Unity Advisors

Call us now (02) 9280 3336

Tax Advisory

Prior to establishing Unity Advisors, our Principals were specialist tax advisors working in Australia’s biggest and most prestigious accounting firms. This invaluable experience, dealing with large corporates, SMEs and high net worth individuals, means we can provide you with big firm tax expertise, without the big firm fees.

Transaction Specific Advice.

We provide taxation opinions and advices on specific transactions including:

Business structures and restructures

Life doesn’t stand still for long, and neither does business. Like all of us, most business go through a life cycle. As your businesses evolves, the structure in which you operate may also need to evolve to provide you with the best asset protection and tax minimisation outcomes.

Many businesses start out as an individual operating as a sole trader. And as it grows, the next phase may be to incorporate the business for asset protection purposes and to access the capped corporate tax rate.

Future restructuring events may include the introduction of additional equity holders, or even the sale of the business.

Each of the above events require careful consideration of the type of entity used to conduct your business and the entities you use hold your interests in the business.

The choices regarding structures during each of these events can have significantly different capital gains tax implications, both at the time of restructure, and any future restructuring events.

We ensure you fully understand all the options available to you, and the respective implications so you can structure your affairs to best meet your future aspirations.

Employee remuneration including fringe benefits tax (FBT) and employee share schemes (ESS)

Retaining key staff can be a major challenge for any business.  We work with our clients to tailor employee salary packages that keep key employees incentivised and engaged with their business. 

This can include:

  1. Salary sacrifice of concessionally fringe benefits
  2. Employee Share Schemes
  3. Bonus Schemes
  4. Phantom Equity Schemes
Trusts

What is trust?

Essentially, a trust is a relationship between a person (called the trustee) and another person (called the beneficiary) in which the trustee holds property (called the trust property of the trust fund) for the benefit of the beneficiary. There can one or more trustees and often there are many beneficiaries.

Why use one?

Trusts can provide a high level of asset protection and tax planning opportunities to minimise your tax.

Tax implications of getting it wrong?

There are many types of trusts, so it is important to choose the type of trust that best suits your situation and purpose.

There are strict legal requirements in operating a trust, and failure to meet these requirements can have detrimental taxation and legal consequences.

Trusts can be a very beneficial vehicle to hold assets, but they can be complex and need to be set up and administered correctly. 

We’ll ensure you maximise your position through the most effective use of trusts.

Goods and Services Tax (GST)

The GST is a 10% indirect tax charged by the supplier of Goods, Services, Rights and Obligations.  GST should really be renamed as the GSROT because it applies to much more than just goods and services. 

There are GST implications for almost every transaction a business undertakes. 

As a business owner, it is essential to understand your GST obligations. 

Understating your GST liabilities can result in the ATO imposing significant penalties and a costly tax audit.

GST is not always as simple as adding 10 percent, and special rules apply to certain transactions, such as the sale of second hand goods, importations, vouchers, insurance transactions and the sale of residential property.

We always recommend you seek advice on the GST implications of any major transaction such as buying or selling property, or your business, so you don’t end up with an unexpected GST liability to the ATO.

Capital Gains Tax

CGT is essentially a tax paid on a gain realised on an asset which was purchased after 19 September 1985.

A capital gain or loss will only result where an event occurs to the asset (a CGT event).  These events as listed in the CGT provisions.  The most common events are the disposal of an asset or the cancellation of an asset.

The tax rate is determined by the taxpayer realising the capital gain.

International Tax

The world is getting smaller and cross border transactions are now commonplace.

We have extensive experience advising clients on the tax issues associated with conducting business overseas, including setting up foreign branches or subsidiaries.  We can also assist foreign entities with inbound investment into the Australian market.

Aside from business services, we also advise inbound and outbound individuals on the tax implications on changing tax residency, whether that be temporarily or permanently.

Property transactions

Property prices have boomed in Australia’s capital cities over the last two decades.

Property transactions are major transactions and can have significant income tax consequences.

Buying, holding and selling property can be subject to capital gains tax, land tax, stamp duty, income tax and GST depending on the situation.

We advise property investors and property developers on the potential tax implications when considering a property transaction.  We can also assist with financial modelling, including incorporating different tax treatments.

Even selling your principal place of residence may be subject to capital gains tax if you have rented it out for a period of time, or used part of the home to run a business.

Payroll Tax

Payroll tax is payable by an employer whose total annual Australian wages exceed a specified exemption threshold.

Payroll tax administered by each state and territory separately. While the thresholds and rates may vary between the jurisdictions, the operation of the payroll tax regimes often mirror each other. 

In NSW, payroll tax of 5.45% applies where taxable wages exceeds $900,000 to the year ended 30 June 2020. 

If you pay wages in another Australian state or territory, the threshold is calculated as a proportion equal to the ratio of NSW wages to total Australian wages. For example, if 80 per cent of your total wages are paid in NSW, you’re entitled to 80 per cent of the threshold.

Yes, it’s pretty complicated!

