Case Study No 1
Christopher had a transport company that employed himself and one other employee. The company had two shareholders himself and his wife, Christopher was already 60 by the time we meet. His previous accountant held no tax planning meetings in the 8 years he was with him. If the previous accountant held a meeting, he would (assuming that is) of found many ways to reduce the company’s and his tax payable amounts.
Upon further investigations of we found numerous issues with the way things were being completed, among other things, Christopher’s accounts had a superfund that had no contributions going into it for the last 6 years. At this point we were totally perplexed with the lack of care or knowledge that was shown.
We went straight into 5th gear and reviewed all the accounts with a fine tooth comb. Once we concluded what we believed should be done we organised a meeting with Christopher and the whole Family. We guided them right through the whole picture explained to them what we wanted to do and most importantly why, because as we were asking Christopher why things were, he did not have an answer because nobody took the time to explain anything to him.
Once we explained all that was required, we made the changes to the the company’s wages, increased the superannuation, stopped directors fees (as the company had accumulated $120k in franking credits over the years) and paid fully franked dividends to him and his wife. By spending five extra hours on Christopher’s accounts we saved him $16k in Company tax, and they received a combined tax refund of $12850 to which he said “I have never ever received a tax refund of this size”.
Case Study No 2
Sera was recommended to me by another client, as he was concerned the way this Solicitor was giving advice and the amount that he was going to charge her for the setup of the Structure.
We meet with Sera to discuss buying a property in rural Victoria. What she wanted was to have use of the property, but no legally own it. So Sera’s idea was to protect her assets in the event that something happened, as in life, things do.
Thankfully she did come and see me because, had she gone ahead and structured the Trust up the way this (so called) solicitor recommended, she would have been none the wiser that the current structure did not protect her at all, until of course it was all too late. She would have been open slather for anyone that wanted to sue her.
Once we discussed exactly what the desired outcome was, we set up a Family Trust with a Corporate Trustee that was directed by a good friend of Sera. We appointed Sera the Appointer of the Trust which allowed her to control the trustee and the cost of setup was reduced by 55% of the initial setup costs.
What this created was a fairly solid structure that cannot be touched as a Trust is not a legal entity.