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How to detect about your cheating in business by your business partner

Cheating in business happens more than we like to realise.

Trust in business is the foundation upon which successful partnerships are built. Without trust, a business partnership is like a house of cards that is vulnerable to collapse at any moment. As a business owner, it is crucial to understand the significance of trust. Cheating in business has detrimental consequences when your business partner isn’t on doing the right thing!

In business, we see Trust in business as believing that your partner will act in your best interest with integrity and honesty. It means relying on their actions and knowing that they will follow through on their commitments. It’s a partnership like a marriage.

When you suspect that your business partner is cheating you and your business! It’s time to act! Recognizing the signs of potential cheating or betrayal is crucial in protecting your business, your ownership share, and profits and preserving your own well-being.

When things are wrong at worst, It may indicate that the business relationship is over. You will need to determine the extent of business cheating and organise a business exit plan.
Warning signs that indicate that things are not right include sudden changes in behaviors or attitude. Your business partner may have unexplained secretive actions, excessive control or manipulation, frequent and unexplained financial discrepancies. There also be a lack of transparency or accountability.
If you notice any of these signs, addressing them promptly and openly is important. Ignoring these red flags can damage your business and personal life irreparably.


What drives people to cheat?

You might be aware why things are right such, but leads people to undertake to cheat against you maybe reasons such as:


+ A feeling of being undervalued.
+ Greed
+ Marriage and other personal problems
+ Addiction such as gambling or drug and need to make extra.
+ Other influences such as offers of a better deal.


Trust your instincts and gather evidence before confronting your partner about your suspicions. It then means you can have a clear, evidence-based conversation rather than relying purely on emotions or assumptions.


3 tell-tale things that may mean things are right!

Be diligent and watch for hidden business relationships.

Discovering that your partner is working with competitors or starting side businesses without your knowledge can be common for those looking at going out alone.


· The decline in business performance: A sudden drop in business performance without any valid explanation could signify mismanagement or unethical practices.
· Lack of commitment or interest: If your partner appears to be less involved or engaged in the business, it may indicate that their attention is focused elsewhere.
· Unavailability or avoidance: Difficulty reaching your partner or constant avoidance of meetings and discussions might indicate they are hiding something.

Ways to detect cheating or fraud in your partnership.

Detecting cheating or fraud in a partnership requires a combination of vigilance, attention to detail, and a proactive approach.

Approaches to deal with business cheating may include:


– Regular financial review of the records may uncover discrepancies or irregularities.
– Monitoring cash flows, expenses, and financial records is essential to detect any signs of embezzlement or misappropriation of funds.
– Implementing robust internal controls, such as segregation of duties and regular reconciliations, can deter fraudulent activities.
– Understanding all aspects of your business, not just your area of control
– Be curious and ask questions.

Do you have open lines of communication with your partner? These should include regularly discussing the state of the business, sharing financial information. You must ensure transparency which can help identify any inconsistencies or discrepancies. Being vigilant about changes in behavior or attitude by conducting background checks on potential partners can also provide valuable insights into their integrity and trustworthiness.

If your business partner stops talking about their life outside of business, it could be a sign they are becoming secretive.

The impact of cheating on your business

Cheating or betrayal in a business partnership can have severe consequences for your business, both financially and emotionally. It can lead to financial losses, reputational damage, and the erosion of client trust. The fallout from a cheating partner can disrupt operations. It will strain relationships with employees, suppliers, and customers, and even result in legal battles. The emotional toll of betrayal can be equally devastating, causing stress, anxiety, and a loss of confidence in future partnerships.

The impact of cheating extends beyond the immediate fallout. It can create a culture of mistrust within your organization and make attracting and retaining talented employees and clients more challenging. Rebuilding trust after a betrayal takes time, effort, and a commitment to change. It requires acknowledging the pain caused, taking responsibility for one’s actions, and implementing measures to prevent a recurrence.

Steps to prevent cheating or betrayal in business.

Preventing cheating or betrayal in future partnerships starts with due diligence and careful partner selection. Thoroughly vetting potential partners, conducting background checks, and seeking references can help identify any red flags or warning signs. Choosing partners who share your values, have a track record of integrity, and are committed to open and transparent communication is essential.

Establishing clear boundaries from the outset and a robust shareholders agreement are crucial in preventing cheating or betrayal. This includes defining roles and responsibilities, setting up internal controls, and regularly reviewing and discussing the state of the business. Implementing checks and balances, such as regular audits, can deter fraudulent activities and provide peace of mind for both partners.

