To summarise, these matters must be approached with caution and handled
carefully, as tax planning decisions affect not only the individual entity but the
entire group. Goba Sir emphasised that trust income should be distributed in a
manner that minimises the overall tax outflow of both the trust and its
beneficiaries.
This objective can be achieved by carefully analysing the applicable tax slabs
of the beneficiaries and allocating a higher proportion of trust income to those
who fall within lower tax brackets. He also highlighted the importance of strong
coordination between the YTD team and the TAX team. This ensures that
wages, dividends, allowances, and bonuses recorded in the company
accounts are correctly reflected as income in the respective individual tax
returns. Goba Sir further noted that correctly reporting dividends, allowances,
and bonuses reduces the need for BAS amendments which would be required
under wages, and fewer amendments help maintain a positive impression with
the ATO.
Additionally, Goba Sir recommended that the Year-To-Date (YTD) finalisation
for a group should ideally be handled by a single person. This approach
significantly reduces the risk of overlooking intercompany transactions and
adjustments.
