Year end tax planning 

As we approach the end of the financial year it’s a good time to start thinking about what you could do to minimise your tax liability, as well as other actions required before the end of the financial year (30 June).

There are some things that are new for 2026 and there are things that we talk to clients about every year.

Discretionary trusts

  • Trust minutes/resolutions: Trustees of discretionary trusts have to resolve where they would like to distribute their income for the 2026 financial year prior to 30 June 2026. We will discuss distribution strategies with the trustees and assist with the documentation of these ahead of 30 June.
  • Careful consideration needs to be had with regards to trust distributions across family groups. The ATO has provided guidance which details their position with regards to this, and where it impacts your group, we will discuss this with you in your year-end tax planning meeting.  Alternatively, you can contact us directly to discuss.

Tax Planning Tips & Information

  • Base Rate Entity: The company tax rate for base rate entity companies remains at 25%.
  • Asset purchases: If you are an eligible small business (aggregated turnover less than $10 million) you can generally claim an immediate deduction for assets purchased under $20,000, provided the asset is ready for use by 30 June 2026.
  • Superannuation (personal): You are able to claim a tax deduction for any personal superannuation contributions up to your $30,000 cap for the 2026 financial year (which includes contributions from your employer). To claim a deduction for these super contributions, you must give your super fund a notice in the approved form and get an acknowledgement from the fund. There are also other eligibility criteria you must meet. If you haven’t used your full cap for the 2021, 2022, 2023, 2024 and 2025 financial years, you may also be able to claim an additional tax deduction for superannuation contributions up to the value of the unused cap for those years. If this is something you would like to utilise, please let us know and we can assess your eligibility and calculate how much can be utilised from prior years. This is the last year that any unused cap amount for 2021 can be utilised.
  • Capital Gains Tax: If you have made a capital gain during the 2026 financial year, you may consider realising a capital loss (if appropriate) on another asset to offset the capital gain.
  • Cash flow: Vary PAYG instalments for the June 2026 quarter (if appropriate). This is best done in conjunction with an estimate of your 2026 tax position.
  • Working from home deductions: You can use the Fixed Rate method and claim a cents per hour amount for the 2026 financial year based on the ATO rate where you worked from home. Make sure you have detailed records that record the total number of hours you work from home and the expense you incur while working from home. You can also use the actual cost method.
  • Substantiation: Ensure that you retain receipts or substantiation for any expenses you would like to claim such as those related to your work, self-education, travel and donations.
  • Motor vehicle travel: If you travel over 5,000kms in your motor vehicle for work, consider whether you should maintain a logbook or whether you need to complete a new one (to be completed every five years). If you are relying on a logbook prepared from a previous year you also need to record the odometer reading as at 30 June.
  • Trading stock: Conduct a stocktake at 30 June, write off any obsolete or damaged stock and choose your stock valuation method. You can use cost, market selling value or replacement value, for each item, and this can be changed each year. If you are an eligible small business entity and your trading stock value has not moved by more than $5,000 you do not have to do a stocktake.
  • Superannuation (businesses): Pay your super before 30 June in order to get a tax deduction for the 2026 financial year. Super contributions need to have been received by the superannuation fund by 30 June – confirm with your software/clearing house provider if there are any cut-off dates to ensure this occurs. From 1 July 2026:
    • Super guarantee contributions will be due on payday, you should ensure your payroll systems, cashflow and payment/clearing house processes are ready for this change.
    • Super guarantee contributions will change from an Ordinary Time Earnings calculation to a Qualifying Earnings calculation, in particular, all commissions are expressly included, regardless of whether they were earnt outside ordinary hours.
  • Accrued expenses: If you have a presently existing liability to pay an amount at 30 June, even where you may not have an invoice, the amount should be accrued to enable a tax deduction to be claimed in the current year.
  • Prepaid expenses: If your business is a small business entity, you are entitled to a tax deduction where expenses covering a period of up to 12 months are prepaid.
  • Bad debts: Review and write off bad debts to ensure a deduction in 2026 financial year.
  • Bonuses to staff: if you pay bonuses to employees, a simple accrual may not be enough to ensure a deduction at 30 June.  To claim a deduction, you must ensure that you have presently existing obligation to pay the bonus and that it is quantifiable.

Can we give you a hand?

If you would like any further detail on the above, or for an estimate of your tax position for the 2026 financial year, please contact your Holman Hodge advisor.

The information in this email is factual information, and not financial advice. The information is objectively ascertainable information, and is not tailored to your personal circumstances. You should consider obtaining financial advice before making a decision in relation to this information.