General Advice about Financial Position / Recommendation for Financial Planner in Perth

LBargainsRoad on 06/04/2024 - 18:09
Last edited 06/04/2024 - 18:10

Hi All
I'm after some general financial advice. My circumstances:
* early 40s, single, no dependents
* no debts
* professional services business owner
* income last 5 years: $250K - $500K pa (going forward likely $200K - $300K pa)
* incorporated a company 4 years ago to receive bulk of income, with some matters invoices personally and some transfers made from company to myself (totalling my expenses, about $60K, which will be steady going forward) - on tax advice
* no super

Only when seeing tax agent last week that three issues arose (nothing in writing):
* first, PSI income - but appears OK given that 20%(?) personal income not from company (?)
* second, how to use company assets including for a vehicle etc
* third, ownership of assets (company has received $600K which bought shares in my name - so they will need to be transferred to myself(?) with CGT etc which is fine (company shares now worth net $700K, additional personal shares bought for net $400K now worth $500K, margin loan secured by both those additional $500K - total gross $1.7m).

But going forward, how should I best use company funds considering FBT (I am not a fan of super and may not live that long!) Further, is this strategy for dividing my income between personal and corporate entities to minimize tax liabilities a wise one (noting the beenfit to having the company from a business liability perspective too)?

Much appreciated, and yes I will aslo get professioanl advice in Perth, so welcome recommendations please.

BargainRoad (anonymous for obvious reasons).

Financial

Comments

  • jv on 06/04/2024 - 18:24
    +4

    What did your accountant say?

    • Muzeeb on 06/04/2024 - 18:35
      +10

      Create a new ghost account on ozbargain and ask the brains trust there.

      • Ocker on 06/04/2024 - 19:15
        +1

        One way to make a feel-good post.
        Seriously, how many on OZB could offer any meaningful advice,which takes me back to my first sentence.
        "look at me……..Kimmy…………look at me"

    • BargainsRoad on 06/04/2024 - 23:46

      To be honest, not a lot that I felt was relevant, that's why I ask. I have never until recently had need for financial advice, rather only tax advice.

  • bemybubble on 06/04/2024 - 18:43

    PSI might be ok. But did he mention the PCG that the ato are using to attack service arrangements??

    • BargainsRoad on 06/04/2024 - 23:45

      Didn't mention at all. Much appreciated that you bring my attention to it - had a quick google and appears rules in relation to 'Allocation of professional firm profits'. While, having a quick read of ATO guidance, it appears to apply to where there are various 'partners' in an enterprise, precisely the kind of background info I need when I discuss with a financial professional, cheers!

      • bemybubble on 07/04/2024 - 05:10

        Applies to sole practitioners too bud

  • SBOB on 06/04/2024 - 18:55
    +4

    BargainRoad (anonymous for obvious reasons).

    Are ghost accounts ok as long as it's just to talk about how much $ you have?

    • jv on 06/04/2024 - 20:00
      +3

      Are ghost accounts ok

      No

      • BargainsRoad on 06/04/2024 - 23:51

        Long time participant, but not gonna put this private information in an easily searchable profile…

        • jv on 07/04/2024 - 00:05
          +4

          OzBargain Rules:

          1) A ghost account is a duplicate account. Multiple accounts held by the same individual or entity are not permitted without proper authorisation.

  • AustriaBargain on 06/04/2024 - 19:15
    +3

    going forward likely $200K - $300K pa

    We should probably be coming to you for advice tbh

    • BargainsRoad on 06/04/2024 - 23:47
      +2

      Haha, I'm not arrogant enough to think a good income means good knowledge of much else than one's niche!

      • CheapskateQueen on 07/04/2024 - 21:37

        pay for some advice dude. making half a mill a year and asking us for advice

  • Tee Rex Arms on 06/04/2024 - 19:16
    +3

    Get yourself a partner. Richest single man in the graveyard.

    • AustriaBargain on 06/04/2024 - 19:34

      a partner

      Even if she or he makes 1/3 of his 300k yearly income, that would put their household income before tax to 400k. Snowballing 20 years worth of investments would make them very comfortable in their 60s.

      • donga100 on 06/04/2024 - 23:33
        +3

        Even if she or he makes 1/3 of his 300k yearly income

        Makes or takes?

        • AustriaBargain on 06/04/2024 - 23:41

          Well he'd probably want someone his own income bracket then, so there's still plenty to invest after spending a lot on themselves. An attractive woman/man who makes 300k a year would probably be a hard catch, all other things being equal being rich and good looking/having an attractive personality is a sought after combo in a partner. Wouldn't surprise me if most of them are already married. So it might not be in the cards for OP. Or maybe it is, who knows.

