence
Whether you’re navigating trust tax rules, company structures, Division 7A loans, asset purchases, or super deductions, Boa & Co. Chartered Accountants is here to ensure your 2024–25 EOFY strategy is strong and compliant.
Call us on 1300 952 286, Email [email protected], or Visit www.boanco.com.au
We’re ready to help you minimise risk, maximise savings, and move into the new financial year with peace of mind.