Non Footy Chat Thread II

[strider]

Where is the tax dodge? It can only mitigate trust tax to individual tax rates at lower brackets or company tax rate but the administration of distribution particularly to companies would make up a lot of the tax savings. I guess in rare circumstances you could also distribute to a SMSF but that’s rare and could be caught at top tax rate.
The only other option is to a charity but then you lose the money as well (basically 100% tax then)
The only real way it can be a “legal” tax dodge is if you have enough connected ie family members to distribute the profit to so they are less than company tax rate, which if administered poorly can be too risky for the tax savings.
And even before all that, PSI, div 7a and even part 4a can all come over top anyway

Dont go throwing your big words and acronyms at me

Im talking about cases where individuals earning sole incomes who should be paying individual tax on that income use it to split the income with partners and children to dodge higher tax brackets

 

[84 Baby]

Dont go throwing your big words and acronyms at me

Im talking about cases where individuals earning sole incomes who should be paying individual tax on that income use it to split the income with partners and children to dodge higher tax brackets

PSI means that if it should be the main persons income then it will be regardless of structure.
Non-adult children can get all of $416 each.
But consider this, you are having an issue with a mum and dad operation earning $170k and giving each of them $85k as opposed to one the full 170. Are you really begrudging them the $12k tax savings? Particularly if they both equally work in business?

 

[strider]

PSI means that if it should be the main persons income then it will be regardless of structure.
Non-adult children can get all of $416 each.
But consider this, you are having an issue with a mum and dad operation earning $170k and giving each of them $85k as opposed to one the full 170. Are you really begrudging them the $12k tax savings? Particularly if they both equally work in business?

if they both equally work fine - but i know of cases where its one person's income being split

 

[84 Baby]

if they both equally work fine - but i know of cases where its one person's income being split

So do I, but the tax rort isn’t that big. If the profit to beneficiary ratio goes above roughly $180k there’s no difference in tax anyway

 

[TheRam]

if they both equally work fine - but i know of cases where its one person's income being split

You're a real narc mate. I hope no one gives you a thin slice of the birthday cake, you'd snot the whole family.

Wake up to yourself. Learn to love man kind not hate.

 

[strider]

You're a real narc mate. I hope no one gives you a thin slice of the birthday cake, you'd snot the whole family.

Wake up to yourself. Learn to love man kind not hate.

I am loving man. By promoting fair taxes that help all

 

[Bandwagon]

I never said ban em entirely, i said Shorten should stop people using em as a tax dodge

Given the way you worded it, I could be forgiven for thinking that's what you meant.

Strider said: "I also think Labor should stop the use of Trusts which is nothing but glorified income splitting tax evaission"

But I'll take it you meant remove the option to income split, which is what they are doing.

The other side of that is that there are genuine reasons to split income, for example, a married couple who have invested in a business ( often underwritten by the family home ) where only one partner works in the business, but both are owners, if it was a company, the income would be split by shareholding, in the case of a trust, it's still split, it's just slightly more flexible.

You can split it with your kids, but then if they're under 18 the limit is like $400 odd, and if they're over 18 and studying, then the income is assessed against their ausstudy and the effective tax rate ends up higher at any rate.

In any case, once incomes hit around 37K and your into 32.5c in the dollar, it's neither here nor there, it's getting taxed at the marginal rate, so at that point if a business is in either a growth phase, or paying down debt, which requires re-investment of earnings, tax wise it's better off as a company because earnings can be retained at the corporate rate rather that the individual rate.

It's not trusts per se that are the problem, it's their use in more complicated and or convoluted structures that are really the issue, and again as 84 baby alluded to, the cost of administering ones affairs at that level, makes it only viable to the reasonably wealthy.

 

[84 Baby]

It's not trusts per se that are the problem, it's their use in more complicated and or convoluted structures that are really the issue, and again as 84 baby alluded to, the cost of administering ones affairs at that level, makes it only viable to the reasonably wealthy.