  • Dollar General on 06/04/2024 - 19:40
    +5

    Invest in my fund and claim a tax loss which will help offset future income

  • mskeggs on 06/04/2024 - 19:49
    +5

    You’ve got some questions best answered by an accountant to manage the fine print of tax etc.
    They can do that effectively and will be better than free internet advice. Though I have to say the arrangements you’ve mentioned seem like you haven’t been getting professional advice.
    You don’t sound like you have the plan together, just maximising dollars?
    Do you have reason to believe you will die young? If not, I’d certainly be making use of super.
    But the bigger question is what do you want to do in life with this sizeable income?
    It’s going to be a pretty grim time at some point if you reflect there might be more to life than money and work, especially if you do have a shortened life.
    If you truly do expect to live only till 60 so super is pointless, you probably have already earned all the money you need and I would be 100% focused on getting the most from life in your remaining 2 decades, not optimising my finances!

    • donga100 on 06/04/2024 - 23:35
      +1

      Super is not useless even if you expect to only live to 60yrs old. If you are terminally ill you can withdraw it earlier. Obviously it depends on how you intend to die, if it's a sudden death due to misadventure or suicide best to invest in something more short term.

    • BargainsRoad on 06/04/2024 - 23:49

      Yeah, I am focused on getting most from life for sure, that's why income gonna take a bit of a back seat going forward. No guarantee die young, but certainly factors are there. Also, just not a super fan - prefer to manage own affairs. But happy to be persuaded by professional advice.

      • mskeggs on 07/04/2024 - 08:55
        +3

        Super gives you very substantial tax advantages every year, and you can manage 100% of the decisions yourself via an SMSF.
        Only downside is the money is likely only for investment till you are 60.

        Be silly not to use it.

  • DingoBilly on 06/04/2024 - 20:03
    +2

    As others have mentioned, see an accountant.

    I'm always amazed by people earning this amount of money who seemingly don't have common sense. If you were on $40k sure, maybe you might be worried about the money but at your rate just pay for it.

    • BargainsRoad on 06/04/2024 - 23:50

      Accoutant vs financial planner, that's the question. Accountant never really gave context to the whole plan until now. I think financial planner will be the go.

  • AndyC1 on 06/04/2024 - 20:03
    +1

    What did the certified financial planner say?

  • freefall101 on 07/04/2024 - 00:46

    Quit drinking, start finding ways to enjoy life and I can recommend a good accountant for high net worth individuals (I used to work for one, we worked in the generally $600k+ annual income bracket about 10 years ago, but he's Melbourne based. Former ATO employee, ping me if you want).

    • BargainsRoad on 07/04/2024 - 00:59
      +1

      Don't drink for a few years, definitely one of the reasons behind recent business successes :) When I talk about old age, there is some illness I won't go into. I'll PM you re the referral.

  • ihbh on 07/04/2024 - 08:55
    -1

    I hope you drive a bomb (the Millionaire Next Door concept).

    Anyway, you should have set up a structure like this at the start. It's never too late, and doesn't have to cost an arm an a leg CGT/transaction costs by borrowing against those assets to put into the trust.

    You are the director of the corporate trustee of your family trust that owns the company and other investments.

    That will protect your assets, allow you to split income if you get married/have kids later.

    I'm not an accountant so I don't know about stuff like the company used assets to buy shares in your name. Why didn't the company lend you money for you to buy the shares in your name to make things transparent?

    Have you been paying yourself super? The assets can be your super, but not as tax effective and probably not as diversified.

    Your company's MTR is lower than yours (excl tax free threshold and lower rates), so you don't have to pay the extra tax until it pays out more dividends and you pay the excess, being able to reinvest the saved tax.

  • Tee Rex Arms on 07/04/2024 - 09:45
    +1

    So ghost accounts are all good these days? Cool brb

    • jv on 07/04/2024 - 15:01

      No…. Account is now in the penalty box for breaking the rules.

      • Tee Rex Arms on 07/04/2024 - 15:29

        Associated account should be banned

        • jv on 07/04/2024 - 19:55

          That would be twice the penalty

          • Tee Rex Arms on 07/04/2024 - 21:06

            @jv: Their dupe account going into the penalty box is hardly a penalty at all

            • jv on 07/04/2024 - 21:33

              @Tee Rex Arms: What about the public humiliation they are now suffering?

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