The most common structure is a company’s discretionary trust. A discretionary trust provides you with the ability to distribute your profit to your beneficiaries in order to achieve the lowest average tax rate among said beneficiaries.

Note that, if you are a small business, adapting a company structure will yield a lower tax rate of 28.5% instead of the usual 30%.

A trust-particularly discretionary trust-allows the trustee to distribute the profit to their beneficiaries at the company’s discretion. This creates an opportunity for your organization to utilise all eligible beneficiaries’ tax positions, which could potentially lower the overall average tax rate for the group.

A trust also generally triggers access to the 50% CGT discount for gains made on the disposal of capital assets if the capital assets were held by the trust for over 12 months. By comparison, a company without a trust in place will not be eligible for such a discount, regardless of how long the company held the assets in question.

Sadly, there are no one-size-fits-all legal tax strategies. As a business professional, you should always understand the inherent advantages and disadvantages of the type of tax structure you’ve chosen. You should also make it a priority to understand the tax concessions that may be available to your organization.

Tax minimisation or tax planning is usually defined as the organization of one’s financial affairs in such a way that they are tax efficient as possible. Tax avoidance, on the other hand, is a deliberate exploitation of the tax system.

Tax minimisation refers to the act of trying to reduce your company’s tax payable amount via allowable deductions, tax concessions, and acceptable accounting or the tax treatment of various transactions. The end goal is to achieve a minimum tax for the taxpayer.

Tax avoidance involves engaging in actions or schemes that create financial and tax benefits not intended by law.

First: do not ignore the debt. Instead, consult with a professional immediately to assess your financial situation. In addition, be sure to thoroughly review your accounting and taxation recordkeeping processes as well as your cash flow position. Next, start preparing a repayment plan to propose to the ATO.

Bear in mind, communication with the ATO is vital. Keep communication channels open and update the ATO on your progress as regularly as possible. In the ATO’s eyes, efforts to address the debt will be far more beneficial to your business in the long run.

Most often, you are only eligible if you can demonstrate serious hardship. This means that you would have to prove that payment of your debt would leave you unable to provide food, accommodation, clothing, medical treatment, education, or other necessities for yourself, your family, or for other dependents. If this is the case for you and your business, you will need to apply to the ATO for relief. Such relief is granted on a case-by-case basis.

The ATO will accept weekly, fortnightly and monthly repayments (in addition to a 20-30% upfront lump sum). Such plans are usually required to be paid off within 12 months of the arrangement.

Yes. Rates are currently at 8.76% per year.