It’s not even the numbers that increases the cost. The cost of not having the correct paperwork can be exorbitant. Or forgetting to transfer the money. Or mistiming the tax lodgement

 

[TheRam]

I am loving man. By promoting fair taxes that help all

By focusing on a mild tax break(dodge) as if it is some high crime shows only pettiness mate.

I'm or for bringing down the elite money makers and corporate corrupt individuals that are laundering and hiding all their(usually) ill gotten gains, as you probably already know, but what you are going on about is so irrelevant and minor that you just sound bitter or silly.

Besides who said that every cent or investment we make should be taxed anyway? You have fallen into the trap that all government taxes are fair(legit) and our duty to pay them. Sure they maybe the law, but that doesn't make all taxes right or fair.

And since government is only there supposedly to look after our best interests, they are the ones that are doing the wrong thing by demanding taxes from every little possible profit we ever make.

And before you get on your high horse about and say something like, "but if we didn't pay our fair share of taxes, how would the government be able to finance all the things it does?" One, no one is saying we shouldn't pay any taxes, but what we should pay should be very little compared to what we pay now and two, you don't need taxes to finance virtually anything if the Government sets up the right type of financial system and was actually working for us and not the power, money elite.

 

[Eelogical]

f**king hell! Easter break and we have a bunch of nuffies talking accountant and tax consultant lingo! No love for loaves of bread, fish or chocolates.

 

[Bazal]

I'm on the bourbons Eelo, give me a chance to crack a bottle of red and the conversation will take a much more interesting turn.

Well, either that or I'll fall asleep

 

[Eelogical]

I'm on the bourbons Eelo, give me a chance to crack a bottle of red and the conversation will take a much more interesting turn.

Well, either that or I'll fall asleep

It's pissing down rain in my part of Brissy atm. I'm going nowhere for the rest of today.

 

[Bazal]

It's pissing down rain in my part of Brissy atm. I'm going nowhere for the rest of today.

This may be the only time I will ever say it, but Canberra is better than Brissy then....

Glorious arvo, not a cloud in the sky and still 25 degrees. Fantastic for sitting in the sun with a beverage watching footy

 

[Eelogical]

I could live in almost any part of OZ within 200K from the coast. I don't think any part of the country is any better or worse than the rest, within those guidelines. Every place has it good and bad. Borders don't really mean anything.

 

[Bazal]

I could live in almost any part of OZ within 200K from the coast. I don't think any part of the country is any better or worse than the rest, within those guidelines. Every place has it good and bad. Borders don't really mean anything.

Nah.

You don't want to be in C-Brah for the winter. It's definitely worse than most....

 

[Eelogical]

Nah.

You don't want to be in C-Brah for the winter. It's definitely worse than most....

I have a brother and a sister who have lived there for almost 50 years, I am very familiar with the place. Cold as a witches tit in winter and can be as hot as Hades in summer. Nice down the Kings Hwy to Bateman's Bay or south on the Monaro to the Snowy. I have no hate for the area apart from the footy team.

 

[Bazal]

I have a brother and a sister who have lived there for almost 50 years, I am very familiar with the place. Cold as a witches tit in winter and can be as hot as Hades in summer. Nice down the Kings Hwy to Bateman's Bay or south on the Monaro to the Snowy. I have no hate for the area apart from the footy team.

I don't hate it. It's actually turning into a pretty cool little town in many ways.

I just hate the winters, which is a hard thing to get past.

 

[Eelogical]

I don't hate it. It's actually turning into a pretty cool little town in many ways.

I just hate the winters, which is a hard thing to get past.

The biggest thing I miss about Sydney is the winter. I always enjoyed the easy access to the Blue Mts or the south coast when winter rolled around. Not so much up here. Gundaroo pub was good.

 

[Suitman]

I don't hate it. It's actually turning into a pretty cool little town in many ways.

I just hate the winters, which is a hard thing to get past.

And it now has a very cool light rail which is opening tomorrow/Monday.

 

[Bazal]

And it now has a very cool light rail which is opening tomorrow/Monday.

It's really not very cool....in fact as it stands it's a complete waste of time