Australia: End of financial year tax planning tips

Last Updated: 3 June 2012

Although the May Federal Budget could introduce some new considerations into your tax planning strategies, there remain many tactics you can consider to ensure you pay not one cent more tax than is necessary.

Remember the best tax planning should commence in July; that is, as early as possible in any financial year, not right near the end of it. Proper tax planning is more than just finding bigger and better deductions – and the best tips are those that set your tax affairs in better order for future income years.

A central fact to remember of course is that after July 1, 2012, all individual tax rates will be changing due to the introduction of the price on carbon. The tax-free threshold will rise from $6,000 to $18,200. From there the marginal rates will be 19% up to $37,000, then 32.5% to $80,000, 37% up to $180,000, and 45% after that.

Not all of the following tips will suit your circumstances, but as a list of possibilities they may get you thinking along the right track. Of course check with this office if you need further information.

Make use of your tax agent

No-one knows your affairs better than yourself, so you will recognise if any of the following tax tips applies to your circumstances. But no-one is better informed as to what is appropriate to your situation than your tax agent. Also, a tax agent's fee is an allowable deduction in the year it is paid.

Every individual taxpayer is required to lodge their return before October 31, but tax agents are given more time to lodge, which can be a handy extension to the payment deadline. Of course, if you're sure you are going to get a refund it's no use delaying, so in these cases it is worth getting all of your information to your tax agent as soon as you can after July 1.

Pre-pay investment loan interest

See if you can negotiate with the lender of your investment property or share loan to pay interest on borrowings upfront, thereby giving you a deduction this year. Most taxpayers can claim a deduction for up to 12 months ahead, and make sure your lender allocates the payment correctly, as the deduction is only allowed against the costs of financing income producing investments, such as interest charged on borrowings.

Bring forward expenses, defer income

Try to bring forward any deductions (like the interest payments mentioned above) into the 2011-12 year. If you know, for example, that next fiscal year you will be earning less (maternity leave, going part-time etc) deductible expenses that can be brought forward into the present financial year will provide more financial benefit.

An exception will arise if you expect to earn more next financial year. In that case, especially as some tax rates after the tax-free threshold are going up slightly, it may be to your advantage to delay any tax-deductible payments until next financial year, when the financial benefit of deductions could be greater.

And by legally deferring income into 2012-13, you may take advantage of the higher tax free threshold arising out of the carbon tax package (of course these tactics depend very much on your personal circumstances).

A strategy that can take advantage of this area of tax planning is to place money into a term deposit that matures after June 30, where interest will accrue to you in the 2012-13 tax year. It's probably leaving it a bit late to adopt this strategy now, but is one to keep in mind for later years, should circumstances and tax regimes suit.

Investment property

Many expenses stemming from owning a rental property are claimable, so it can be helpful to bring forward any expenses before June 30 and claim them in the present financial year.

Use the CGT rules to your advantage

If you have made and crystallised any capital gain from your investments this financial year (which will be added to your assessable income), think about selling any investments on which you have made a loss before June 30. This way the gains you made on your successful investments can be offset against the losses from the less successful ones, reducing your overall taxable income.

Of course, tread carefully and don't let mere tax drive your investment decisions – but check with your tax agent whether this strategy will suit your circumstances.

Put as much as you can into super (and the rules change after July 1)

If you are aged less than 50 you can put up to $25,000 (pre-tax) into your super fund, and those aged between 50 and 74 can generally contribute up to $50,000 pre-tax. But after July 1, 2012, the cap will be $25,000 for everyone – so make the most of it while you can. Only over-50s with balances of less than $500,000 will be able to make contributions of $50,000 a year (based on current government announcements).

But be aware of how much you are putting in, as exceeding the limits can see tax levied at punishing rates. And if you salary sacrifice into super tread carefully, as in some income years (and 2011-12 is one of them) there are 27 fortnightly pay periods instead of the usual 26.

Some relief was legislated during the year however, so that in some cases up to $10,000 in excess concessional super contributions can be withdrawn and treated as assessable income, (and so be taxed at marginal rates) rather than incurring excess contributions tax (however you are only allowed one such re-allocation).

You may also like to take advantage of the government's co-contribution policy while it lasts at its present level. Under the current rules, the government pays dollar-for-dollar (up to $1,000) from incomes of $31,920, reducing up to, and phasing out at, $61,920. After July 1, 2012 the matching rate will be reduced to 50%, with a maximum co-contribution of $500 for people with incomes up to $31,920 in 2012-13 (phasing out at $46,920).

Split super contributions with your spouse

Most concessional super contributions – salary sacrificed, compulsory, and personal contributions for which you can claim a tax deduction – can be split between members and spouses. So some super contribution amounts can be directed to a spouse's super fund.

A smart use of the strategy, if your circumstances suit, will be for a spouse whose super savings are under $500,000 to direct contributions to the spouse who may have more than $500,000. This will help the lower-balance spouse stay under the threshold for longer, and boost the family's retirement savings.

In the same vein, if both partners have funds under the threshold, contributions can be directed to the lower-balanced fund so that both stay under the threshold longer. But remember, the contribution cap applies to the member making the contributions, even where these are directed to the spouse's fund

Children still at school?

If you have school age children, you should investigate the education tax refund scheme. You may qualify for a refund of 50% of expenses, up to a maximum of $409 for primary school children and $818 for secondary students.

The refund is available for items like laptops, educational software, textbooks and, for the first time, uniforms (included from July 1, 2011). School fees are not covered. And if you've been pestered to get an iPad, these are treated like a laptop for the purposes of the education tax refund.

R&D Tax Credit

The new Research & Development Tax Credit provides a 45% refundable offset to businesses with an annual turnover under $20 million for eligible R&D expenditure, and a 40% non-refundable offset to all other eligible entities. The new rules narrow the definition of eligible R&D but allow for holding intellectual property offshore, and businesses must separate their 'core' and 'supporting' R&D activities.

Final reminders

You can claim up to $300 of work-related expenses without receipts, provided the claims are for outgoings related to earning assessable income.

A couple of tax reforms have been deferred. The 'standard' deduction ($500 for first year of operation, and $1,000 thereafter) for work related expenses has been deferred until July 1, 2013, as has the 50% tax discount for interest income.

And remember, the above tax tips are not exhaustive nor will they suit every taxpayer's circumstances. It is essential that you talk to your tax agent for more tailored advice.

This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2011 Moore Stephens Australia Pty Limited. All rights reserved.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions