A self managed super fund (SMSF) is a superannuation trust structure that provides benefits to its members upon retirement. The main difference between SMSFs and other super funds is that SMSF members are also the trustees of the fund. The advantages of establishing a family SMSF are: Tax savings – 0% on…
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In a typical husband and wife tradepeople partnership, one partner is qualified (for example an electrician) and produces the partnership income and the other partner may be involved in administration for the partnership. Profits from the partnership are normally split 50/50 between the partners. This structure was reviewed by the ATO in 2005 in…
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PAYG variations are attractive to taxpayers who have negatively geared investments (such as rental properties or share portfolios), and receive large tax refunds when lodging their annual tax returns. This strategy involves lodging a PAYG variation with the ATO in July of each financial year to bring forward the tax benefit. Once the PAYG variation…
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Reducing space usage and relocating to smaller premises will reduce rent costs (where the new premises have a similar cost per metre as the current premises). Businesses can reduce the space they use by: Going 100% paperless – documents and files are scanned and archived online instead of being stored as paper files…
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Mortgage offset accounts are savings accounts that are structured so your savings balance in the account is offset against your home loan account. The advantages of mortgage offset accounts compared to normal savings accounts are: The mortgage offset account balance reduces the interest payable on the home loan account. As no interest…
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If you have unused space, subleasing part of your business premises to a third party is a great short-term strategy to reduce some of your fixed costs. This will reduce your rent expense and provide extra cash flow. Subleasing typically makes sense when: Business conditions are tough – this reduces your overheads and…
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Bitcoins most important characteristic is that it is decentralised so no single institution controls the Bitcoin network. Bitcoin is pseudonymous, meaning that funds are not tied to real-world entities but rather bitcoin addresses. Owners of bitcoin addresses are not explicitly identified, but all transactions on the blockchain are public. Bitcoin has been called a tax…
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This strategy is all about changing bad debt into good debt. Bad debt is defined as debts which don't help you build wealth and where the interest expense is non-deductible. This includes personal credit card debts, personal loans, HECS debts, primary residence home loans, etc. In contrast, good debt is debt which works to help…
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A partnership involves two or more partners (people or entities) carrying on a business together with a view to profit. Partnerships are governed by the Partnership Act of the state or territory in which the partnership was formed, and are limited to a maximum of 20 partners. Partnerships have the following advantages: It's…
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This strategy involves asking the landlord for a rent reduction. Landlords will be more open to reducing the rent where: You are a good tenant that pays their rent on time and doesn't cause any trouble. Falling rents and increased vacancy rates means you are paying above-market rental rates. Implementation process: Use property websites…
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"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2