May E News 2025

In this edition, we guide you to the EOFY 2025: Stay informed with our Mid-Year Market Update, understand the $20,000 instant asset write-off and key family trust considerations, and prepare for the July 2025 ATO interest deductibility changes. Discover our Audit Shield service for peace of mind and join a free webinar on break-even analysis for small businesses in select regions. Plus, explore local Community Events in the Northern Rivers. Let's navigate the financial year end together.

Navigating the global economic landscape, this month highlights significant tariff developments in the U.S., where recent court decisions have introduced volatility into international trade, alongside a robust rally in both U.S. and Australian equity markets during May, fuelled by easing trade tensions and positive corporate earnings. Domestically, we also examine the federal Labor Government's proposed Division 296 legislation and its potential impact on high-net-worth superannuation accounts, urging clients to consider the implications for their long-term financial planning.

If your small business, with an aggregated annual turnover under $10 million and using simplified depreciation, has acquired or plans to acquire business assets this financial year, remember that the instant asset write-off limit for the 2024-25 income year is $20,000 per asset for eligible new or second-hand items first used or installed ready for use between 1 July 2024 and 30 June 2025, potentially allowing you to immediately deduct the business portion of their cost and even the first improvement cost for previously claimed assets within the same timeframe and limit, provided usual deduction rules and record-keeping requirements are met.

As the financial year draws to a close, trustees of family trusts with existing Family Trust Elections (FTEs) or Interposed Entity Elections (IEEs) must proactively review these elections and clearly understand their defined family group to mitigate the significant 47% Family Trust Distribution Tax (FTDT) liability that arises from distributions made outside this strictly defined group, especially considering potential changes in family structures or business expansions; maintaining robust governance, record-keeping, and annual reviews of these elections are crucial, as the ATO has no discretion to waive FTDT, underscoring the importance of seeking advice from a registered tax agent if you have any uncertainties or are considering making such an election, given its potentially long-term implications.

Effective for income years starting on or after 1 July 2025, legislative amendments now prohibit income tax deductions for all ATO interest charges, including the general interest charge (GIC) and the shortfall interest charge (SIC), regardless of the income year the underlying tax liability relates to, meaning any GIC or SIC incurred from this date forward is non-deductible, and consequently, any later remission of such non-deductible interest will not be treated as assessable income, while GIC or SIC incurred before 1 July 2025 remains deductible in the 2024-25 and earlier income years, with any subsequent remission being treated as assessable income in the year of remission.

We are pleased to introduce our Audit Shield service, offering you the option to protect yourself from unexpected costs associated with ATO and other government revenue authority audit activity across your individual, business, or SMSF affairs; with increased scrutiny anticipated, understanding your financial position, seeking expert advice when contacted, and considering the benefits of Audit Shield can provide valuable peace of mind and financial security.

Join a FREE webinar on Wednesday, 25 June 2025, from 1:00 pm to 3:00 pm,  on Smarter finance – know your breakeven point.  Presented online by qualified small business financial counsellor Court Sayer-Roberts, this session is designed for small business owners in the Illawarra, South East & Tablelands, and Riverina Murray regions, whether you're just starting out or have an established venture. Discover why a holistic understanding and calculation of your break-even point is essential for sustainability, informed decision-making, and ultimately aligning your business efforts with your personal and professional goals. Learn practical skills to utilise financial reports and tools to calculate and interpret this crucial metric, empowering you to optimise your business for better gains and a stronger return on investment. Don't miss this opportunity to gain valuable insights – register now as spaces are limited to 50 attendees.

The Northern Rivers holds regular Community Events.  See what's on and keep up to date on all the fantastic opportunities available and help to support local.  There is plenty to do. 

A reminder, there are some important lodgement dates to note this month.

Please note our office will be closed on Monday, 9 June 2025 for the Kings Birthday.

