tax planning before june is no longer required. picture of a clock with money falling down behind it.

Tax Planning – No longer a rush job in June

© 2024 First Samuel Limited

The days of leaving your tax planning to a last minute rush in June are gone.

Or should be.

This is partly because governments have reduced or removed many of the arrangements that provided for a measure of tax optimisation in past years.

Reduced superannuation contributions

For example, in FY-07 the maximum amount of tax deductable superannuation personal contributions was $105,113.1 Today, it is $27,500. Other ‘strategies’ have withered in validity, effectiveness, or legality.

Regardless of the reduced opportunity, the June focus on tax efficiency for a single year continues to be pushed by parties such as:

  • the media seeking content
  • accountants and financial planners who are trying to let their clients know they are thinking of them at least once a year
  • charities seeking a tax-deductible contribution before 30 June


1 For a person aged between 50 and 70.

Smarter thinking looks beyond superannuation and beyond this year

Another reason that June tax planning is going out of fashion is because investors and their advisers are becoming smarter.

The focus now is on, or should be on, tax efficiency over many years and inter-generationally.
This approach puts increased emphasis on the potential for investment in alternative structures (or tax entities) in addition to superannuation and personal holdings.

Note that, where appropriate, First Samuel clients already have their arrangements across a number of vehicles and with multi-year tax management.

Family trusts and company structures can provide a lower marginal rate of tax than otherwise available to the individuals. When investments are spread across these entities in addition to personal holdings and superannuation, it is possible to achieve a lower average tax rate across an individual’s or family’s total affairs.

Cost of transition to better structures

Before the establishment and use of these future-looking, tax-efficient structures, one must first focus on achieving a (relatively) smooth transition of assets from the previous structures into the new and improved structures.

This may involve the management of capital gains and identification and realisation of capital losses in a deliberate and controlled manner. This may be progressive or phased. There may also be the opportunity to use historical losses to mitigate potential gains or, occasionally, deferral of a transition where current gains are yet to exceed historical losses.

After transition

Following the establishment and transition phases the annual tax planning focuses on optimisation and fine-tuning of the overall position. Yes, thought can be given to maximising the available concessional contributions limits at the end of a financial year, or other such smaller but timely annual considerations.

But most importantly, an eye must be kept on two areas of constant change.

Firstly, any changes to your or your family’s financial arrangements or anticipated arrangements. This includes consideration of the intergenerational impact and opportunities of these arrangements.

Secondly, the impact of the inevitable changes in relevant law and regulations. These should be considered well in advance of their effective date. The current proposal to massively increase tax on superannuation member balances of more than $3m is a case in point.

We believe it is prudent to consider all potential implications of such changes as early as possible to ensure you have the flexibility to adjust your strategies if and when it is advantageous to do so.

What to do?

Stop thinking of tax planning as an exercise in getting the highest tax deduction this year.

And start thinking across both years and structures. Talk to one of our Private Client Advisors today to discuss your tax planning.

The information in this article is of a general nature and does not take into consideration your personal objectives, financial situation or needs. Before acting on any of this information, you should consider whether it is appropriate for your personal circumstances and seek personal financial advice.

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