Opportunities for Advisers

High Net WorthClients

For this financial year 2009/2010, a new measure has been legislated targeting high net worth individuals. In prior years, business losses could be offset against other income, provided the business met the commercial business tests. These tests are designed to establish the genuineness of a business. From the 1^st July 2009, a new income means test must be passed for business losses to be deductible, in addition to the “commercial”  business test.

Business losses are not deductible anymore for individuals earning over $250,000 in adjusted taxable income. Adjusted taxable income is defined as taxable income plus reportable fringe benefits plus net investment losses and reportable superannuation contributions.

The losses would only be used when the individual’s income falls below the $250,000 income mark in future years.

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