Tax Structuring.

Tax structuring, also known as tax-efficient structuring, refers to the arrangement of a person's or business's financial and business affairs in such a way as to minimize tax liabilities within the boundaries of the law. In Australia, this is an integral part of financial planning due to the complexities and potential benefits involved. Here's what it may involve:

1. Business Structure: The type of structure you choose for your business—whether it's a sole proprietorship, partnership, company, or trust—can have significant tax implications. Different structures have different tax rates, distributions, and liabilities, so it's crucial to choose the one that is the most tax-efficient for your specific circumstances.

2. Capital Gains Tax (CGT): Tax structuring can help minimize the impact of CGT. For example, structuring might involve timing the disposal of assets to align with CGT concessions or exemptions.

3. Income Splitting: Depending on your business structure, you might be able to split income among family members in lower tax brackets. This must be done in compliance with tax laws to avoid 'income splitting' penalties.

4. Superannuation: Structuring your superannuation contributions and investments in a tax-efficient manner can result in significant tax savings over the long term.

5. International Taxation: If you're doing business internationally or have overseas investments, tax structuring can help you take advantage of double taxation agreements and avoid being taxed twice on the same income.

6. Estate Planning: Structuring your estate in a tax-efficient way can minimize the tax liabilities for your beneficiaries. This might involve making use of concessions and exemptions, or setting up trusts.

7. Fringe Benefits Tax (FBT): Providing certain benefits to employees can attract FBT. Structuring these benefits in a tax-efficient manner can reduce this tax liability.

8. GST Management: Structuring your transactions and record-keeping in a way that makes it easier to calculate and report Goods and Services Tax (GST) can save you time and help you avoid mistakes.

It's important to remember that tax structuring should always be done in compliance with tax laws. While it's legitimate to arrange your affairs in a tax-efficient manner, tax evasion is illegal. For this reason, it's recommended to seek our advice or your accountant’s when undertaking tax structuring.

How We Can Help

  • We can help determine the best business structure (sole trader, partnership, company, or trust) for your needs, considering factors such as tax rates, flexibility, liability, and ease of operation.

  • We can provide advice on managing and timing asset disposals to minimise CGT, and guide you on specific concessions and exemptions.

  • We can help set up appropriate structures for legal income splitting, where permissible.

    This could involve the use of family trusts or other arrangements, and can significantly reduce the overall family tax burden.

  • We can provide advice on optimizing superannuation contributions and investments for tax efficiency, including the use of self-managed super funds (SMSFs) where appropriate.

  • For those operating or investing overseas, a tax lawyer can provide advice on international tax issues. This can include managing double tax agreements, foreign tax credits, and structuring investments for tax efficiency.

  • We can assist in structuring your estate to minimize tax implications for your beneficiaries, such as advising on testamentary trusts and other estate planning tools.

  • Perhaps most importantly, as tax lawyers, we ensure all planning and structuring activities are fully compliant with Australian tax laws, helping you avoid penalties and potential legal issues.

  • If disputes arise with the ATO, as tax lawyers, we can represent you by providing assistance and advice throughout the dispute resolution process.