Getting Ready for the year End - June 2026!
Effective year-end tax planning starts with reviewing your business and personal financial position before 30 June.
Outlined below are a number of key tax planning opportunities, concessions and strategic considerations that may assist in improving overall tax outcomes and ensuring you are well prepared for the 2026 financial year.
Deferral of Income
If cashflow and business reality allows, consider sending sales invoices in the new financial year. Invoices issued after 30 June would generally be accounted for as sales in the new financial year.
Income Received in Advance
If your business has received any deposits on work that has not yet been started or delivered, please ensure that such transactions are recorded as Deposits Received rather than income.
Income received in advance can generally be deferred until the services are provided.
Bad Debts
Review your trade debtors list prior to 30 June and write off any debtors which are unlikely be recovered. This ensures that you are not paying tax on the income that you are unlikely to recover..
Timing of Expenses
If you are waiting on any bills from suppliers, request all bills prior to 30 June so you can claim the expenses in the financial year.
For business owners, expenses are deductible when there is a presently existing liability to pay the expense.
Prepaid Expenditure
Are there any expenses that you can prepay prior to 30 June such as rent, insurance or interest?
Prepaid expenditure incurred by a small business entity is generally immediately deductible if the eligible service period for the expenditure is 12 months or less.
For this purpose, an entity would generally be considered a small business entity if the aggregated turnover is less than $50 million
Trading Stock
Prepare for a stock take on 30 June. Should there be any stock that are obsolete, record and write them off.
Capital Gains Tax (CGT)
Capital gains tax is calculated based on the profit that you made on sale of CGT assets.
If your portfolio of investments has assets that has declined in value since you have purchased, you could consider selling those investments prior to 30 June so you can offset against your capital gains.
If you would like to keep those investments, you can sell then buy back.
Please note that for CGT purposes the purchase or selling date is the date of entry into the contract, not the settlement date.
Superannuation Contribution – Timing of payment
Superannuation contribution is deductible when the contributions are received by the superannuation fund by 30 June.
Rather than paying the June 2026 quarter superannuation contribution in July, you can bring the deduction in 2026 financial year by paying all superannuation contribution for the quarter ended 30 June 2026 before 30 June 2026.
If you process the superannuation contribution via accounting program such as Xero, Intuit, Reckon, MYOB, and Quickbooks, please note that most of the providers require superannuation contribution to be processed by mid June.
Superannuation Contribution – Maximising deduction
For 2025-26 financial year, Individual taxpayer can make deductible concessional contributions (inclusive of employer contributions already made on their behalf) of up to $30,000.
Superannuation Contribution – Carry forward unused Concessional Contributions
If your total superannuation balance was less than $500,000 as at 30 June 2026 and you have not fully utilised your concessional contribution caps since the 2019 financial year, you may be eligible to make additional concessional superannuation contributions in the 2026 financial year under the carry-forward concessional contribution rules.
These rules allow individuals to contribute more than the standard concessional contribution cap without incurring excess contribution tax by utilising unused concessional cap amounts carried forward from previous financial years.
An unused concessional cap amount arises where the concessional contributions made in a financial year were less than the applicable concessional contribution cap for that year. Unused amounts can generally be carried forward for up to five financial years.
Instant Asset Write Off
Eligible small businesses with aggregated turnover of less than $10 million may be able to immediately deduct the full cost of eligible assets costing less than $20,000, provided the assets are first used or installed ready for use prior to 30 June 2026.
The $20,000 threshold applies on a per asset basis, meaning multiple assets may qualify for an immediate deduction.
Assets costing $20,000 or more that do not qualify for the instant asset write-off can generally continue to be allocated to the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% in subsequent income years.
As announced in the 2026–27 Federal Budget, the $20,000 instant asset write-off is proposed to become a permanent measure.
Company – Income Tax Rate
Base rate entity companies (companies with aggregated turnover of less than $50 million and with no more than 80% of their assessable income being passive income for the 2025/2026 financial year) are generally taxed at 25%.
Companies that do not meet the base rate entity requirements will be taxed at 30% of their taxable income.
A company may lose access to the lower 25% tax rate where:
· Aggregated turnover exceeds $50 million; or
· More than 80% of the company’s assessable income is considered passive income.
Passive income generally includes items such as interest income, dividends, rent, royalties, net capital gains and certain trust or partnership distributions. This is particularly relevant for companies holding investments or deriving mainly investment income rather than operating an active business.
Company Loans – Division 7A
Any payments, loans or debts forgiven from private companies to shareholders and their associates could be deemed to be an unfranked dividend.
If you have drawn money from the company rather than as wages or dividends, it would be ideal to repay the money back into the company prior to 30 June.
If such loans can not be fully paid, the loans need to be documented (loan agreements) and minimum repayment and interest need to be calculated and processed.
Corporate Beneficiaries with retained earnings
For taxpayers that have corporate beneficiaries with retained earnings from prior years, consider establishing a new corporate beneficiary to receive distributions of active business income.
This ensures that the corporate beneficiary can continue to frank dividends declared from its retained earnings at 30% rather than 25%.
Restructuring Inefficient Business Structures
We often see that the initial structure that was set up when the business was first established is often no longer effective due to changes in business circumstances or personal circumstances.
There are various tax rollovers and tax concessions that can be used to restructure inefficient business structures without triggering any Capital Gains Tax Implications.
It is never too late to consider the change and implement the new structure as required.
Trust Distributions
Trustees of discretionary trusts need to determine how the income of the trust will be distributed to beneficiaries before 30 June by way of trustee resolution.
We will further provide guidance to our trust clients about the trust distributions before 30 June.
