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  • #1228778
    nikkitdp
    Participant
    • Total posts: 2

    so i have a company that has made good profit maybe 600k this year. i already payroll myself 150k from the company. i have a trust too – its empty atm. what shoudl i do ..i mean i want to buy a new house and not have a big home loan. i know i need tax planning advice but i do wonder what your thoughts are here on 2 things:
    1. pay myself dividends and higher tax?
    2. leave money in company or transfer to trust to pay myself?

    i guess it sounds like its all income at end of day and i cant escape paying 47% tax?

    so how did kerry packer never pay tax!!??

    #1228798
    James Millar
    Participant
    • Total posts: 1,703

    what did your accountant suggest?

    Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900
    #1228805
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,183

    Hi and welcome to Flying Solo.

    There are some actions you can take to structure your affairs in a tax beneficial way – @jamesmillar does this for his clients daily.

    Good luck with your quest – it is a good problem to have!!

    Cheers
    Paul

    #1228862
    nikkitdp
    Participant
    • Total posts: 2

    Well you know what whist it is a good problem I also find it incredibly stressful running a business and I do wish ato realised what business owners go thru. I never sleep at night and recently I’ve been learning as much as I can about tax and finances . Should be a course for every business owner that is mandatory 🙏

    My accountant He is thinking I move not all But most profits from company to the trust and use this towards a home loan again . The new home will take a Home loan with trust . Also I depreciated my car for last year too so that was a 59k saving .

    But I’m still stuck with big tax bill. I have one child under 10 so what are other ways to get this tax down ?

    Secondly what do companies do with profits ? I can’t buy anything I have a software company . My brother bought assets but his a builder so what are my options ?

    James pls let me know your thoughts 🙏🙏🙏🙏

    #1228870
    Jason Ramage
    Participant
    • Total posts: 3,165

    James pls let me know your thoughts 🙏🙏🙏🙏

    Sounds like it may pay to put a decent accountant on your payroll that you trust with this sort of stuff.. only saying this as a: its a good chunk of coin and b: you are already second guessing or not getting enough advice from your existing guy/gal as you are on a forum asking…

    Maybe @jamesmillar might be able to help you structure, and whatever it costs you might save you in tax + you can also claim it as an additional expense next year 🙂

    Jason Ramage | Lucas Arthur Pty Ltd | E: hello@lucasarthur.net.au   P: 61 3 8324 0344    M: 61 412 244 888
    #1228873
    James Millar
    Participant
    • Total posts: 1,703

    Well you know what whist it is a good problem I also find it incredibly stressful running a business and I do wish ato realised what business owners go thru. I never sleep at night and recently I’ve been learning as much as I can about tax and finances . Should be a course for every business owner that is mandatory 🙏

    My accountant He is thinking I move not all But most profits from company to the trust and use this towards a home loan again . The new home will take a Home loan with trust . Also I depreciated my car for last year too so that was a 59k saving .

    But I’m still stuck with big tax bill. I have one child under 10 so what are other ways to get this tax down ?

    Secondly what do companies do with profits ? I can’t buy anything I have a software company . My brother bought assets but his a builder so what are my options ?

    James pls let me know your thoughts 🙏🙏🙏🙏

    Well, it sounds like you are working hard and getting great results, making lots of money and paying lots of tax. It also sounds like you are adding to that workload by spending precious limited time (parenting time or business time) on trying to develop tax knowledge that you will never master to an expert standard required for tax planning (because it would take decades that I presume you don’t have). Learning finance fundamentals is great and having some tax knowledge is helpful but frankly for a successful business person that’s where it should end. You could hire the best advisers in Australia and they will solve it for you with no distraction.

    I’m not sure what you mean by “moving” profits to a trust but I am hoping you do not mean dividends (if indeed that trust is a shareholder). If you mean lending then it will be subject to Division 7A with interest at that rate. If it’s an investment property it can work because the interest is deductible but for a home loan (your home), it’s not suited. Not to mention the fact that you would probably forgo main residence exemption and probably pay land tax in the trust at the premium rate. So probably a fail.

    For someone making the profits that you are making I’m very surprised you are asking for advice on an internet forum. In my experience, anyone making that sort of profit is smart enough to realise that their time is better spent elsewhere and that free tax advice from the internet is not going to help them. You need to hire and pay for a top accountant. They will devise a short, medium, and long-term plan for you that will consider tax optimisation and your personal goals. That is my advice. That way your $600k profit will become $800k because you aren’t wasting time on non-core activities.

    Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900
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