The WD Nicholls Team

Tariff Developments

In late May 2025, the U.S. trade landscape was upended by a pair of landmark court decisions. On 28 May, the U.S. Court of International Trade declared unlawful the so-called “reciprocal” and “trafficking” tariffs former President Trump had imposed on Canada, Mexico and China—ruling that the International Emergency Economic Powers Act does not grant the president carte blanche to levy broad-based duties . A day later, however, the U.S. Court of Appeals for the Federal Circuit temporarily reinstated most of those tariffs pending appeal, injecting fresh uncertainty into global supply chains . Meanwhile, Treasury Secretary Scott Bessent warned that bilateral U.S.–China trade talks have stalled and may require direct conversations between President Trump and President Xi Jinping to break the deadlock.

U.S. Equity Markets

U.S. stock markets rallied in May, driven by easing trade tensions and robust corporate earnings. The S&P 500 posted a 5.9% total return for the month—its strongest monthly gain so far this year—bolstered by better-than-expected Q1 earnings and optimism around potential rate cuts later in 2025 . The tech-heavy Nasdaq Composite led the charge, surging 8.0% in May as investors scooped up AI and semiconductor stocks ahead of looming export controls . Meanwhile, the Dow Jones Industrial Average finished the month up 0.8%, reflecting more modest gains in traditional industrial and consumer-oriented names.

Australian Equity Markets

Australia’s benchmark ASX 200 also enjoyed a strong bounce in May. After sliding through February and March, the index recovered from its April lows with consumer- and commodity-linked stocks leading the rebound. Superannuation funds—a bellwether for long-term domestic sentiment—recorded a 3.8% gain in May, contributing to an 8.6% rise in the financial-year-to-date performance of growth-oriented funds . This upswing was underpinned by expectations that the trade skirmishes between the world’s two largest economies will abate and that the Reserve Bank of Australia will begin cutting rates later in the year to support growth.

Policy Outlook: Labor Government and Division 296

The federal Labor Government under Prime Minister Anthony Albanese has signalled its proposed Division 296 legislation would double the tax rate on earnings within superannuation accounts exceeding AUD 3 million—from the current 15% to 30%—in a bid to raise revenue. High-net-worth clients should begin modelling the impact of this change on long-term retirement outcomes and may need to review strategies.

Have you purchased or are you purchasing a business asset this financial year? The instant asset write-off limit is $20,000 for the 2024-25 income year.

If your business has an aggregated annual turnover of less than $10 million and uses thesimplified depreciation rules, you may be able to use the instant asset write-off to immediately deduct the business part of the cost of eligible assets:

• The full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use for a taxable purpose between 1 July 2024 and 30 June 2025.

• New and second-hand assets can qualify; although some exclusions and limits apply.

• If you claimed an immediate deduction for an asset’s cost under the simplified depreciation rules in an earlier income year, you can also immediately deduct the first improvement cost for that asset if it is incurred between 1 July 2024 and 30 June 2025 and less than $20,000.

• The $20,000 limit applies on a per-asset basis, so you can instantly write off multiple assets as long as the cost of each asset is less than the limit.

The usual rules for claiming deductions still apply. You can only claim the business part of the expense, and you must have records to prove it.

Remember, it’s important to keep good records to help you or your tax professional work out your claim. For more information, see Record keeping for small business.

Source and credit: ATO.gov.au

When considering trustee resolutions in the lead up to 30 June, it's important for trustees of family trusts who have made a Family Trust Election (FTE), or entities with an Interposed Entity Election (IEE) to:

• review their FTEs and IEEs

• understand who is in their family group.

This is critical to help lower the risk of any FTDT liabilities arising.

Once a valid FTE or IEE is made, it’s important to be mindful of who the specified individual is (for each election). This is because there is a strict legal definition of family group, and it’s based on who the members of the 'specified individual’s' family group are. Often in private groups, there may be multiple family trusts with different specified individuals (which means there will be differences in who is in the 'family groups'). There may have also been expansion of the business with new entities or changes in family members (e.g. if there was a divorce). While the election is in effect, FTDT will apply if any distributions are made outside the family group. FTDT is a 47% tax, payable by a trustee, director, or partner.

To ensure you don’t trigger FTDT liabilities, before making distributions, trustees should:

• maintain strong governance and record-keeping practices

• understand what FTE or IEE elections an entity or group has in place

• identify the members of the specified individual’s family group.

Trustees should review this information on an annual basis and keep these elections front of mind when administering their tax affairs.

