11 tax planning strategies for Australian accountants

The proposed 2026-27 Federal Budget reforms and the ATO’s expanded scope under Part IVA, Division 7A, and Section 100A mean that the strategies accountants used last year, particularly for their business clients, may need revisiting.

This article walks you through legitimate tax planning strategies for accountants with business clients. It discusses what they are, when to use them, and how to apply them across your entire client book before 30 June next year.

Key takeaways

• These are legal, ATO-compliant tax planning strategies for accountants to use, not to be confused with tax avoidance.
• They span structure, superannuation, timing, trusts, and asset decisions.
• The right mix depends on the client’s structure, income, and goals
• Most must be actioned before 30 June to apply to the current year.

A quick note on legitimate vs aggressive tax planning

Legitimate tax planning reduces your client’s tax liabilities through legal methods, such as using tax incentives, deductions, and credits as legislators intended. In contrast, aggressive tax planning, or “tax avoidance,” exploits loopholes and technicalities in tax laws, risking scrutiny under Part IVA or getting struck down in an audit.

Your role is to select legitimate strategies that fit your client’s situation, without engaging in tax-avoidance schemes that could harm you or your client.

11 tax planning strategies at a glance

Structure and entity strategies

Structure is often where the biggest planning opportunities begin. It determines how your client's income is taxed, how profits are distributed, and which concessions may be available. That’s why it helps to review structures annually.

Choosing or reviewing the business structure

Align your client’s operational, tax, and liability goals by choosing the best foundational entity (e.g., sole trader, partnership, trust, or company).

For example, your client may have started as a sole trader or partnership. As their business grows and profits increase, review whether a company or trust structure would better support their commercial and tax objectives.

Using this strategy grants your client lower corporate tax rates, better asset protection, and flexible profit distribution.

Restructure rollovers for small businesses

As small businesses grow, their initial structure may no longer suit their needs. By law, eligible small businesses can change their structure without triggering income tax consequences. Doing so can help improve their asset protection, support future growth, or create greater flexibility for tax planning.

Before recommending this strategy, check that your client meets eligibility requirements and that the change is driven by genuine commercial reasons, rather than tax benefits alone.

Using a “bucket company” to cap trust distribution tax

If your client operates through a family trust, you may distribute income that would be taxed at higher personal rates to a designated private company. That company becomes a "bucket company," receiving trust distribution and paying tax at the corporate rate, helping defer additional personal tax.

However, this strategy is under threat by changes proposed in the Federal Budget released in May 2026. It's a good strategy for now but may become harder to do in the future. Alternative strategies may be available once changes to trusts are confirmed with the final Federal Budget.

This strategy can also build franking credits for future distributions. However, this arrangement must be managed carefully to avoid Division 7A consequences.  

Under Division 7A, loans, payments, or other financial benefits provided by a private company to a shareholder or their associate may be treated as deemed dividends for income tax purposes.

When using this strategy, watch out for situations that can trigger Division 7A, such as:

• Unpaid present entitlements (UPEs): Leaving the bucket company’s entitlement unpaid without putting the arrangement on appropriate Division 7A terms.
• Non-compliant loans: Failing to properly document related-party loans from the bucket company to the trust, shareholders, or their associates. Not charging at least the benchmark interest rate or not meeting the minimum yearly repayment requirements also count as non-compliance.
• Poor documentation: Failing to maintain required loan records or meet minimum yearly repayments can result in a deemed dividend and unexpected tax liabilities.

Superannuation strategies

Superannuation, or super, is one of the simplest ways to reduce your client’s taxable income and help build their retirement savings. Consider strategies such as maximising concessional contributions and making contributions well before year-end.

Maximising concessional contributions

Make sure your clients are making the most of their annual concessional contributions cap. If they have fluctuating income or haven't reached their cap in previous years, check whether they're eligible to carry forward unused concessional contributions.

To use the carry-forward rules, your client must meet these conditions:

• Total super balance: Their balance is below $500,000 at the end of the previous financial year.
• Unused concessional cap amounts: They have unused cap from one or more of the previous five financial years.
• Current-year concessional contributions: They must exceed the annual concessional contributions cap before any unused cap amounts are applied.

For further guidance, check the ATO's guidance on concessional contributions caps.

Timing contributions before year-end

Super contributions need to hit your clients’ funds before 30 June to count in that financial year. If you leave contributions until the last days of June, you increase the risk of hitting processing delays that push your tax deductions to the next year, even if you’ve sent contributions on time.

To avoid this, advise your clients to always get their super payments sorted out early.

Timing strategies (income and deductions)

Timing strategies focus on when income is recognised, or deductions are claimed. Where the rules allow, defer income, pull deductions forward, or prepay regular expenses to move tax into a more favourable year. This helps your clients keep cash in their business longer and lower their tax bill.

