CASE STUDY

A little case study but a lot of money

Tax planning isn’t always about claiming as many deductions as you can. Sometimes, it’s better not to claim deductions.

The Problem

Big companies pay tax at 30% on its profit and when it pays dividends to its investors, it passes the 30% tax already paid onto its investors as a tax credit. But to receive the benefit of the 30% tax credit, investors must have at least $1 of taxable profit. If an investor has made a loss, the 30% tax credit is lost.

This situation rose for a client of ours who was a new investor. The client had incurred costs but had not yet received much income resulting in a small loss.

The Solution

We advised the client not to claim a deduction for costs of around $400 turning the loss into a small profit. As a result, the client was entitled to the tax credits of over $3,000.

The benefit

The net benefit to the client was around $3,000.

If you are looking for tax planning advice, let us help.

Enquiry

Ready to discover how Ahead For Business can help your business grow? Leave your details below and we'll be in touch.