Sally Preston

Are you an Australian tax resident? Are you sure?

As tax specialists, we are often asked to consider whether an individual should be treated as a tax resident of Australia. Particularly when an Australian moves overseas to take up a job in another country.

Why is this an important question? Well Australian tax residents are taxed in Australia on their worldwide income. If the person is not a resident of Australia, then they are only taxed on Australian sourced income. So, it can have an important impact on Australian tax reporting requirements and ultimately the amount of tax paid – both in Australia and overseas.

In this article, we will give you an overview of the law, plus the ATO view on the interpretation of the law as well as some examples.

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Sally Preston 

Strategic tax planning Pt 1

Tax planning at the end of the financial year is important but what about longer term? 

One of the most crucial yet overlooked aspects of financial management is long-term tax planning. It may just be your secret to both saving money come tax time and giving you that financial edge over your competition. This will be different for business owners than for individual salary and wage earners but there is also a lot of overlap as profits from a business ultimately end up in the hands of individuals.

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Sally Preston

Mastering business budgeting and forecasting

Toward the end of financial year is the time of year to start looking ahead to the next financial year and working on your business budget.

When setting a budget, it is not often as simple as rolling forward last year's data and adding 5%.

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Sally Preston

Personal services income - are you treating yours correctly?

Do you earn income, either directly or through your business structure, that you generate mainly from your efforts and skill? This type of income is called Personal Services Income" ("PSI") and if this is you, then you need to keep reading.

Who may earn this type of income? Well, an accountant, lawyer, doctor, financial planner, management consultant, business coach, electrician, architect, and so on. 

“PSI is defined as income that is mainly a reward for an individual's personal efforts or skills (or would mainly be such a reward if it was the income of the individual).”

It is worth noting that only individuals can have PSI. It can be earned directly by a sole trader or indirectly through an interposed entity (Personal Services Entity or "PSE").

Did you know that there are laws in place that prevent individuals from reducing their tax by diverting the income generated to an interposed entity such as a company, partnership, or trust? The laws also restrict the deductions that are available to claim against the income.

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Sally Preston

Things you need to know about your trust

Many business structures include trusts in them - discretionary trusts, unit trusts, maybe even a hybrid trust or bare trust. 

But what is a trust, how does it work, and what do you need to know about your trust?

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Sally Preston

Things you need to know about your company and its profits

Many Australian businesses have a company in their structure. It may be the entity running the business, it may be as the trustee of a trust, it may even act as the partner in a partnership.

In many cases, this company will be a “private” company. That is, it is not listed on a stock exchange.

If this is you, do you have a good understanding of tax on company profits and the key tax issues you need to be aware of?

This article will explore some of these topics just to check on your understanding and hopefully provide you with some valuable information.

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Sally Preston

Tax on subdivision and sale of land

We often see people either acquiring large blocks of land or converting their large blocks of land into a new development. In some cases, the bare minimum is done to meet council approval for a subdivision, in other cases further steps are taken and property developers and architects are engaged to fully develop the land for sale.

The real question to ask in these scenarios is whether there is any income tax, GST and/or duty on any of the transactions involved. Read More

Sally Preston

Taxation of "side hustles"

It is becoming more common for Australians to take on a second job or start a new venture or small business to make some extra money. This is often referred to as a “side hustle”.

If this is you, then this article unpacks the tax consequences of this for you. It will answer the following questions:

1.       Do I pay income tax on my profits/income? 

2.       If I make a loss from my business, can this reduce my other sources of income (such as salary and wages)?

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Sally Preston

Expanding your business overseas - 5 tax questions you should ask first

As new global markets provide infinite opportunities to expand and grow, businesses face both challenges and opportunities. In this article, we focus on the tax considerations of expanding internationally. Now we will not be providing you with a comprehensive guide (as that would be a whole book!) but instead break it down into some key questions you should seek help with before entering the market.

Whilst this should not of itself deter your expansion plans, it is potentially one of the largest costs and risks to your international expansion if not carefully planned.

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