Tax planning strategy 186 A holding company is a parent corporation that owns enough voting shares in another company to control its policies and management. A holding company exists for the sole purpose of controlling one or several other companies. Holding companies also exist for the purpose of owning property such as real estate, patents,…
Tax planning strategy 188 A Child Maintenance Trust (CMT) is a special type of trust set up and established with income earning assets (typically shares or property) to provide support for a child (or children). Under the CMT deed the capital assets can only be distributed to the children for whose benefit the trust was…
This strategy is ideal for taxpayers who meet two criteria: They own a company with a franking account surplus (normally as the result of profits from operating a business or investments, the company paying tax and retaining those profits). The taxpayers (shareholders in the company) currently have nil or low taxable incomes (normally due to…
Tax planning strategy 183 The Australian Bureau of Statistics advises that Australia’s population has grown to 24,274,575 (as at 17th November 2016). The overall total population is increasing at the rate of one person every 1 minute and 29 seconds as the result of: One birth every 1 minute and 44 seconds. One death every…
Tax planning strategy 184 This strategy involves a SMSF investing in non-controlled unit trusts or companies. As the entities are non-controlled entities they can operate businesses, be geared, and invest without breaching the SIS legislation. This structure allows multiple unrelated SMSFs to invest in these entities and have the trust distributions, dividends, and capital gains…
Tax planning strategy 181 Australia now has over 570,000 self-managed super funds (SMSFs) that hold $600 billion of investments. The ‘average’ super fund now has a balance of over $1 million, although 45% of funds have less than $500,000 of assets. The SMSF segment is fast growing and now accounts for 29.1% of the…
Tax planning strategy 182 The central feature of a tax haven is that its laws and other measures can be used to evade or avoid the tax laws or regulations of other jurisdictions. Although there is no universally accepted definition of tax havens the following characteristics are indicative of it: No or nominal taxes.…
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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"
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