The Commissioner has no discretion to ignore the application of FTDT, cannot limit the period FTDT applies and has no power to extend the time to revoke or vary elections.

If you've not made an FTE or IEE before, or are considering making one at the end of the financial year, it’s important to consider both the current and future impacts of making the election. While the concessions from making elections can be advantageous, there can be future limitations, constraints and potentially significant financial impacts for the private group for generations to come. 

The ATO are seeing an increase in FTDT issues due to inadequate record keeping, succession planning, intergenerational expansion of businesses and evolving private groups. They encourage trustees and their advisers to review now.

If you’re unsure about any matters related to FTE or IEEs you should speak to your registered tax agent.

Source and credit: ATO.gov.au

About this measure

On 13 December 2023, as part of the 2023–24 Mid-Year Economic and Fiscal Outlook (MYEFO), the government announced it would amend the tax law to deny income tax deductions for ATO interest charges incurred in income years starting on or after 1 July 2025. This measure is now law.

These amendments deny deductions for ATO interest charges (being the general interest charge (GIC) and the shortfall interest charge (SIC)).

This means that taxpayers can no longer deduct GIC or SIC incurred on or after 1 July 2025.

When are ATO interest charges incurred?

Whether you can claim a deduction will depend on when GIC or SIC is incurred. This is when you become liable for the interest charge, for example:

• GIC imposed on unpaid tax liabilities is incurred on a daily basis.

• SIC imposed on an unpaid income tax shortfall is incurred in the year you are served a notice of amended assessment.

ATO interest charges incurred on or after 1 July

Any GIC or SIC incurred on or after 1 July 2025 is not deductible.

This includes all GIC and SIC in respect of outstanding or late payments of tax for income years both before and after 1 July 2025.

As they are not deductible, any GIC or SIC that is later remitted will no longer need to be included as assessable income.

ATO interest charges incurred before 1 July

Any GIC or SIC incurred prior to 1 July 2025 is not impacted by the changes to the law and will continue to be deductible for the 2024-25 and earlier income years.

If you have (or can) deduct GIC or SIC for the 2024-25 or an earlier income year and it is later remitted, the amount that is remitted will need to be included in your assessable income in the year in which the remission occurred.

Source and credit: ATO.gov.au

We’re pleased to introduce you to our Audit Shield service.

Audit Shield is an optional service we are providing to protect you from incurring unexpected costs as a result of an audit, inquiry, investigation, review or examination (audit activity) of lodged returns or financial compliance obligations instigated by the Australian Taxation Office (ATO) and other government revenue authorities. Specific levels of cover are available for individuals, businesses and Self Managed Superannuation Funds (SMSFs).

Our recommendations to combat the increase in audit activity:

1. Be in the know

Gain a better understanding of your financial position and tax particulars by talking with your accountant. Your accountant can also conduct a risk assessment, and in doing so you could both discover a better way to structure your affairs.

2. Seek expert advice

In the event that you are contacted by the ATO or other government revenue authorities, the best action for you to take is to advise them that you would firstly like to talk to your accountant. As your accountant, we have the experience in dealing with these matters and will be more likely to reduce the time and cost required to attend to the audit activity in question.

3. Consider Audit Shield

We proudly offer our Audit Shield service as a mechanism to protect you against unplanned professional fees that can arise as a result of government revenue authority initiated audit activity. With the government’s focus on increasing gross revenue, taxpayers will be scrutinised – increasing your chances of an audit, inquiry, investigation, review or examination. Even if no adjustments are required to your lodged returns, significant costs can still be incurred in order to satisfy the requests of the ATO or other government revenue authorities responsible for the instigation.

All clients have the option to take advantage of our Audit Shield service. If you have any questions, please don’t hesitate to contact our team.

For more information visit: https://www.auditshield.info/services/.

FREE WEBINAR Wednesday 25 June 2025, 1:00 PM - 3:00 PM (AEST)

Where

Online.

When

Wednesday 25 June 2025, 1:00 pm - 3:00 pm (AEST).

The Presenter

Court Sayer-Roberts - Court, a qualified small business financial counsellor, brings over 20 years management experience in New Zealand and Australia. Court also codeveloped a federally funded small business support program for small businesses experiencing financial hardship. 

