Accounting Heart

If you operate through a discretionary trust, there is a significant tax change on the horizon that is worth keeping an eye on.

The Government is proposing a 30% minimum tax on discretionary trust income from 1 July 2028, with some exclusions. It has also proposed three years of rollover relief from 1 July 2027 for businesses and individuals who decide to restructure.

There is still time before these changes are due to take effect, and the detail is not yet finalised, so this is not a reason to make changes now.

It is, however, a good reason to understand how your trust is currently being used and whether the proposed rules could affect the tax outcomes you are relying on.

If you would like to understand how the proposed changes could affect your trust or whether your current structure may need to be reviewed, please get in touch.

A business can keep growing even when the model underneath it stops making sense.

Wages, rent, insurance, software and supplier costs have all changed, yet pricing, services and the way work is delivered may still look much the same as they did years ago.

If you were starting the business today, would you build it the same way? Would you offer the same services, work with the same clients, price the same way or structure the team as you do now?

Sometimes only small adjustments are needed. Other times, the numbers show that parts of the business are being carried simply because they have always been there.

Business advisory is about testing those assumptions and making sure the business you have today still makes sense for where you want to take it.

What do you want your wealth to do beyond supporting you and your family?

For some people, part of the answer is philanthropy. That might mean supporting a cause that matters deeply, contributing to something local, or creating a legacy that reflects the values they want to leave behind.

There are different ways to structure that giving, and the timing can matter too. The right approach can depend on your tax position, estate planning and what you want the money to achieve over time.

In our latest article, Sonia looks at how philanthropy can fit into a broader wealth strategy, including charitable giving, private ancillary funds and testamentary giving.

Philanthropy and Leaving a Legacy | Accounting Heart — Accounting Heart For many high-net-worth Australians, the question shifts from how to grow wealth to what it's actually for. Here's how philanthropy and legacy fit into a considered financial plan.

If you’re thinking about expanding your business into Australia, Sonia’s recent blog covers four areas worth understanding before you get too far down the track, including ASIC requirements, ATO obligations, structure choice and financial reporting.

Accounting Heart works with international businesses establishing and operating in Australia, helping them navigate the local accounting, tax and compliance requirements that come with doing business here.

Read the full article here:

Four Things Foreign Companies Need to Understand About Operating in Australia - Accounting Heart — Accounting Heart Foreign companies operating in Australia face compliance obligations that can arise earlier than expected. Know what to watch for & how to get set up right.

Putting assets into a discretionary trust doesn’t automatically mean they are protected if something goes wrong.

What happens in a family law dispute or bankruptcy can depend on much more than what the trust deed says. Who controls the trust, how it has been managed and how money has moved between the trust and other related entities can all become important.

There are also changes happening around how trusts are taxed and scrutinised, including the proposed 30% minimum tax from 1 July 2028. While that proposal is not yet law, it adds another reason to review whether an older trust structure is still working as intended.

If your trust was originally set up partly for asset protection, it is worth checking that the way it is being used still supports that purpose.

A trust can be a useful structure, but it needs to work properly in practice, not just on paper.

If your prices have stayed the same while wages, super, insurance, software, rent and supplier costs have all increased, your margin has already changed, even if your revenue hasn't.

Pricing can easily fall behind the real cost of delivering the work, particularly when increases happen gradually rather than all at once.

A pricing review isn't simply about putting fees up. It's about checking whether the business is still being paid properly for the time, resources, complexity and risk involved.

When did you last check whether your pricing still reflects what it actually costs to do the work?

Many parents want to help their children buy a home or get through a difficult financial period, but how that support is provided can matter just as much as the amount.

A large gift may seem straightforward at the time, particularly when everyone is on good terms. Years later, however, questions can arise. Was the money a gift, an advance on an inheritance, or something that should be taken into account when the estate is eventually divided?

In some circumstances, a documented loan may be more appropriate, particularly where asset protection, a relationship breakdown or fairness between family members needs to be considered.

Helping family doesn't need to become complicated or overly formal. But for significant amounts, it is worth making sure everyone understands the arrangement and that it fits with your broader estate plan.

Planning to pay employee bonuses? Make sure you budget for the full cost, not just the bonus itself.

A $5,000 performance bonus will generally also attract superannuation, bringing the payroll cost to $5,600 at the current 12% rate. With Payday Super, that super also needs to be factored into the same pay cycle rather than being dealt with at the end of the quarter.

Before you lock in bonus amounts, work out what they will actually cost the business and make sure the cash flow is there to cover them.

A discretionary trust may have suited your family or business when it was established, but that does not mean it will always be the right structure.

Beneficiaries change, income levels change, businesses retain more profit and investment strategies evolve. Tax rules change too.

If your trust hasn’t been reviewed for several years, it may be worth asking whether it is still doing what you originally set it up to do, or whether you are simply continuing with it because it’s there.

If you’re not sure, we can help you review it in the context of where you are now and where you’re heading.

Planning to reward your team with a bonus?

Before confirming the amount, make sure you understand the full cost and how the payment needs to be processed. Most performance-based bonuses attract super; the correct PAYG withholding method depends on what the bonus relates to, and Payday Super means the contribution must be funded as part of that pay cycle.

Our latest article explains the tax, super and payroll details to check before your next bonus run.

Employee Bonuses: Complete Tax, Superannuation & Payroll Guide | Accounting Heart — Accounting Heart Paying staff bonuses? Get the rules on superannuation, tax withholding and payroll timing right so that you can reward your team without the compliance headaches.