Taxation

Quantum takes a different direction then some advisory firms in that Quantum has a high level of tax expertise and we believe that your plan should initially be derive around how and/or who is to hold your investments.

Quantum has developed the “Quantum Wealth Plan” which is focus around the Quantum Wealth Pyramid. This is the process of creating a wealth plan by having the correct tax structure in place, prior to actually selecting the investments, to ensure that the after-tax returns are maximised.

Tax Plan

When structuring investments, whether property, shares or business, considerations should be given to the following matters should be discussed:

  • Why should I consider a new investment structure?
  • What are the options and what are the considerations?
  • Risk and asset protection issues.
  • Compliance costs and tax management.
  • Litigation – protect assets.
  • Family succession issues to consider.

The various taxation structures aspects that can be considered in your overall Quantum Wealth Plan.

Self Managed Super Fund (SMSF)

An SMSF is a private superannuation fund (in effect a type of Trust), regulated by the Australian Taxation Office (ATO) that you manage yourself, by acting as a trustee.
SMSFs can have up to four members. All members must be trustees (or directors, if there is a corporate trustee) and are responsible for decisions made about the fund, investment selection and compliance with relevant laws.


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Fig. SMSF Tax Diagram

Companies

A company is a separate legal entity, unlike a sole trader or a partnership structure. This means the company has the same rights as a natural person and can incur debt, sue and be sued.
The company is owned by shareholders and is managed by its director/s, who may also be the shareholders.
You need to register a company with the Australian Securities and Investments Commission (ASIC). Company officers and directors must comply with legal obligations under the Corporations Act 2001.


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Fig. Company Tax Diagram.

Partnerships

A partnership is a business/investment structure with multiple owners, each of whom has invested in the business/assets.
Some partnerships include individuals who work in the business, while other partnerships may include partners who have limited participation and also limited liability for the debts and lawsuits against the business.


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Fig. Partnership Structure.

Trusts

A trust is a relationship between beneficiaries and a trustee, typically holding assets under the terms and conditions set out in its trust deed.
A trust does not have to pay income tax on income that is distributed to the beneficiaries but does have to pay tax on undistributed income.


There are various types of trusts:

  • Unit Trust
    This is a specific type of trust that divides the beneficial ownership of the trust property into units. It differs from a family (discretionary) trust in that trust property in the unit trust is held absolutely for the unit holder. Therefore, it does not give the trustee the discretion to distribute income or capital among unit holders. Distributions must be allocated in accordance to units held in trust.
  • Family Trust
    This refers to a discretionary trust set up to hold a family's assets or to conduct a family business. Generally, they are established for asset protection or tax purposes.
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Fig. Quantum Unit Trust.

Bare Trust

Bare Trust is typically a Trust established to allow a SMSF to purchase assets that will be “geared”.
Regulations require that the property acquired with borrowed monies must be held by a bare trust with the SMSF being the beneficiary of the trust.
The bare trust is merely the registered holder of the property until the loan is repaid. The SMSF will receive rental income from the lessee and will pay interest to the lender.
If and when the loan is repaid the legal ownership of the investment property will revert to the trustee of the SMSF.
The trustee of the SMSF cannot be identical (the same) as the trustee of the bare trust, this may in some instances require a corporate trustee for both entities, again dependent on the lenders requirements.
When a SMSF decides to buy the Property, the trustees of the bare trust enter into a contract of sale to purchase a property NOT the trustee of the SMSF, as the trustee of the bare trust is the entity as the registered owner upon completion of the property settlement.


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Fig. Investing via a Company Structure.

Will Trust

Testamentary/Will Trusts is established according to instructions in a will and comes into existence when that person passes away.
Rather than the deceased person’s assets going directly to beneficiaries, the assets are held in trust on behalf of those beneficiaries. Funds are then distributed according to the deceased’s rules and conditions.
A testamentary trust can protect the assets a beneficiary may receive in the event of bankruptcy, business lawsuit, or relationship breakdown.


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Fig. Testimony Trust Structure.


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1300 360 949

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We are here to help you

To discus your personal financial goals just book an appointment.

Still Have Questions?

Don't worry. We'll assist you. Discuss your situation with our finance experts.

Book an Appointment

Call us at

1300 360 949

info@quantumgroup.com.au

Contact Us

ATTEND A SEMINAR

Visit the link below for upcoming Quantum Wealth Seminar Dates

Quantum Seminars
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