About this event

In this webinar we will focus on the importance of why understanding and calculating the break-even point is pivotal for small business owners, especially when approached holistically. This involves considering all aspects of their business to determine the point at which their revenue covers their costs and ultimately aligns business efforts with their goals for both business and personal life.

This webinar is aimed at small businesses throughout Illawarra, South East & Tablelands and Riverina Murray who have just started or have an established business and we have the capacity to host up to 50 people.

Learning Objectives:

1. Comprehend the break-even point as a crucial metric for small business sustainability.

2. Utilise financial reports and tools to calculate and interpret break-even point.

3. Apply break-even analysis for better gains.

Learning Outcomes:

1. Attendees will comprehend the break-even point's importance in determining the minimum sales needed for a sustainable business model.

2. Attendees will learn how to use financial reports and tools to calculate and interpret the break-even point, aiding informed decision-making.

3. Small business owners will gain the knowledge to apply break-even analysis, optimising their personal return on investment in alignment with business and lifestyle goals.

To register your interest click the link below.

Source and credit: Mybusiness.service.nsw.gov.au

We always like to support our locals!  Here are some community events happening this month (in date order).

Byron Bay Community Market next date is Sunday, 1 June | 8:00 AM to 3:00 PM

The Byron Bay Community market is held from 8:00 am to 3:00 pm on the 1st Sunday of every month.

The market hosts an eclectic collection of stalls that showcase what Byron has to offer.

Road closures and traffic changes on market day

• Jonson Street is closed to traffic at the corner of Byron and Marvel Streets from 5am to 5pm.

• Traffic is diverted via Fletcher Street.

• The Lawson Street South carpark is closed from 5am to 5pm.

• There may be traffic delays are on Lawson Street between the Shirley Street and Jonson Street roundabouts between 6am to 8am and 3pm to 5.30pm.

• The railway carpark is open under traffic control via the laneway on Jonson Street.

• Traffic controllers will be in place on market day. 

Location: Byron Bay CBD, Railway Park, Jonson Street, Byron Bay

Service NSW Mobile Service Centre date on Wednesday, 4 June | 9:00 AM to 3:30 PM

Service NSW Mobile Service Centre visits our community to personally deliver access to essential NSW Government services, including:

• Drivers licence, photo card applications and renewals

• Driver Knowledge Tests

• Working With Children Check applications

• NDIS Worker Check

• Applying for birth, death and marriage certificates

• Cost of Living service to access more than 70 government rebates and savings.

Service NSW Mobile Service Centres are fitted with a ramp for easier access for all members of the community.

Check the timetable and find out what you need to bring by visiting Mobile Service Centres.

Please check the website on the day for final confirmation of the Mobile Service Centre arrival or call 13 77 88. 

Location: Ocean Shores Country Club - Car park, 113A Orana Road, Ocean Shores

Service NSW Mobile Service Centre date on Thursday, 5 June | 9:00 AM to 4:00 PM

Service NSW Mobile Service Centre visits our community to personally deliver access to essential NSW Government services, including:

• Drivers licence, photo card applications and renewals

• Driver Knowledge Tests

• Working With Children Check applications

• NDIS Worker Check

• Applying for birth, death and marriage certificates

• Cost of Living service to access more than 70 government rebates and savings.

Service NSW Mobile Service Centres are fitted with a ramp for easier access for all members of the community.

Check the timetable and find out what you need to bring by visiting Mobile Service Centres.

Please check the website on the day for final confirmation of the Mobile Service Centre arrival or call 13 77 88. 

Location: Byron Bay RSL Club (Car park), 132 Jonson Street, Byron Bay

Furry Friends Festival 2025 date on Saturday, 7 June | 8:00 AM to 1:00 PM

This year there is a new fenced Doggy Arena happening on the showgrounds oval with some great shows to sit down and enjoy with your pooch across the morning.

Bring your pet dogs on lead for a morning of furry fun, treats, prizes and giveaways.

• Fun live music

• Delicious food and drink

• Paws & Claws Market Stalls

• Face painting

• Dog shows and trainer talks - prizes for best tricks!

