Achieving Financial Freedom!

Monthly Archives: April 2017

Trust Distributions – Who can you distribute to?

If you are a small business who uses a Trust, there are a number of people that you can distribute to with a Discretionary Trust. These include: – Children
– Parents
– Parents-in-law
– Brothers & Sisters
– Grandparents
– Grandchildren Children & Grandchildren You can distribute only $416 to children who are minors. That might not seem like a lot, but if you have 3 children and you are in the 49% tax rate, that works to being $611.52 in tax savings. If you have children who are over 18 and are studying at uni or are not really earning an income, you can distribute up to $20,542 and they will not pay any tax. At the 49% tax rate, that is $10,066 in tax savings. If we increase that to $37,000, they will have to pay $3,456 in tax and your net tax savings will be $14,674. Brothers & Sisters If you have brothers and sisters who are studying at uni or are not really earning an income, you can also distribute to them in a similar fashion as above. Just make sure no one else is doing the same thing!! Parents, Parents-in-law & Grandparents If you have parents, parents-in-law and/or grandparents who are self-funded, you might be able to distribute to them in a tax effective manner. How do you take advantage of this? You need to have a Discretionary Trust with income, and you need to be a small business. FAQ’s Do I need to pay the distribution? Yes, you will need to pay the distribution. What if they receive Centrelink? If who you are looking to distribute to, receives Centrelink, then this strategy is unlikely to work for you.

Tax Planning 2017 – It Starts NOW!

What would you do with an extra $10,000? On average, we save more than this for our small business clients every year in tax. The reason we are able to do this, is because we help them plan ahead before the 30th June. Last year, we were able to help our clients save over $1M in tax. So, over the coming weeks, we will be listing a number of strategies to help you reduce your tax legally. Why? If you leave your tax planning until the end of June, quite frankly there may not be enough time to do anything significant to legally reduce your tax.
So for 2017, start planning ahead to save tax. How to do the planning to save tax with PCR’s help? Our process works as follows:
First of all, we request details of your expected income and business profits for the 2017 tax year (1 July 2016 to 30 June 2017). This includes all wages / employment income, interest and dividends and rental income received, business profits / losses, and any capital gains / losses you expect to make. Based on this information, we estimate your taxable income and your tax payable BEFORE any tax planning strategies. For example, we may calculate (based on your information) that you may have a taxable income of $100,000 for 2017. Secondly, we discuss all of your tax planning options. Some of these may be things to do in your business, and some of these may be investment / wealth creation options. Thirdly, we provide you with a report that explains, in plain English, the tax planning strategies we recommend and exactly how much tax you will save. Finally, we provide you with an easy-to-follow Action Plan to ensure that both you and us can do everything that needs to be actioned before 30th June. So, over the next few weeks, keep an eye out for our tax planning strategies that can help you save big and save more for your family’s wealth creation.