2025 EOFY / Tax Planning Checklist

To maximise your business’s cash position, consider the following tax planning opportunities before 30 June:

• Declare Dividends and Trust Distributions by 30 June:
  • Ensure declarations are properly documented in dividend/distribution resolutions.
  • It is highly recommended that resolutions are signed by 30 June.

• Prepay Expenses:
  • If aggregated turnover is less than $50 million, you can claim a 100% deduction for prepaid expenses in the year they are paid, provided they meet the 12-month rule.

• Bring Forward the Purchase of Plant & Equipment:
  • The $20,000 Instant Asset Write-off and General Asset Pool rules remain for the 2024-25 financial year.
  • Businesses with turnover under $10 million can:
    • Claim a full tax deduction for eligible new or second-hand assets under $20,000.
    • Assets must be first used or installed between 1 July 2024 and 30 June 2025 (excludes capital improvements to buildings).
    • A full deduction can also be claimed if the closing balance of the general pool (before depreciation) is $20,000 or less on 30 June 2025.
  • A choice can be made for assets not held in the General Asset Pool regarding immediate deduction.
    
    
• Maximise Superannuation Contributions:
  • Superannuation contributions are only deductible if paid by 30 June.
  • For personal contributions:
    • The fund must receive them by 30 June.
    • A valid notice of intent must be submitted to the fund before the earlier of your tax return lodgement date or the lodgement due date. 
  • The annual concessional contributions cap increases to $30,000 from the 2025 income year.
  • Check whether you are eligible to carry forward unused concessional contributions from prior years.
    
    
• Write Off Bad Debts:
  • If debts are unrecoverable  and all reasonable steps have been taken, write them off before 30 June to claim a deduction.
  • Ensure the related GST adjustments are made.
    
    
• Maximise Your Tax-Deductible Debt:
  • Interest on loans for private purposes is not deductible.
  • Review potential refinancing to increase the proportion of deductible debt.  
  • Consider restructuring Division 7A loans.

• Write Off Obsolete or Slow-moving Stock:
  • Review stock levels and identify obsolete or slow-moving items.
  • If the market value is lower than the cost, you may claim a deduction for the difference.

• Review Investments and Capital Gains:
  • Consider how capital gains tax (CGT) applies if you plan to sell shares, property, or other investment assets.
  • Plan the timing of sales to minimise CGT liabilities.
  • Use unrealised capital losses to offset current-year gains.
  • Only the contract date (not settlement date) determines the timing for CGT purposes.
  • Within a group, consider whether capital losses can be used this year or carried forward.
  • Evaluate whether trust distribution minutes can be structured to utilise group losses.

• Review Plant and Equipment:
  • Identify and write off any scrapped assets from the depreciation schedule.  
  • Reassess the effective lives of assets and consider increasing depreciation rates if appropriate. 

• Repay Division 7A Loans:
  • Cash repayments can reduce the requirement for dividends to be declared.

• Consider Section 100A Compliance for Trusts:
  • Maintain records of payments made on behalf of adult beneficiaries (eg. university fees, car expenses, excluding domestic expenses relating to the family home).
  • Best practice would be to make these payments from the trust’s bank account.

• Review Company Tax Rate:
  • Base rate companies pay tax at 25%, while all others pay tax at 30%.
  • Consider the impact of timing on dividends and the tax credit vs top-up tax payable.
  • Review any planning that could occur to achieve the desired tax rate (may be lower to reduce tax, may be higher to maximise franking credits on dividends).

• Access Refundable Franking Credits:
  • Review for opportunities to access refundable franking credits before 30 June 2025. 
  • Consider the impact of loss entities generating highly franked income.

• Claim and Document Research & Development Activities:
  • When engaged in R&D activities, maintain detailed records of eligible activities and related expenditure to support R&D Tax Incentive claims.
    
    
• ATO Interest Charges No Longer Deductible (from 1 July 2025):
  • General Interest Charge (GIC) and Shortfall Interest Charge (SIC) will no longer be deductible from 1 July 2025.
  • Review and pay any outstanding tax liabilities before 30 June 2025 to maintain deductibility.
  • Consider alternate financing to avoid non-deductible interest.

• Plan Your Tax Position:
  • Review options to reduce or defer tax payments.
  • Manage cash flow to prepare for tax instalments and the tax due on lodgements of tax returns.
  • Identify opportunities to vary tax instalments and improve cash flow.
  • Implement the above tax planning and other savings.

If you would like to discuss how you can better manage your business’s tax affairs and potentially improve your business’s cash position, please contact our office on (08) 6212 7200 to speak to one of our qualified advisors.