• Free photo booth to get some snaps of you and your pets

• Vet advice

• Freebies, treats and lots more!

Join free Doggy Arena Shows.

8.30am to 9.30am: Fun Dog Show – Watch and cheer as dogs show off their skills at the Dogly School for Dogs!

9.30am to 10.00am: Obedience, Searching & Protection Sports Demo – See Summerland Dog Training in action!

10.00am to 11.00am: Fun-gility by Kindred Paws - Ready to test your dog’s agility? Join the fun and learn new skills with our expert trainers!

11.00am - 11.45am: Scent Games with Happy Dogs. Test your dog’s sniffing skills and participate in exciting scent challenges!

Whether you're a spectator or ready to get involved, there's something for everyone!

Location: Bangalow Showgrounds, Station Street, Bangalow, Bangalow

Council Ordinary Meeting next date is Thursday, 12 June | 9:00 PM to 5:00 PM

Council Ordinary meetings are held in the Chambers.  Click here view Council Meetings and Agendas.

If you'd like to speak at a Council Meeting, register for Public Access by visiting Address a Council meeting.

A livestream is available to watch online. 

Questions about the meeting?

• Phone: 02 6626 7051

• Email: councillorsupport@byron.nsw.gov.au 

Location: Byron Shire Council Chambers, 70 Station Street, Mullumbimby

Council Planning Meeting next date is Thursday, 12 June | 9:00 AM to 5:00 PM

Council Planning meetings are held in the Chambers.  Click here view Council Meetings and Agendas.

If you'd like to speak at a Council Meeting, register for Public Access by visiting Address a Council meeting.

A livestream is available to watch online. 

Questions about the meeting?

• Phone: 02 6626 7000

• Email: council@byron.nsw.gov.au 

Location: Byron Shire Council Chambers, 70 Station Street, Mullumbimby

Anglicare Disaster Recovery Volunteer Program date on Tuesday, 17 June  | 12:30 PM to 3:00 PM and Thursday, 19 June  | 9:30 AM to 12:00 PM

Anglicare's Disaster Recovery teams are operating in communities like Uki and Murwillumbah, providing compassionate, practical care in evacuation and recovery centres during times of disasters.

Byron Shire has the opportunity to establish its own Anglicare team.  Note:  no prior experience or religious affiliation required.

There are two information sessions in the Byron Shire:

• Tuesday 17 June from 12:30 pm to 3.00 pm at the Mullumbimby Anglican Church in Stuart Street

• Thursday 19 June from 9:30 am to 12.00 pm at the All Souls Anglican Church in Bangalow

Register here.

Location: Mullumbimby Anglican Church, Stuart Street, Mullumbimby & All Souls Anglican Church, Bangalow

Mullumbimby Community Market next date is Saturday, 21 June | 8:00 AM to 2:00 PM

The Mullumbimby Community Market is held on the third Saturday of each month from 8:00 am to 2:00 pm.

The market is a vibrant family-friendly festival held in Summers Park. Discover unique treasures among the diverse stalls offering artisan clothing, jewellery, homewares, plants, and more, all while enjoying live music and delicious food. With its warm, welcoming atmosphere and support for the local historical society museum, the Mullumbimby Community Market is a must-visit destination for both locals and visitors.

Location: Corner of Stuarts and Myocum Streets, Mullumbimby

Council Extraordnary Meeting date on Monday, 30 June | 3:00 PM to 6:00 PM

If you'd like to speak at a Council Meeting, register for Public Access by visiting Address a Council meeting.

A livestream is available to watch online. 

Questions about the meeting?

• Phone: 02 6626 7000

• Email: council@byron.nsw.gov.au 

Location: Byron Shire Council Chambers, 70 Station Street, Mullumbimby

Source and credit: Byron.nsw.gov.au/Recreation-Culture/Events-Venues/Whats-On

Key lodgment and payment dates for business

21 June

Activity statements

May monthly activity statements – final date for lodgment and payment.

25 June

Fringe benefits tax return

Lodgment and payment due date for tax agents lodging electronically.

30 June

End of financial year.

Source and credit: ATO.gov.au

Please note our office will be closed on

Monday, 9 June 2025 for the

Kings Birthday