We asked our specialist tax consultant to tell us what matters to GPs and GP clinic owners now that we are all preparing for the end of the tax year on 30 June.
This year there is quite a lot happening that is likely to be relevant to GPs. Doctor tax deductions are always an interesting topic during this time of the year, but there are more things GPs can do to optimise their tax. Alan Leung of Aspiron Consulting Group has highlighted some of the key tax action points to consider:
Superannuation
- Consider topping up your concessional super contributions to the cap of $30,000 or $35,000(depending on your age) as the cap will reduce to $25,000 after 30 June 2017.
- Consider topping up the non-concessional super contribution before the annual cap is reduced from $180,000 to $100,000. Where the three-year “bring forward rule” is utilised, the current cap of $540,000 will be reduced to up to $300,000 after 30 June 2017
- For those doctors who have a superannuation pension fund holding which exceeds $1.6 million (excluding transition to retirement pension), it may be worth bringing the value of the holding down to below $1.6 million. This may include resetting the cost base of the assets before 30 June 2017.
Investment owners
- If you were planning a trip to inspect your residential rental property or purchasing a rental property with existing depreciable items, consider doing it before 30 June 2017 to obtain a tax deduction as this will not be available after 30 June 2017
- For doctors who have invested in, or are considering investing in, a tax effective investment, ensure the promoter has obtained an ATO Product Ruling and operated the scheme in accordance with the Ruling, and check if the investment is the subject of an ATO Taxpayer Alert.
- For doctors who are considering selling an asset, consider the tax impact of the capital gain and the utilisation of capital loss if available. This may include taking advantage of the small business CGT concessions where available.
- With the 2% temporary budget deficit levy not continuing after 30 June 2017, there are advantages for certain high-income taxpayers to postpone recognising income and capital gains until after 30 June 2017 and to accelerate deductions prior to 30 June 2017.
Company owners
- For doctors who run their medical practice using a company, it may be advantageous to postpone getting income until after 30 June 2017 to obtain lower tax rates on income or bring forward deductible expenses (eg prepaying expenses) to gain the advantage of the higher tax benefit before 1 July 2017.
- Ensure all personal concessional super contributions or super guarantee for their employees are made by the doctors/owners before 30 June 2017 to ensure deduction is obtained this year. With the 30 June 2017 being on a Friday, we suggest that doctors make their super contributions a few days before 30 June to ensure the money is received and allocated by the super funds before 30 June 2017.
- For those doctors who are in business and have a turnover of less than $10 million per year, consider purchasing depreciable assets for the business of less than $20,000 so that the entire cost may be written off against their income this year.
Disclaimer: The comments above have been prepared for informational and general purposes only and are not intended to provide, and should be relied upon for tax, legal or financial, or accounting advice. You should consult your own tax, legal, financial or accounting advisors before engaging in any transaction or making a claim on a tax return. Alan Leung of Aspiron Consulting Group can be contacted on: [email protected]