The role of communication and transparency in maintaining trust


Communication and transparency are the cornerstones of maintaining trust in a business partnership. Regular and open communication allows for sharing of information, ideas, and concerns. It fosters a collaborative environment where both partners feel heard and valued. Transparent communication involves being honest and forthcoming about the state of the business, financial matters, and any challenges or concerns that may arise.

Transparency also extends to decision-making processes. Ensure that both partners have an equal say and are informed about important decisions in the business. This includes sharing financial information, including revenue, expenses, and profitability, to build a shared understanding and ensure accountability. By fostering an open communication and transparency culture, partners can build trust and strengthen their partnerships over time.


Before pursuing legal action, it is important to gather evidence and document any instances of cheating or fraud. This may include financial records, emails, contracts, or witness statements. Presenting a strong case will increase the likelihood of a favorable outcome and hold the offending party accountable for their actions. Legal action should be considered as a last resort after all other avenues of resolution have been exhausted.


Addressing cheating or fraud in a partnership can be emotionally and legally complex. Professional help can also provide an objective perspective and help navigate the legal aspects of addressing cheating or fraud. Advisers can offer insights into the best course of action, potential risks, and the likelihood of success.


Professionals can see things that may not be obvious to you. Engaging the services of professionals with expertise in business partnership issues early can greatly assist in achieving a fair and satisfactory resolution.

Call to Action:

Protect your business and partnership by prioritizing trust and vigilance. Regularly communicate with your partner, If you suspect your business partner of cheating or unethical behaviour, addressing your concerns openly and honestly is crucial. In many cases, denials will be the first reaction Consider discussing the matter with them directly but have your ducks lined up so that you understand that if your business partner has been undertaking actions that are detrimental to you, you have a plan as to what to do next.


Invariably cheating in a partnership is irreparable, and a solid exit plan for you to salvage any undermining or financial loss is imperative for a successful outcome. As a small business accountant we can assist you in developing a plan with an outcome that protects your interests and sanity.


#cheating #trustinbusiness #businessowners #exitplanning #businessdisputes

August 2023 – Client Newsletter

Enjoy the read! This month our newsletter contains tax issues such as:

  • Tax debt & why do I have one?
  • Gifting to employees – is this FBT?
  • R&D – the basics
  • Super withdrawals – what are my options?
  • Should I have a Family Trust?

Click here to download our August Newsletter

Contact us on 03 9597 9966 if you have any questions relating to matters raised in any of our Client Newsletters.

Dumb ways to get a tax audit !

A tax audit is often a result of business owners not doing something that’s the norm. Doing dumb things that alert the ATO that some things are not quite right.

It is becoming imperative that you prepare your GST records appropriately to avoid unnecessary scrutiny by the Taxation Office which may lead to a tax audit for your Bas. These include:

 Failure to allow for car expenses for vehicles that are used partly for business purposes.
 Claiming all the GST paid on the following expenses: (similar to last year )
o car operating expenses, a log book must be kept
o home electricity, – diary evidence floor area
o home rates,
o internet access and
o home telephone bills,

Partial Business Usage

When these items were only used partly for business purposes claim only part of GST. If you use computerised accounting software be careful with this one, as special procedures are required.
 Claiming GST on non-business items.
 Claiming all GST or not claiming GST when not applicable
o Most bank charges. Merchant fees charged by banks, for retailers to have credit card facilities, do have GST in them. Refer to the monthly merchant statement for the GST amount.

GST amounts are often not shown on normal bank statements.
o Motor Vehicle Registration fees.
o Stamp duty and most government fees.
o Rates on business premises.

Sales and GST

 Not charging GST on all sales – NOT RECORDING ALL GST ON SALES
 Not charging GST on the Sale of equipment

Partial GST

Assuming the GST is exactly one-eleventh of every amount paid. This assumption is not correct in the case of :
o Workers Compensation premiums, (which include GST-free stamp duty)
o Yellow Pages Advertisements paid by instalments, which often require all the GST to be paid “up-front”.
 Failure to put the correct “tax codes” on receipts or payments when using a computerised accounting system

Take some time to understand what the codes are and the types of income/expense which each tax code should be used for. As a small business tax accountant, we can help you get it right.

 Using “Cash accounting” when should be “accrual accounting”.
 Not including “Instalment Income” for PAYG or using the correct rate.

