Published: 17 March 2007.

With the oncoming end of financial year there are a few things management rights owners need to consider to assist both themselves, their accountants and owners.

For themselves managers need to consider tax planning issues to reduce the tax payable for the 2004-2005 year. Some ideas are set out below;

• with the lowering of some individual tax rates next year the deferment of receipt of income that would flow through to an individual may take advantage of the new rates. This will only apply at higher income levels as the new rates only provide a benefit from a taxable income of $58,000 and above.
• deferment can also assist in structures where the income is distributed to individual beneficiaries before a corporate beneficiary as it will reduce the income taxed at 30%
• bringing forward expenses and in some cases prepayments can also assist in lowering taxable income
• superannuation paid on an individuals behalf by an employer can achieve attractive tax benefits by reducing the tax rate payable on the amount to 15%
• there are a number of tax effective investments available that allow a deduction of the full amount of an investment with only a small percentage required to be paid for it prior to the end of June. These effectively defer income for a number of years

In relation to your accountant the following will assist in processing your financial information and preparing taxation and other statutory returns. This list is not exhaustive but covers the standard areas of management rights operations;

• prepare copies of bank and loan statements as at 30 June 2005
• print a trial balance and bank reconciliation report
• provide a copy of you computer file after all entries for the year have been made
• a list of any investments acquired during the year
• details of any lease or hire purchase agreements entered into during the year
• prepare copies of your BAS returns for the year
• details of any new loans entered into during the year
• details of any wages paid during the year and superannuation paid
• provide log book details of motor vehicle use and estimates of private use of electricity and telephone paid by the business

For owners it is your chance to brag a bit by providing the following information which is available from most trust account computer packages. A timely dispatch of this information at year end will enhance your standing in owners eyes;

• details of occupancy percentages throughout the year
• average rent increases or reasons why not increased (e.g. refurbishment required)
• common area improvements
• overview of individual unit improvements
• summary of unit inspection program
• tax statement detailing all transactions for the year to assist completion of owners tax returns

I hope this assist and wish you a happy and prosperous new financial year.

Dennis Ivers
B.Com CA FTIA

Archer Gowland
Chartered Accounts

Management Rights Specialists

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