Profit accumulation tax traps paper

Published on 08 Nov 12 by NATIONAL DIVISION, THE TAX INSTITUTE

By far, one of the greatest challenges facing SME businesses that operate through trust structures is avoiding the penal tax outcomes that are possible when operations are financed through profits that have been taxed at the corporate tax rate.

This paper examines some of the methods that have been developed to work with the new paradigm imposed by the Commissioner’s UPE ruling, including:

• developing practices with corporate beneficiaries
• lessons learned from completion of 2011 accounts
• implications from the February 2012 Montgomery Wools Case
• risks and opportunities through licensing goodwill.

Author profile

Christopher Wookey CTA

Chris is a principal in the tax consulting division of Deloitte Private in Melbourne. He has nearly 30 years' experience in the chartered accounting profession and is a member of The Tax Institute's Victorian State Technical Resource Committee as well as a regular presenter at its events. His experience, centred on issues encountered by private groups, includes advising about the tax treatment of accessing wealth accumulated in various structures such as trusts, superannuation funds and especially companies. - Current at 15 April 2015

More by Chris WOOKEY

• Mining corporate accumulations: Share buy-back strategies paper - 18-July-2016
• Cleaning up the Div 7A loans and UPE mess paper - 27-May-2016
• Getting value out of companies paper - 06-November-2014
• Topical tax issues from small business and the decision in Taras paper - 27-May-2014
• Inheriting an international client paper - 10-October-2013
• An accountant’s perspective paper - 25-May-2012
• Workshop 2 - CGT small business concessions and trust audit issues paper - 24-November-2011
• Getting down to business with Div 7A UPEs and s100A paper - 06-October-2011
• The brave new world of Div 7A in 2010 paper - 30-July-2010
• Offshore wealth - Accessing money overseas paper - 28-August-2009
• Entry and exit issues for professional practices paper - 12-October-2007
• Loans - tax aspects paper - 20-September-2007
• Lease incentives paper - 24-July-2007
• Loans: taxation paper - 18-July-2006
• Trust structures: Choosing between partnerships of trusts v unit trusts paper - 11-April-2006
• The Election Downsides - the 'so what' factor seminar paper - 09-June-2004
• Operational/Ongoing Financing seminar paper - 26-February-2003
• Trust disclosure requirements - 22-November-2001
• PAYG cash flow considerations - 11-April-2000
• Small business and individuals - 07-December-1999
• The PAYG installment system & its implications - 15-October-1999
• Pay as you go (PAYG instalment system and its implications) - 15-October-1999
• PAYG Installment System and its Implications - 07-October-1999
• The PAYG instalment system and its implications - 01-October-1999
• Tax Q&A: ANTS, ABNs, GST and PAYG: don't miss the showdown at the ABN corral - 01-September-1999

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