Business Structure
7 October 2021
Choosing the right business structure can not only have the benefit of asset protection and the flexibility to expand and bring on new partners it can also save you tax.
I want to run you through a common scenario I often come across where the business is run as a sole trader and how restructuring your business to operate through a family trust can save you $15,000 in tax.
Scenario One
Jim operates his carpentry business as a sole trader
Has a partner is at home looking after the kids and not working
Business taxable income $180,000
On lodgement of their tax returns they pay tax of $55,000
Scenario Two
Jim operates his carpentry business through a family trust
Has a partner is at home looking after the kids and not working
Business taxable income $180,000
Has the ability to split the business income between him and his partner
On lodgement of their tax returns they pay tax of $40,000
If you would like to know more about this, please feel free to contact Hurley Accounting Solutions and we can advise if such a business structure suits you.