Spending the time to get some of these rights may help you to avoid a tax audit and the ATO snooping around into your affairs

estate planning

Our Guide to Managing a Deceased persons Tax Return

Lodging a final Deceased persons Tax Return is one of the important things to do when managing someone’s final affairs. Dealing with the loss of a loved one is a deeply emotional and challenging time. Beyond grief and sorrow, there are often a number of administrative tasks to navigate. One of these tasks is managing the deceased person’s tax return. It’s a task that can seem daunting, especially if you’re unfamiliar with the tax system. However, understanding the process can make it less overwhelming. We as Accountants that specialise in this area can help.

In the Australian context, the taxation obligations of a deceased person don’t simply disappear upon their death. These obligations can transfer to their legal representative or the executor of their will.
. It is a crucial step in finalising the deceased’s affairs and ensuring compliance with the Australian Taxation Office (ATO).

Understanding a Deceased Person’s Tax Return in Australia

When a person dies, their tax obligations do not automatically cease. Rather, these obligations transition to their deceased estate. This means that any income earned from the day after the person’s death until the end of the financial year must be declared in the deceased person’s tax return.
In general, a deceased person’s tax return is prepared like a living person’s tax return. This includes all forms of income, deductions, and tax offsets until the date of death. However, there are some specific rules and regulations related to the taxation of deceased estates. These include the treatment of superannuation death benefits, capital gains tax, and the taxation of testamentary trusts.


Legal responsibilities for managing a deceased affairs

The responsibility for managing a deceased estate’s tax falls primarily to the legal representative. This can be the executor of the will, an administrator appointed by the court, or a trustee.
The legal representative is responsible for lodging the deceased person’s tax return from the start of the income year until the date of death. They must also lodge a tax return for the deceased estate for any income earned after the date of death by the estate.


In addition to lodging tax returns, the legal representative must also pay any tax owed. They may use the assets of the deceased estate to do this. It’s important to understand that as a legal representative, its your role to ensure that all tax obligations are met.


Who is responsible for filing a final tax return for the deceased person?

The executor of the will, or the court-appointed administrator, or the trustee is responsible for filing thedeceased persons final tax return for someone who has died. This individual is often called the legal personal representative (LPR), . Their role is to manage the deceased’s tax affairs.


The LPR’s tasks include notifying the ATO about the person’s death. It also involves gathering all necessary financial information, preparing, and lodging the deceased person’s tax return, and paying any outstanding tax from the estate’s assets.

We recommend working slowly through the issues. Don’t be pressured by beneficiaries keen to get their hands on the money.


Steps in filing a deceased person’s tax return

Filing a deceased person’s tax return involves several steps.

First, the legal representative should notify the ATO about the death.

This can be done by sending a copy of the death certificate, along with a written notice, to the ATO. Though often the ATO gets notified by other sources such as birth death and marriages.

Next, the representative should gather all necessary financial information. This will likely include bank statements, investment reports, and details of any superannuation funds. The data will be used to prepare the deceased person’s tax return.

The third step involves completing the tax return. Therefore after the tax return has been lodged, the representative must then pay any outstanding tax before making final distributions


Remember, these steps can take time and require attention to detail. It’s crucial to stay organised and keep accurate records throughout the process.

Common issues in managing a deceased estate’s tax return


Managing a deceased person’s tax return is not always straightforward. Various issues can arise, complicating the process.


One common issue is incomplete or missing financial records. This can make it difficult to accurately complete the tax return. In such cases, the legal representative may need to contact banks, investment companies, and other institutions to obtain the necessary information. Always plan by actively undertaking Estate planning so that when you die some of the complexity is ironed out.


Another common issue is the complexity of the deceased’s financial affairs. If the deceased had multiple income sources, substantial investments, or owned a business, the tax return could become quite complicated. In these situations, it might be necessary to engage professional help.

Being an executor can be a big responsibility. However, with a basic understanding, organisation, and patience, it can be managed effectively. Take time to work through the processes and reach out if you need guidance along the way.



July 2023 – Client Newsletter

As we start the New Financial Year, this month our newsletter contains topics including:

  • Small Business Lodgement Amnesty
  • Is it time to restructure my Business?
  • SGC increase to 11% for Employers to pay
  • Work-related car expenses updated

Click here to download our July Newsletter

Capital Gains Valuation – often done retrospectively.


When do you need a Capital Gains Valuation. Selling your home or acquired property through inheritance, demolishing a home or rental for property development gst matters, you may need to obtain a retrospective valuation capital gains property report.

The capital gains report may be referred to as backdated property valuation or a capital gains valuation.

The property valuation will outline the property market value at a specific time in the past by a certified valuer. This assists you with helping you work out your capital gains tax liability by providing a market value at a specific date required.

