Today sees the wrap up of our “Your Structure” series…I’ve even tied it with a pretty bow!

I do hope that over the past couple of weeks you’ve been able to see some of the differences in the types of structures available for operating a business and/or holding investments – and you’ve questioned yourself and your knowledge of your own structure.

To recap, if you missed any of the posts, here they are:

1. What’s my structure?

2. Your structure – the sole trader

3. Your structure – partnership

4. Your structure – company

5. Your structure – trusts

6. Your structure – superannuation funds

7. Your structure – common mistakes

One of the easiest ways to remember your structure is to prepare a diagram of it – I really encourage you to do this – I can even help if you need!

Regards

As we come to the end of our “Your Structure” series, I thought I’d take a moment to hi-light two common mistakes I have come across in my travels…

Before I do that though, please don’t be offended if you have found yourself in one of these situations – the mere fact that you were asking questions is great, and it’s always the intention of The Tax Chic to educate and get you thinking about things:

1. Your business name is not your company

A business name can be registered by any sole proprietor, partnership, company or trust who operates a business – however many business owners confuse their business name with being a company name, and this is incorrect.

A business name can easily be deregistered and a new name registered – a change in business name does not have an impact on the underlying structure of the trading entity – as such a change in business name cannot be used as means to avoid liability.

2. Your trust is not a company

A trust is a separate entity which has a trustee.  This trustee can be an individual or a company – but often in the case of a corporate trustee, business owners confuse the two and think that their company is running the business.

Most likely the confusion results from the fact that the trustee holds assets and makes decisions on behalf of the trust – but the trust is the entity reporting the income for tax purposes.

If you’re still confused…it’s OK – complete the Contact page and I’m sure I can help sort you out!

PS For LS, here is the mention of my “magic 5 iron” from golf yesterday!!!

Regards

By virtue of my curious mind…I’m always on the lookout for things to do – particularly things that might seem a little out of the ordinary…

Last weekend I attended a book event at the Warrnambool and District Historical Society where Bronwen Hickman was in attendance to provide an insight into her new book.

Bronwen is a Melbourne writer, historian and teacher and has been researching the life of Mary Gaunt for approximately 20 years – her research saw her follow in Mary’s footsteps across the world as best she could.

The recently released book “Mary Gaunt – Independent Colonial Woman”, tells the story of Mary Gaunt, including some information from her unpublished autobiography – I was delighted to hear Bronwen speak of her findings at this event.

Mary Gaunt was a woman of the colonial era – born in the Victorian Goldfields in 1861; she was well educated, well connected…and a rebel!  As one of the first women to attend the University of Melbourne, she wrote articles and stories in order to fund her travels – her solo travels (can you see why I was drawn to attend this event?)

Of further interest though, was the fact that Mary lived in Warrnambool for some time where she was married to the Honorary Medical Officer at Warrnambool Hospital – Dr Miller.  Unfortunately it was Dr Miller’s health concerns which saw them leave Warrnambool – and his subsequent death was the catalyst for Mary venturing out to travel the world.

I’ve only just started to read the book myself, so I can’t make any recommendations as yet, but if you are interested you can purchase a copy through Melbourne Books.

And yes, Bronwen and I had a good chat about the perils of being “Bronwen with an e”…

Regards

In the previous posts of our “Structure” series, we have discussed the entities which can be used for operating your business activities.

All of those entities can also be used for general investing activities, but one of the most tax effective ways of holding investments is through a superannuation fund.

There are a number of types of superannuation funds, but the most common are:

• retail and industry superannuation funds
• self-managed superannuation funds

The benefits of holding investments in a superannuation fund include:

• the income earned by investments is taxed at a low rate of 15%
• investment income is tax free when in “pension phase”
• there is a possibility of an individual making deductible contributions to the superannuation fund, which may be tax effective

Disadvantages of holding investments in a superannuation fund include:

• self-managed superannuation funds are expensive to establish and maintain
• the individual may have little or no say in the investments made by a retail or industry fund
• the investments belong to the superannuation fund and should not be used by the individual
• investments in superannuation funds (and their proceeds), are not readily accessible as they are required to be held until preservation

The laws regarding superannuation are varied and complex – please note: you should consult a superannuation specialist before establishing a self-managed superannuation fund or before making any significant superannuation investments, you should also consult a licensed financial planner to assist with your investments – I can provide referrals if you need to know who to talk to!

Regards