Newsletter October 2004
Print NewsletterIn this issue we look at:
Research Development Grants and Incentives
Government assistance relating to research and development (R&D) is provided in two forms being:
- R&D Start Program
For companies less than $50million in turnover, the "Core Start" grant provides 50% of project costs.
- R&D Tax Concession
Enables companies to deduct up to 125% of eligible expenditure incurred on R&D activities from assessable income.
For small companies an R&D Tax Offset (refundable tax offset), equivalent to the value of the deduction is available under the R&D Tax Concession provisions.
An overview of the criteria for eligibility are:
a) A company is incorporated in Australia
b) R&D activities that:
- Resolve a technical problem that can not be resolved by publicly available information;
- Is an original idea; or
- Is experimentation to resolve a technical uncertainty
c) The company bears the financial and technical risk
d) The company has control over the R&D project
e) The company has spent $20,000 or more
Export Market Development Grant
EMDG reimburses up to 50% of expenses incurred on eligible export promotional activities to any overseas market (except New Zealand), less the first $15,000. Each business may receive eight grants of up to $200,000 per year, subject to available funds.
The scheme works on a reimbursement basis, that is, you spend the money first and then you claim it back from Austrade. Money spent in a financial year is claimable through EMDG from the beginning of the next financial year.
Full details about the EMDG Scheme are available at www.austrade.gov.au/exportgrants or by calling 13 28 78.
SGC Superannuation Due 28 October 2004
28 October 2004 is the final date for payment of 9% superannuation guarantee contributions for employees for the quarter 1 July 2004 to 30 September 2004. If the super payment is not made by this date the super guarantee contribution needs to be paid to the tax office.
Please note that a written report must be provided to employees within 30 days of making the final contribution for the quarter.
Family Trust Elections and Franking Credits
Where shares are acquired within a discretionary trust after 31 December 1997, there is a 45-day holding period rule which may prevent trust beneficiaries from accessing franking credits on dividend distributions.
The reason is, discretionary trust beneficiaries do not have a fixed interest in the trust, they are deemed not to be the owners of shares at risk for the required 45-day period. However, where the relevant discretionary trust makes a family trust election, the shares in the trust are taken to be beneficially owned by the trustee and therefore beneficiaries can access the franking credits, provided the shares are held for more than 45 days.
Accordingly, a family trust election should be contemplated if the above situation applies.
If you require details about any of the items in this newsletter or would like more information, please contact us. Items in this Bulletin are general comments only. They do not constitute advice and should not be used as a substitute for business planning, financial or taxation advice.
