The Small Business Income Tax Offset (also known as the unincorporated small business tax discount) can reduce your personal tax bill by up to $1,000.  It is designed to give tax relief commensurate to businesses that operate through a company.  The company tax rate for small businesses has been reducing from 30% to 27.5%.

Individual beneficiaries of a Trust are only eligible for the tax offset if the income of the Trust is generated through conducting business activities as opposed to investment activities.  

Furthermore, individual beneficiaries are not entitled to the tax offset if the business income does not flow directly from the Trust carrying on the business.  For example, should the Trust operating the business (Trust A) distribute its income to another Trust (Trust B) which does not carry on a business, then individual beneficiaries of Trust B will be ineligible for the Small Business Income Tax Offset.

Please Refer Section 328 – 350 Income Tax Assessment Act 1997

If you would like to discuss further please contact us:

McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com

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