Structure for a Business

[MasterInvestor]

Hello

I have been running a business for a few years through my family trust, and am just beginning to realise that I may be doing things incorrectly.

My current situation is as follows. I receive commissions (only) from the company I work for, this goes directly into the trust - which issues a tax invoice. I then use this money to live on etc, with this money then 'officially' distributed to myself and wife at the end of the year.

I have asked my accountant about the personal services income rule, and he said it does not apply as i receive commissions from a variety of companies. But this companies pay the company i subscontract to who then pays my trust. However, my accountant is, I beleive, often incorrect.

So I wish to ask, am I doing things incorrectly, and if so how should I set myself up. What will happen if I am audited by the ATO?

Many thanks

MI

[DaleGG]

Hi

When the PSI rules were first introduced there was a bit of a panic by AMP agents for the same reasons... they have many customers but all the agents income is paid by AMP.

The tax office released a ruling which recognises such situations and allows the business to be exempt from the PSI rules. Without second guessing your accountant, I suspect that this might be why they were not overly concerned.

If you are concerned, a chat with the local tax office about the issue might be an idea. Be proactive and see what they have to say "off the record"

Dale

[Rolf Latham]

Hiya Master

we run our business the same way and are paid only from a couple of sources and have had good advice that PSI does not apply.

ta

rolf

[MasterInvestor]

Thank you both Rolf and Dale.