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AREAS OF EXPERTISE

Dentists & Medical Practitioners

The problems or concerns:

Most dentists perform their dental practices as sole traders because it’s easier to manage their tax matters. However, when they hear their colleagues talking about business structures, they begin wondering about their own taxation planning. They may come across questions such as:

  • Should a company be set up?
  • Are there any benefits to setting up a business structure?
  • Should I be buying my car under the business structure?
  • What is personal service income and how does that impact my earnings?
  • My dental colleagues have set up a family trust for asset protection purposes and to save some taxes – is this legit? Should I use the same strategy?
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How we help our clients:

We understand how each industry works differently. We first understand your current arrangements and your objectives. Then, we go through personal service income (PSI) provisions with you, being:

  • Is your income PSI?
  • Have you passed PSI tests and become PSB?
  • Are anti-avoidance rules applicable in your case when income splitting occurs?
  • Does new ATO draft PCG “application of professional firm profits” apply in your case?

Once we formulate your personal service income position, the next step is to determine whether a business structure (e.g. a company) can be of beneficial option for you. We will then address the initial set up and ongoing requirements of the structure with you so you are fully informed to make the decision.

If the purchase of a vehicle under the structure is one of your objectives, we will obtain further information from you as the option may suit someone but may not be suitable for you. The reason being that fringe benefit tax issues should be taken into account as well. We assist our clients to do some projections, analysis and compare different options so you know whether this option is better for you or not.

Disclaimer: the information contained above is for guidance only. It should not be relied upon without obtaining professional advice regarding your circumstances. No responsibility for loss occasioned directly or indirectly to any person acting or refraining from acting wholly or partially open or as a result of the above material can be accepted by the author of any company referred to herein.
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