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AJML GROUP PTY LTD AND RELATED ENTITIES ◊ AJML TAX SERVICES PTY LTD ◊ AJML BUSINESS SERVICES PTY LTD

Tax Planning with Alan Liang Registered Tax Agent, CPA, B. Bus (Acc. & Mk.). ACCOUNTING ● TAXATION ● BOOKKEEPING ● COMPANY FORMATION ● TRUST FORMATION ● BUSINESS ADVISORY ● TAX PLANNING ● MANAGEMENT REPORTING ● SELF MANAGED SUPER FUND.

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AJML GROUP PTY LTD AND RELATED ENTITIES ◊ AJML TAX SERVICES PTY LTD ◊ AJML BUSINESS SERVICES PTY LTD

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  1. Tax Planning with Alan Liang Registered Tax Agent, CPA, B. Bus (Acc. & Mk.) ACCOUNTING ● TAXATION ● BOOKKEEPING ● COMPANY FORMATION ● TRUST FORMATION ● BUSINESS ADVISORY ● TAX PLANNING ● MANAGEMENT REPORTING ● SELF MANAGED SUPER FUND AJML GROUP PTY LTD AND RELATED ENTITIES ◊ AJML TAX SERVICES PTY LTD ◊ AJML BUSINESS SERVICES PTY LTD

  2. What does AJML offer? We help small businesses and individuals with their: • Accounting • Taxation • Tax planning • Bookkeeping • Company formation • Trust formation • Self managed super funds • Management reporting • Business advisory

  3. What is tax planning? Tax planning is a generic term that embraces all the ways in which taxpayers plan to reduce their tax liabilities without engaging in tax evasion, including using different structures.

  4. What is tax liability? The two main taxes • Income tax • The term “income tax” is defined in s 3(1) of Income Tax Assessment Act 1936. • For example: tax from salary and wages • For example: tax from ordinary business income 2. Capital gains tax (CGT) • Under part 3-1 of ITAA97, a capital gain will arise where a CGT event happens after 19 September 1985 to a CGT asset and the capital amount that you receive from the CGT event exceeds the total costs associated with that event. • For example: profits on sale of shares • For example: profit on sale of investment properties

  5. The Income Tax Rates Table Plus Medicare levy is normally 1.5% of your taxable income, depending on your circumstances. Company – flat rate 30% on net profit

  6. What is tax evasion? Tax evasion involves unlawfully escaping liability for, or payment of, tax. It is when someone has deliberately and dishonestly evaded tax. Examples : • failing to declare assessable income. • claiming deductions for expenses that were not incurred or are not legally deductible. • claiming input credits for goods that GST has not been paid on. • failing to lodge tax returns in an attempt to avoid payment.

  7. What are structures?

  8. Why company? • Pays flexible wages and dividends. • Accumulates franking credits free of charge. • Directors duty is to act in good faith of the company at all times. • Liability is limited to the company. • Risk is limited to the company. • Shareholders are risk free. • Flat 30% tax rate on net profit.

  9. Why discretionary trust? • It distributes income flexibly, earnings could be distributed to the beneficiaries whom earns the least. • Asset protection, the asset are held in trust by the trustee for the beneficiaries. • The trustee controls the asset but do not own the assets in trust. • Legal relationship between the members – trust deed. • Low in running cost.

  10. Why tax planning? • It helps you legally reduce your tax without losing any money. • It helps you reduce your tax liability without engaging in tax evasion. • Tax affects every working individual in Australia on your ability to advance your wealth.

  11. The effect of tax Example: If you started with $2 and invested it at 100% return a year, which means it doubles every year, in five years you would have $32, in ten years you’d have $1,024 and in twenty years believe it or not you’d have $1,048,576…!!! Over a million dollars. (Before tax) $1 million 100% per year for 20 years $2.00

  12. What is the difference if tax was payable? Given the exact same circumstances of $2 invested at 100% return a year, if you were taxed at the current highest rate of 46.5%, you would be left with only $6,872.10 after the 20 year period!!! (After tax) $2 compounded at 100% over 20 years but taxed at 46.5% $6,872.10 $2.00

  13. $2 Compounded at 100% after 20 years of growth

  14. What can we do about tax? Example 1 - our client benefited by effective tax planning with flexible structures, the result was $14,000 tax saving per year!!!

  15. Example 2 - our client benefited by tax effective investment and integrated strategies. The result was $1575 tax saving, plus returns in investments!!!

  16. Example 3 - our client benefited by restructure from sole trader to company, The result was $19,000 tax saving per year!!!

  17. THE AJML Group There are plenty more ways you could legally reduce your tax without losing any money! The first hour of consultation is free of charge, if you wish to discuss: Please get a pen and note my details

  18. The AJML Group admin@ajml.com.au Tel: (02) 8812 7968 Fax: (02) 8456 5913 Suite 2, 295 Anzac Parade KINGSFORD NSW 2032 PO Box 1098 MERRYLANDS NSW 2160 www.ajml.com.au

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