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Structuring

Strategic Tax Planning

“Everything starts with discovery. We get to know you, determine your goals and objectives and then find the solutions.”

Strategic Tax Planning

What is tax planning?

It is the process whereby a taxpayer’s affairs are legally organised, with the tax paid reduced to the minimum. A clued-up financial adviser knows the strategies available to help you optimise your financial situation and reach your personal goals sooner.

However, you’re probably wondering how the government views this? 

According to the Australian Taxation Office (ATO), “you have the right to arrange your financial affairs to keep your tax to a minimum.” In other words, there is a difference between legitimate, tax-effective planning and unlawful tax avoidance.

How about structuring your investments using tax planning?

Consider a few examples of tax planning for investing:

  • Using fully-franked dividends
  • Additional personal contributions to super before tax, where your money is taxed at 15% instead of your marginal tax rate
  • Using a ‘buy and hold’ strategy

Let’s think about that last option. 

If you sold shares you owned within twelve months of purchase, you could be liable for Capital Gains Tax (CGT) on the whole amount of capital gain at your marginal tax rate. If you sold shares after twelve months, you may receive a 50% reduction in CGT payable. To maximize tax savings, what should you consider for your situation?

What is our process?

Everything starts with discovery. We get to know you, determine your goals and objectives and then find the solutions. Reviewing your plan is also important. 

Tax planning services are aligned to financial planning advice. If specific tax advice is necessary to be given by a tax agent, we can connect you with a professional in our network as part of our bespoke service offering.

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Businesses

“When it comes to correct structure, one size does not fit all and this is where the guidance of an expert can prove invaluable.”

Businesses

Early on, a key decision that a business owner needs to make centres around the structure. While there are several options to choose from – such as a company, trust, sole proprietorship or partnership – an entrepreneur needs to weigh up various factors during the set-up stages. These can include costs, tax and legal obligations, responsibilities and even the nature and size of the business itself.

When it comes to correct structure, one size does not fit all and this is where the guidance of an expert can prove invaluable. 

As your business grows, you as the owner will want to keep a close eye on its profitability and sustainability. Our team assists with critical elements of financial analysis, including profit and loss and can keep you focused on the direction that you choose to steer your business.

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Trusts

“An effective way to structure asset protection and to ensure tax efficient income streaming, with the goal of protecting intergenerational wealth transfer or forming part of an entrepreneur’s business exit plan.”

Trusts

A trust is a legal arrangement where one party, known as the trustee, holds and manages assets for the benefit of another party, called the beneficiaries. Trusts are commonly used for various purposes, including investment, estate planning, and business operations.

They can be an effective way to structure asset protection and to ensure tax efficient income streaming, with the goal of protecting intergenerational wealth transfer or forming part of an entrepreneur’s business exit plan.   

Our professionals most commonly work with discretionary trusts, as well as unit trusts depending on the circumstances, and are arranged in consultation with your accountant. Reach out to our team to explore whether any of these could work for you.

How are trusts taxed in Australia?

Trusts are treated as separate entities for tax purposes. The trustee is responsible for managing the trust’s tax affairs, including lodging tax returns and paying any tax liabilities. Generally, the beneficiaries are taxed on their share of the trust’s net income, regardless of whether the income is distributed to them.

Trusts offer flexibility and can be tailored to meet specific needs, making them a popular choice for managing and protecting assets.

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Self-Managed Super Fund (SMSF)

“It’s hands on, but it ultimately allows you to fully take charge of your retirement planning with a structure that puts you in the driver’s seat.”

Self-Managed Super Fund (SMSF)

Why consider a Self-Managed Superannuation Fund (SMSF)?

Creating your own SMSF can be a very useful tool for business owners and individuals wanting more control over their investments. It’s hands on, but it ultimately allows you to fully take charge of your retirement planning with a structure that puts you in the driver’s seat.

If you are a business owner, an SMSF opens up the opportunity for owning your business premises inside your SMSF, allowing you to increase the balance by renting your premises directly from the fund. 

Another advantage of holding property inside an SMSF is the Capital Gains Tax (CGT) planning that is available under current legislation.

From an estate planning perspective, SMSFs can be used effectively to deal with the very complex areas of tax planning after a member passes away.

Fast facts about SMSFs:

  1. No more than 4 members
  2. Each member is a trustee (or director, if a corporate trustee)
  3. Regulated by the ATO
  4. Complying funds are eligible to receive concessional tax treatment

Is this right for me?

While there are many benefits that may enhance your financial situation, there are also some key responsibilities you wouldn’t want to neglect. Whatever your need, seek advice in this area and let us help you navigate the risks and rewards.   

Contact us if you would like to consult one of our specialists to explore the possibilities.

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