The Tax Office will require the taxpayer to have acquired a capital gains tax property valuation report to establish the correct capital gain made on the sale of their property in some circumstances. This Valuation, in many cases, forms the basis for the cost base of the property.

A Valuer, using historical data, knowledge, and historical facts will be able to provide you with a valuation that can be used on a specified date. Failing to provide such evidence may result in the ATO using their own Valuation methodology and not necessarily coming up with the expected result you desire.

Many years ago, the ATO would accept a one-liner on a real estate agents letterhead. This now is not the case, and the Valuation must be substantiated to provide an accurate figure.

Check with us to determine what date you require and why before engaging with a valuer. We have no alliance with the following Valuers, but we are aware our clients have used these businesses in the past:

http://www.insightproperty.com.au
http://www.duotax.com.au/property-valuations

Recording obsolete stock in your accounting system

Identifying and recording obsolete trading stock write-offs for a small business involves several steps.

Its that time of year, when you should undertake you annual stock take. We suggest to be practical in your approach. Use scales and estimates for small items such as screws , widgets and small items.

A practical approach – obsolete items.

Here’s a general guide on how to approach this process:

  1. Identify the stock items: Begin by reviewing your inventory records and identifying any old trading stock that needs to be written off. Look for items that are damaged, expired, obsolete, or unsellable due to other reasons.
  2. When doing a stocktake, use round stickers (i.e. red dots) or straws to identify those items that you have counted.
  3. Assess the value: Determine the value of the stock items that need to be written off. This can be done by assessing their original purchase cost, current market value (if applicable), or any other relevant valuation method.
  4. Document the write-off: Maintain proper documentation for the write-off. This should include details such as the date, description, quantity, unit cost, and total value of the stock items being written off. Store this information for future reference, especially for tax and audit purposes.
  5. Update inventory records: Adjust your inventory records to reflect the write-off. This helps ensure accurate reporting and tracking of your remaining stock items.
  6. Tax considerations: See Geoff and his team

Remember, if need help contact us .

You should combine your stocktake with a sales budget that should be done for coming year

Once you have undertaken your list let us know and we will help you record it in your accounting system. Happy new financial year.

sabotaging your business

Are you inadvertently sabotaging your small business?

Sabotaging your business can happen in several ways. It’s a silent killer of businesses for growth and success. It’s like wood termites that infiltrates behind the framework of your home as a result when finally uncovered it results disastrously.

Where on the surface, a business can look amazing. Sillly things people do can turn a business into a disaster. So are you quietly sabotaging your business?

The other day I visited a modern-looking café. At the cafe the staff allocated me a table. However they failed to clean it resulting in us having to move the dirty dishes of ourselves. Only a small thing but bad service. Then after we finally ordered a coffee, it came in paper cups . The staff apologized, stating they had run out of cups. Though more likely lack of cups probably they weren’t clearing the tables and understaffed was the main reason for poor service and delivery.

Well, the outcome was a big nar. Next time we will go somewhere else; the poor service sabotaged customer service and what had the hallmarks of an excellent place for a coffee.

How and why people sabotage their business !

While it is unfortunate, there are several ways in which a business owner may sabotage their own small business. As a result here are a few common examples of what we see as pure an unecessary self sabotage of a business

Poor financial management is a killer for a small business . Failing to keep track of finances, not budgeting properly, or mishandling funds can quickly lead to financial problems and the downfall of a small business. Disregarding the ATO debt and even following up with your own debtors will as result lead to a cashflow disaster.

Fail to plan and lack of strategy. Not having a clear business plan, neglecting market research, or failing to adapt to changing trends can hinder growth and sustainability. Without proper planning and strategy, businesses may struggle to compete and survive. This includes exit planning.

Ineffective marketing and branding marketing efforts or a lack of brand development can make it difficult for a business to attract customers. Neglecting to promote the business effectively or failing to build a strong brand identity can lead to limited visibility and diminished customer interest. Unable to project your vision means you may not be attracting the right customers.

The big killer and one that can be easily fixed!

Poor customer service is a massive sabotage for a small business. Failing to prioritize customer satisfaction can damage a business’s reputation and result in lost customers. Ignoring customer feedback, providing subpar service, or not addressing customer concerns promptly can lead to negative word-of-mouth and a decline in sales.

The final one that impacts a business is Internal conflicts and mismanagement: Disagreements among business partners, ineffective leadership, or a toxic work environment can create internal conflicts that distract from the company’s goals. Poor communication, lack of accountability, or an unproductive work culture can impact by undermining employee morale and overall business performance. A toxic environment is a bad business.

