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There have been some recent updates passed through Parliament relating to small business entities and companies. These will be outline for you accordingly.
The 3 main things to note are as follows:
The company tax rate has changed to 27.5% for companies that meet the following criteria:
The requirement to be ‘carrying on a business’ has been removed.
If the above criteria isn’t met, the company tax rate will remain at 30%.
With the company tax rate changing, this impacts the imputation rate attached to franked dividends. To work out the imputation rate for dividends, you need to assume the company turnover, assessable income and level of ‘passive income’ will be the same as the previous year.
For the 2017-18 year, the imputation rate for dividends will be 27.5% if the following criteria are met:
For the 2016-17 year, the imputation rate for dividends will be 27.5% if the following criteria are met:
If the criteria isn’t met, the imputation rate for dividends will be 30%.
To find out more information, please contact Altitude Advisory by clicking here and we will assist you with any queries you may have.
Phillip Cross, Royce Cross Agencies
Luke Talbot-Male, Adventures Beyond