We assist our clients navigate the many complexities of payroll tax including :

  1. What payments qualify as taxable wages,
  2. Whether fringe benefits, superannuation contributions, employee share schemes and trust distributions are subject to payroll tax
  3. How contracts for services are categorised, rebates and exemptions
  4. Grouping of related employers
  5. Employers who pay wages in more than one jurisdiction and administrative matters. 

Recent developments in payroll tax have significant implications for medical practices and professional services firms in particular - you can find more detail here… https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/payroll-tax

Estate and succession planning

As the saying goes, “there on only two sure things in life, death and taxes”

As uncomfortable as the topic of death may be, it is an eventuality for all of us and the timing will likely be out of our control

Estate planning aims to ensure:

  1. Your wealth is transferred to your beneficiaries in the most tax effective manner possible.
  2. We minimise any potential conflict between the beneficiaries over your estate.
  3. Protection of the beneficiaries, so their inheritance remains in their hands.

There is no one size fits all approach. Our clients’ circumstances can vary greatly.  And it’s important to remember that estate planning is not a ‘set and forget’ procedure, as your circumstances and those of your beneficiaries can alter significantly over time.

Proper estate planning can save you thousands and sometimes millions of dollars unnecessarily ending up in the Governments coffers instead benefiting your loved ones. 

We work closely with Sydney’s best estate planning lawyers to ensure you get the best outcome for you and your family, and help you leave it to your loved ones – not the tax man.

Personal Services Income (PSI) regime

Personal services income (PSI) is income that is mainly a reward for an individual's personal efforts or skills.

The Tax Office takes the default view that PSI should be assessable in the hands of the individual whose skills and efforts derive the income unless the income is generated in the course of carrying on a Personal Services Business.

Often Sole Traders or individuals trade through an interposed entity such as a company or trust to earn PSI.  This is often for asset protection purposes.

Where the sole trader or individual is not considered to be an independent contractor, the PSI billed by the interposed entity will be required to be assessed in the individual’s personal tax return instead of the interposed entity.  Also, certain deductions may be limited where an individual is earning PSI.

The PSI rules were designed to stop employers avoiding obligations such as superannuation contributions, PAYGW and payroll tax by engaging their “employees” as contractors through an interposed entity such as a company or trust.

There are four tests the ATO apply to determine whether you operate as independent contractor (and operate a Personal Services Business) or whether you effectively operate as an employee getting paid via an interposed entity:

  1. The Results Test
  2. The Unrelated Clients Test
  3. Employment Test.
  4. Business Premises Test

If you meet one or more of these tests, your personal services income is taken to be generated in the course of conducting Personal Services Business, and the PSI rules will not affect your tax obligations.  If the Personal Services Income is paid to your company, partnership or trust, rather than to you directly, then the entity is your personal services entity.

If you do not pass any of the tests, the PSI rules may apply. This means you:

Won’t be able to claim certain deductions against the PSI. Including rent, mortgage interest, rates, land tax, certain payments to associates for non-principal work; and super contributions for associates’ non principal work. https://www.ato.gov.au/business/personal-services-income/in-detail/claiming-deductions-when-receiving-psi/?anchor=DeductionsthatcantbeclaimedagainstthePSI

Please note the PSI rules only impact the tax treatment.  If the PSI rules apply, you still remain a contractor to your customer (e.g. you may be treated like an employee for tax purpose only and a contractor for commercial purposes).

If you are unsure of your tax obligations when earning PSI, we’re here to help and guide you through.

Early stage innovation companies

If you had a brilliant idea and have started to commercialise it, but you’re lacking the funds to take it to the next level, you may want to consider attracting seed investment. 

The Early Stage Innovation provisions provide great tax incentives to investors in early stage innovation (ESIC) companies.

Investors in ESIC companies receive the following tax benefits: 

  1. A 20% rebate on their investment.  For example, a qualifying investment of $100,000 will give the investor an instant $20,000 tax credit to apply against their other tax. 
  2. The investment in the ESIC will not be subject to Capital Gains Tax for the first 10 years.  If the investor holds the ESIC shares for more than 10 years, they only pay capital gains tax on the capital growth accruing from the 10-year mark onwards.

If your company qualifies, you will be in a much stronger position to promote your company to potential investors. 

We can advise you whether your company is eligible for ESIC status!

Tax provision reviews and tax due diligence reviews 

If you had a brilliant idea and have started to commercialise it, but you’re lacking the funds to take it to the next level, you may want to consider attracting seed investment. 

The Early Stage Innovation provisions provide great tax incentives to investors in early stage innovation (ESIC) companies.

Investors in ESIC companies receive the following tax benefits: 

  1. A 20% rebate on their investment.  For example, a qualifying investment of $100,000 will give the investor an instant $20,000 tax credit to apply against their other tax. 
  2. The investment in the ESIC will not be subject to Capital Gains Tax for the first 10 years.  If the investor holds the ESIC shares for more than 10 years, they only pay capital gains tax on the capital growth accruing from the 10-year mark onwards.

If your company qualifies, you will be in a much stronger position to promote your company to potential investors. 

We can advise you whether your company is eligible for ESIC status!

Need some expert business or personal tax advise?

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UNITY ADVISORS

Suite 452, Level 5,

311 Castlereagh Street

Sydney 2000

Ph  (02) 9280 3336