Tax Effective Structuring and Asset Protection



Life Stage: Professional ‐‐ With Children

Employment Status: SME / Business Owner

Household Income Range: $250K ‐‐ $500K

Business Revenue Range: $3M+

Asset Summary: Company worth approx $2m, 3 properties approx $2.3m, vehicles worth 130k

Liability Summary: Loans $1.6m


  1. Client who is in building materials industry had just won large contracts that would see his company go from $5m to $20m turnover within the next 12 months.
  2. Client needed to secure large trading accounts with the likes of CSR who in turn requested to put caveats against personal properties in order to allow requested terms.
  3. Client had serious concerns about asset protection and making sure family is taken care of should things go wrong. They wanted to buy a new home and did not want that to be affected.
  4. Our detailed review identified several issues:

A) All trading company shares were sitting in personal name which is an issue from asset protection point of view as any small personal legal issue could see the client lose the control of their business. Additionally any profits paid out had to be recognised in client personal name and resulted in huge tax bills each year.

B) There were large amounts of cash in the trading company as retained profits were not getting distributed.  This was a huge risk as client could lose all their cash should anything happen to the trading company.

C) All existing properties were in client’s own name and moving them will involve large capital gains tax and stamp duty.


  1. To move the trading company shares into a newly formed holding company that is owned by the newly formed family trust. This protected the business ownership. Additionally, the holding company now allowed us to transfer all profits to the holding company and secure the realised profits from any creditors. This also provided a tax saving as holding company was entitled to reduced small business tax rates hence client had more profits left at their disposal. We could now shift profits as needed into the trust and distribute them to the client in the most tax effective way.
  2. Capital gains on sale of transfer of shares were reduced by using small business concessions down to 25% of the value and then we recommended to transfer the remaining amount into client’s super to pay 0% tax and at the same time increase the client’s non‐existent super balance.
  3. Trust enabled the client to purchase the home without a worry of creditors coming after it. They could also start building a property portfolio that was worry free and in the most flexible tax structure catering for growth.
  4. In order to protect the client’s existing properties without incurring large stamp duty and CGT bills we referred them onto one of our legal business partners to setup a specialised property trust system that then protected their existing properties by placing caveats on them, prior to their creditors, leaving the client in full control should there be a claim on any of their properties.


  1. Total asset protection of existing and any new assets
  2. Lower tax bills
  3. Full flexibility to cater for future changes
  4. Additional funds in their superannuation fund they never had
  5. Ability to focus on managing and growing their business without a worry