Q. I read your recent comments regarding some of the tax differences between operating a business through a company or trust structure. We use a family trust and a friend has told me it is important to distribute the trust income at the end of each year. Can you clarify what he is talking about?
A. I assume your family trust is a discretionary trust. Subject to the terms of the trust deed this should allow the trustee to decide each year who they are going to appoint the income to. This creates the flexibility of income distribution that we spoke about last week. Once the trustee has resolved who will be entitled to the income of the trust, then that person or entity is taxed on that share of the income.
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Tags: discretionary trust | Tax & accounting compliance | Tax strategy and structuring | Trust income | Trusts
Posted in Business Scruples (Q&As), Export |
Ever noticed that Christmas – the lead up to it and the event itself – is getting longer? The week after Father’s Day the major retailers started putting up their Christmas decorations. For retailers and the hospitality industry, this can be a good thing. It gets people thinking that the end of the year is almost here; Christmas presents, planning parties, entertaining and fixing up the house, all come to mind with the share of the consumer’s wallet following.
For every other business, it can trigger delays with customers unwilling to commit to decisions until the New Year. Depending on your customer base, Christmas, New Year, and the end of the financial year are generally all critical points in the consumer psyche. It’s the time when people are making decisions about what to spend, what to cut back on, and what can simply wait until they return from holidays. Every good marketing plan should factor in these realities and implement accordingly. If the time to acquire each sale is slowing down, give your market an incentive to commit now or lay a firm foundation for the New Year.
For further information about Hayes Knight’s business planning services, click here.
Posted in Business Insight, Infotelligence |
Ever wondered why you’re the only ‘normal’ one at your office? Better understanding your behavioural profile, those of your colleagues and customers can help break down communication barriers and help you achieve results. It also helps overcome that feeling that everyone else around you is obviously completely insane!
The DISC model looks at a person’s natural behavioural style and the way they approach the world around them. Using the psychological theories of Carl Jung, William Moulton-Marston defined the four dimensional behavioural map (or DISC).
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Posted in Business Insight, Infotelligence, Uncategorized |
Q. We commenced our business about 3 years ago. It has been growing steadily and our turnover should pass through the $2 million mark this year. A number of my friends have suggested that we are better to stay below this level for tax reasons. Are the advantages such that we should limit our present growth path?
A. It is generally not a good idea to make business decisions simply based on tax reasons. Tax should be considered in the same way as any other business expense. You should try and reduce it legally to its lowest point, but don’t let it influence the development of your business.
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Tags: CGT Small business concessions | Tax strategy and structuring
Posted in Business Scruples (Q&As), Export |
Q. We are expanding our business and looking at what will be the best operating structure for the future. Our decision is between a company or a family trust. Is one clearly better than the other for tax purposes?
A. Companies and trusts are both commonly used structures. One is not necessarily better than the other. They are different. Often the choice of the right business structure will come down to your plans for the business and its future.
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Tags: Family Trust | Tax strategy and structuring
Posted in Business Scruples (Q&As), Export |
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