Relying on just an Accountant rather than a Financial Advisor
Not protecting their assets
Not making the most of available tax effective strategies
Not using effective retirement planning strategies
Not paying down debt before retirement
As a Sole trader you are personally liable for all the debts of your business. When tax strategy you can employ is to setup a trust to protect your assets and save you a lot of heartache at tax time. A special family trust called a discretionary trading trust can separate your business from your person and provide substantial asset protection.
How a trust works
As a trust cannot be sued, any creditors would pursue the trustees.
As the trust is setup as a ‘Discretionary trust’, the trustee directors can choose year to year at their ‘discretion’ to whom they distribute trust distributions or profits.
A discretionary trust does not pay tax, however it does a tax return.
The new business trust distribute income across the family instead at marginal tax rates to lower the overall tax payable.
The tax savings can then be redirected into Super contributions and debt reduction
The team at Forward360 can help you avoid these costly mistakes and help you make the most of available tax strategies.
Co-founder and Managing Director at Forward360. Simon ensures all clients get the financial advice they need to reach and exceed their financial goals — both personally and professionally.
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