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Getting value out of companies - Part 1 paper


This paper deals with a number of tax efficient strategies adapted to extract money from companies. The paper covers principles in each case, the practicalities, what the ATO has had to say to date and the likely areas of focus by the ATO, both today and in the future. Topics covered include:

  • getting money out of cash box companies, dividends, super, termination payments, bonuses, retainers, consulting fees, liquidation
  • accessing the cash before it goes into a corporate beneficiary - via an interposed trust;
  • loans by companies to and out of limited partnerships;
  • acquiring wasting assets in companies with retained earnings;
  • treatment of franked dividends to non-residents (via discretionary trusts);
  • dividends to companies with negative net assets (via discretionary trusts);
  • dividends to negatively geared shareholders;
  • passing shares to the trustee of a testamentary trust;
  • converting 7-year loans to 25-year Div 7A complying loans; and
  • franked dividend to shareholder who makes super contributions.

Author profile

Paul Hockridge CTA
Photo of author, Paul HOCKRIDGE Paul is Tax Advisory Partner at Mutual Trust, Australia’s leading multi-family office. He has worked for the ATO, a large law firm, has been a partner in medium and Big 4 chartered accounting firms and has over 30 years' experience in tax, asset protection, estate and succession planning. Paul’s niches include litigation support, property development and FBT and salary packaging. Paul specialises in advising high wealth families and closely held businesses, as well as providing support for a number of accounting and law firms. Paul maintains a practicing certificate as a legal practitioner in Victoria, is a fellow of both CPA Australia and Chartered Accountants Australian and New Zealand, is senior fellow and teaches in the Masters program in the Law School at the University of Melbourne and is a chartered tax adviser. He sits on The Tax Institute’s FBT and Employment Taxes Committee and contributes to The Tax Institute’s book, Estate and Business Succession Planning. Perhaps Paul is best known as a regular presenter at local, State and National Tax Institute conferences. - Current at 04 December 2019
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This was presented at 17th National Tax Intensive Retreat: Extracting Value .

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Individual sessions

Recent developments relating to discretionary trusts - getting money out of trusts against the wishes of the trustee & appointor

Author(s):  Lisa HESPE

Materials from this session:

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