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INCORPORATION
As a result of the changes
to the individual State Health Acts, there has been some promotion
of aggressive structuring techniques by some professional firms.
One recent example involved the promoting the assignment
of partnership income to a trust. It is important to remember that
any structuring must be done with the commercial aspects being
paramount with any tax consequences following a close second. If tax
advantages are the primary driver you could fall foul of the Tax
Act's anti-avoidance provisions.
On a different note and
regardless of the tax advantages there are some sound commercial
advantages for pharmacists seeking to buy a pharmacy in a company or
roll-over their existing pharmacy into a company. The two main
cashflow issues requiring consideration if you are considering
rolling over your business into a company are stamp duty and capital
gains tax.
The disadvantage for some pharmacists transferring
their pharmacy to a company will be the possible loss of some small
business capital gains concessions (although CGT can often be
negated via the use of superannuation).
Stamp duty varies in
each State therefore you should consult your JR Partner to discuss.
For those of you carrying large amounts of debt though, the cashflow
advantage created by the tax differential between the top individual
rate of 48.5% and the corporate rate of 30% may well be too
compelling.
Other stories
- Service
Trusts
- Choice of
Fund
- Abolition of
Surcharge
or
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