Deferring income or bringing forward deductions

Where ATO rules allow, delay your client’s income and its tax liability to the next financial year. Or, move eligible tax deductions forward into the current year to reduce their taxable income.

Common situations where these strategies may be appropriate include:

• Deferring income: When your client expects to be in a lower tax bracket next year due to plans like semi-retiring or taking parental leave. Or, when your client is at the edge of a major tax threshold and is at risk of losing certain tax credits and deductions.
• Bringing forward deductions: When your client’s current-year income is unusually high due to a standout sales year or a large one-off capital gain. Or, when your client has high out-of-pocket expenses, and bunching these expenses together can help you exceed deduction limits.

Prepaying eligible business expenses

Depending on applicable tax rules, prepaying eligible expenses before 30 June allows you to claim deductions earlier.

Common prepaid expenses include:

• Rent
• Insurance premiums
• Professional subscriptions
• Interest on eligible business loans

Before using this strategy, check that your client is entitled to claim the deduction in the current financial year.

Trust distribution strategies

If your client operates through a trust, review distributions before finalising their tax strategy and planning for the year. Trust distribution strategies involve choosing the most tax-efficient way to share trust income among family members or companies.

Because trust taxation is closely regulated, make sure to document all distributions and check that they align with the trust deed.

Also, consider Section 100A implications where relevant. Section 100A prevents trust income from being allocated to lower-taxed beneficiaries if someone else actually enjoys the financial benefits. If triggered, the ATO can tax the trust at the highest marginal rate (47%).

Where concerns arise, review the arrangement and make necessary adjustments before finalising distributions.

Optimising distributions across beneficiaries

Review each beneficiary's tax positions, then distribute trust income in a way that improves the group's overall tax outcome. For example, where the rules allow, you may allocate profits to family members in lower income tax brackets.  

When reviewing distributions, consider the following for each beneficiary:

• Taxable income
• Marginal tax rate
• Eligibility for offsets or concessions
• Overall financial circumstances

Be sure every distribution aligns with the trust deed and reflects each beneficiary's genuine entitlement to stay compliant and prevent triggering Section 100A.

Streaming income to the right entity type

A trust receives income from different sources (e.g., stock dividends, bank interest, or the sale of property). Different income types receive different tax treatment. If you match the right income type to the right beneficiary, your client gets to pay the lowest possible tax.

Here are examples of the right income type matched to the right beneficiary:

• Stream capital gains to individuals: Individual beneficiaries can use the 50% Capital Gains Tax (CGT) discount.
• Direct franked dividends to individuals: Individuals can utilise franking credits to offset personal tax or claim refunds.
• Use corporate beneficiaries for interest income: Passive interest income doesn’t carry tax discounts, making corporate tax caps ideal.

Asset and investment strategies

Asset purchases and investment decisions can also create valuable tax planning opportunities. Two legitimate tax planning strategies in this area include timing your client’s investments and purchases and managing Division 7A loans.

Instant asset write-off and depreciation timing

If your client is already planning to buy new equipment, vehicles, or technology, bringing the purchase forward may improve their tax position.

Currently, eligible small businesses can claim an immediate deduction under the instant asset write-off for eligible assets. Assets that don't qualify must generally be depreciated over time. Eligibility depends on your client’s business's aggregated turnover, the asset's cost, and when it was first used or installed for use.

Pro-tip: Always check the latest thresholds, eligibility criteria, and deadlines before recommending an accelerated purchase, as these rules can change. Refer to the ATO's guidance on the instant asset write-off for the current rules.

Managing Division 7A loans

Division 7A applies to private companies that lend money or provide financial benefits to shareholders or their associates.

Before year-end, review outstanding loans and confirm that:

• A complying Division 7A loan agreement is in place.
• Minimum yearly repayments have been made.
• The required benchmark interest rate has been applied where relevant.

Addressing these issues before year-end can help your clients avoid deemed dividends and unexpected tax liabilities. 

How to apply these strategies across clients

Recommending the right tax planning strategy is straightforward. Applying it consistently across dozens or hundreds of clients before 30 June each year is where many firms struggle.

Right now, many firms still rely on spreadsheets, manual calculations, and disconnected workflows. As their client numbers grow, manually entering data, searching across multiple spreadsheets, and rebuilding calculations for every client becomes time-consuming and prone to errors.

Tax planning software can help you automate these repetitive tasks, freeing you and your team to focus on the higher-value work of advising clients. The best solutions also let you model different scenarios, consistently apply proven planning strategies from a playbook, and give bespoke advice at scale. 

How ChangeGPS TaxPlan helps

ChangeGPS TaxPlan helps automate your tax planning workflows so you can focus on delivering timely tax planning advice.

How TaxPlan can help your firm: