LAWS553: Macquarie Law School - Taxation Law Assessment Answer

Question:

You are a lawyer working in a tax practice. A client consults you for advice on how best to restructure his business. His objectives are to minimise tax, of which he feels he is paying too much, to build wealth for his family and to generate retained profits to allow business expansion.

Your notes from the initial meeting with the client follow:

1. Bruno is a successful builder whose business is expanding. Current turnover is approaching $1.5 Mio per annum.
2. Bruno is an Australian tax resident, as is his family except for his daughter. Bruno’s wife has her own successful career and would only be able to commit half a day at most to helping with Bruno’s business (in which she is not really interested). His daughter is aged 25 and is a nurse living in London. His elder son is 20 and a student at university. His younger son is 14 and at school.
3. Currently his business is structured as a sole trader.
4. Bruno has been speaking to friends in the industry and has the impression that a different business structure may facilitate attainment of his objectives mentioned above.
5. He is considering the alternatives of incorporating a company, possibly with family members as shareholders; a partnership, possibly with his wife and elder son as partners with himself; and a family trust. He mentions that he has heard about the advantages of combinations of these, such as a trust with a company as beneficiary and a company with a trust as shareholder. As an aside he mentions that he has a friend who takes large amounts of money out of his company as loans, which are never paid back, and on which he pays no tax. This sounds good to Bruno.
6. During the conversation, Bruno confides to you that of course, being a traditional family man, his wife and children would not really have any say in what happened to the monies they may receive on paper as distributions under the various alternatives.
7. Employment of all Australian-based family members “at attractive salaries” by the business is also something that Bruno would like. He wonders if engaging them as contractors rather than employees would lead to a lower tax rate. There would also be a benefit in not having to pay for superannuation contributions and on-costs such as workers compensation insurance.  He would like the London-based daughter to receive some sort of remuneration as well.
8. Provision of “company cars” for his wife and elder son is something that Bruno wants with as little extra tax as possible resulting.
9. Bruno also mentions that an acquaintance who has a swimming pool installation business is looking to sell his company. This company has been running at a loss for several years due to a downturn in that sector, and has substantial carried forward tax losses. Because of these losses Bruno envisages buying the company at an attractive price. He would not continue with pool construction but use the company’s equipment and expertise to build an excavation business, which he is convinced he could run at a profit and utilise the tax losses. The current owner of the company holds all of the shares and would be open to Bruno buying all of these, or some proportion of these as agreed. In either case Bruno would take over active management of the company.

Prepare a report for Bruno explaining the tax and wealth building properties of each of the envisaged business structures, including how each of the family members would be taxed. Compare the outcomes and make a recommendation. Also advise Bruno how he might go about acquiring the swimming pool business to best achieve his tax minimisation objectives there.

This Law Assessment has been solved by our Law experts at My Uni Paper. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.

Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.