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  • #995654
    jonnycool
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    Can anyone provide feedback on this idea and any hurdles that may be ‘showstoppers’?

    I am a electrician in my late 40’s who has a broad range of management and DIY skills.
    My wife and I have some experience in buying and renovating property.

    I am looking at getting my Electrical Contracting Licence (primary business) and then within that structure, buy renovate and sell residential property.

    I would envisage operating as a sole trader, working 30hrs a week as a sparky, and the remaining on the reno (hands on + managing other trades).

    With my project management diploma and trade background, I have the labour sorted :)
    Just after advise on the business/tax/legal side.

    My research suggests as a sole trading electrical contractor, any profits on the sale of the property would be added in my annual tax return as earnings with any profits from the electrical business?

    Any advise would be greatly appreciated.

    #1203249
    Lisa Crocker
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    Hi Jonnycool,

    Welcome to the forums! It sounds like exciting times are ahead. Hopefully some of our members will be able to help out with some tips.

    All the best,
    Lisa

    #1203250
    Taxopia
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    • Total posts: 301
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    jonnycool, post: 241026, member: 87789 wrote:
    Can anyone provide feedback on this idea and any hurdles that may be ‘showstoppers’?

    I am a electrician in my late 40’s who has a broad range of management and DIY skills.
    My wife and I have some experience in buying and renovating property.

    I am looking at getting my Electrical Contracting Licence (primary business) and then within that structure, buy renovate and sell residential property.

    I would envisage operating as a sole trader, working 30hrs a week as a sparky, and the remaining on the reno (hands on + managing other trades).

    With my project management diploma and trade background, I have the labour sorted :)
    Just after advise on the business/tax/legal side.

    My research suggests as a sole trading electrical contractor, any profits on the sale of the property would be added in my annual tax return as earnings with any profits from the electrical business?

    Any advise would be greatly appreciated.

    Hi There. If you operate the business as a sole trader and also generate profits from other investment activities (like property renovation) then yes, those profits or capital gains will be included in your personal return to the extent that you are partner in them.

    A lot of people get carried away with more complex structures but its important to really consider the benefits before say starting a company. In your case I could see a company offering some good asset protection if something went wrong in the electrical business. Its sort of like another form of insurance.

    Cheers Alex

    #1203251
    akagrp
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    • Total posts: 315
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    Hello

    As Alex noted important to review what your plans are for both the property and electrical business. Important to note from a Tax Perspective the buying, renovating and selling is likely to be seen as Income Generating activity and as such tax will be payable on all profits, no concessions

    I suggest you go through these questions and discuss answers with your advisors to determine most tax effective options for you. (please note these are questions are just starting questions, your advisors will likely have more before final recommendation)

    1. Estimated profit from my electrical business
    2. How much of my own money will I be putting towards property
    3. How much will I be borrowing for property/renovations
    4. Will I keep for rent or sell property
    5. How much does my wife earn in a year
    6. Ideally I want to buy/renovate X properties a year

    There are also GST implications you will need to consider.

    The above is not to be interpreted as advice but general in naturer

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