1. Demystifying Business Structures: Companies, Trusts and Sole Traders 16 February 2012 Leon Loganathan Partner Darwin Palmerston Casuarina Parap Alice Springs Gove

2. Business Structures – Sole Trader What is a sole trader  Individual  No separate tax return Why operate as a sole trader  Size  Reporting requirements  Tax  Application of 50% CGT general discount Ability to offset losses against other income Disadvantages  No asset protection Darwin Palmerston Casuarina Parap Alice Springs Gove

3. Business Structures – Company What is a company  Separate legal entity  Constitution/Shareholders/Directors Why use a company  Asset protection  Tax benefits Disadvantages  Administration and reporting requirements - ASIC  Treatment of losses  Capital Gains Tax 50% general discount does not apply Darwin Palmerston Casuarina Parap Alice Springs Gove

4. Business Structures – Trusts What is a trust  Trust deed - Settlor/Appointor/Trustee/Beneficiaries Types of trusts  Unit Trust  Discretionary Trust Why use a trust  Asset Protection  Tax benefits Flow through of income to beneficiaries Flexibility in distributing income Availability of 50% CGT general discount Darwin Palmerston Casuarina Parap Alice Springs Gove

5. Business Structures – Trusts Disadvantages  Administration and reporting requirements - ASIC  Income must be distributed – can’t be retained like a company  Treatment of losses – they remain in the trust and can’t be offset against income of beneficiaries  ATO is continually tightening policy around the use of trusts and eroding the benefits Darwin Palmerston Casuarina Parap Alice Springs Gove

6. Transferring Assets - Restructuring Stamp Duty  Are there any exemptions Capital Gains Tax  Is there any rollover relief Documentation  Legal and taxation requirements Darwin Palmerston Casuarina Parap Alice Springs Gove

7. Thank You Darwin Palmerston Casuarina Parap Alice Springs Gove