Transactions a family trust should not enter into
Family trusts are used extensively in the SME market as a business or investment vehicle to accumulate wealth and to make distributions in a tax-effective way to beneficiaries.
Although most trusts are used appropriately (i.e. not for tax avoidance purposes), and may not necessarily trigger a full-scale ATO review or audit, the ATO is particularly concerned about trusts that have:
- not lodged tax returns or activity statements;
- offshore dealings with low tax jurisdictions; or
- entered agreements with no commercial basis or very complex sham transactions (e.g. where the economic benefits flow to a beneficiary on a higher marginal tax rate while tax on such a transaction is paid by a beneficiary on a lower marginal tax rate).
Because trust taxation is a very complex area of our tax law, please come and speak to us if you are thinking of entering a trust arrangement or are already using trusts in your business. Getting professional advice is a prerequisite when dealing with trust arrangements.
Healthcare practitioners operating from healthcare centres
Many healthcare practitioners (e.g. doctors, dentists, radiologist or pharmacists) do work for independent 3rd party healthcare operators that provide consulting rooms and administrative services to such healthcare practitioners to enable them to provide healthcare services to patients.In return, the medical centre pays the healthcare practitioners a lumpsum for working a minimum amount of hours at these medical centres.There is no partnership or employment agreement between such medical centres and the healthcare practitioners.
According to the ATO, such lumpsum payments will be assessable ordinary income for the healthcare practitioners because such payments will either be for an inducement to enter a service agreement or will be the payments of profits or gains from isolated transactions.These lumpsums will not be taxed on capital account.
If you are a healthcare professional, please speak to our Nexia team who will be able to assist you with your consulting arrangement.
We can help you lodge your tax return
Broadly, individuals must lodge tax returns if they are Australian residents for tax purposes and have taxable income of more than $18,200.
Individuals with income below $18,200 must lodge tax returns if they:
- Paid tax under the PAYG withholding or instalment system or had tax withheld from payments made to the individual;
- Had reportable fringe benefits amounts or employer superannuation contributions on their PAYG payment summary;
- Made a loss or claimed a loss from a previous year;
- Had exempt foreign employment income but some Australian income;
- Are entitled to the private health insurance rebate but did not claim the correct entitlement as a premium reduction; or
- Were a liable or recipient parent under a child support assessment for the whole year and their income was less than $24,154.
Please contact us is you need assistance in lodging your tax returns so that our dedicated professionals can assist you.