A strategy for you to build growth.

Developing your growth and exit plan needs careful planning. A business owner’s reluctance to adapt and lack of resilience can unknowingly sabotage the business. A business owner must adapt rapidly to a changing business landscape. Sometimes the inability to adjust to market trends, consumer demands, or industry disruptions can lead to business failure.

Resilience, flexibility, and a willingness to embrace change are essential for long-term success.
Part of what we do for our clients is help them plan. For growth Growth, prepare for change and plan for an eventual exit.

As a Chartered Accountant and business adviser, we help you through the journey. Ask these questions if you are at a fork in your business journey pathway.

  • Am I happy with my business and my lifestyle?
  • Is it time to consider if the business still lights my passion or am i over it?
  • If your business faces change or uncertainty, are you prepared for it or ignoring it will sabotage the business.
  • What are my options now and into the future concerning my role and ownership in the business?

Any decision about business direction needs to be quietly evaluated. Sometimes not stopping and assessing you and your business as a package is a sure way to sabotage the business. Move forward with confidence by having a plan that works for you with a clear direction that make your business a winner.

Gst at property settlement is a cashflow trap for those mum and dad developers.

GST at property settlement is a tax that needs to be deducted at settlement. It continues to catch out Mum and Dad developers walking the cashflow-type rope. Many are not aware that they will only have effectively 90% of the sale at settlement to play with. This can cause pain as interest rates bite and property prices decline in some areas.

Since July 2018, you may need to pay GST at settlement if you are selling or buying new residential premises or potential residential land. How GST is paid for certain property transactions affects purchasers, suppliers, and their financiers. For those non-residents, there is a further hit of non-resident withholding tax.

What is remitted at gst at property settlement

In essence, the purchaser must remit 10% (being GST) or 7% withholding GST margin scheme to MR ATO at settlement. This is regardless of if there is a first mortgage on the property.

A reconciliation of the final GST is done in the vendor’s next BAS and any amount payable or refundable is collected then. This puts the ATO squarely in the front of the cash handouts and leaves the balance scrambling. Those who rely on making a deal with the ATO for a repayment plan are unable to do so, and potentially if things a tight, a vendor could come out short.

Some penalties will apply if the Vendor fails to provide the required Notice or fails to notify the Purchaser of the required details.  If either occurs, a penalty of $21,000 would be payable. This assumes the Vendor is an individual and maybe five times that if a corporate entity is involved.  The ATO can catch up with people using its data-matching systems.

There is no requirement for Purchasers to be registered for GST.

GST withholding notification.

Before the settlement of GST property settlement, a GST property settlement withholding notification needs to be completed. This needs to be lodged online to the ATO; a conveyancer or legal representative can do this on the Purchaser’s behalf. This Form needs to be completed as soon as possible, and the ATO will provide a unique payment reference number (PRN) and lodgement reference number (LRN).

Once settlement has occurred, the GST property settlement date confirmation. The form must be completed with the unique PRN and LRN provided by the ATO.

Don’t panic a purchaser does not have to pay a GST withholding amount at the time when they deliver a genuine deposit on the property paid or the deposit is forfeited.

GST complications

Should it be found that the deposit is not a genuine deposit, it will be treated as part of the consideration for the supply. This means the purchaser may be required to pay a GST withholding amount on or before paying the vendor’s deposit.

Some developers think we can avoid the 10% withholding regime. They try this using an instalment contract. Under this arrangement, when the purchaser pays the purchase price balance. Instalment contracts mean that the first payment under an instalment contract is the first day the purchaser pays any of the consideration for the supply. Therefore, the purchaser must pay the GST withholding amount on, or before, the day they provide this first instalment payment. GST withholding amount to be paid.

Again, if instalments extend over 12 months, the ATO gets their money well before full settlement.

Under these rules, the ATO gets paid first. If liquidation occurs, the Bank may be short of its loan as the ATO has snaffled the first 10%. Effectively, the Bank will argue that the ATO has received a preferred payment. Then the Bank will chase the 10% from the Vendor who, in most cases, guaranteed the loan. This is important to note if the development goes into liquidation. It also may delay settlement as the Bank will not release a clear title.

Be ready to remit gst at property settlement.

As a seller, get your ducks lined up early. This will ensure you can proceed smoothly toward settlement. Make sure you have enough money to clear the title. If not, consider delaying the settlement and finding the potential shortfall or consulting a professional insolvency expert for advice on your actions.

June 2023 – Client Newsletter

As we end this Financial Year, this month our newsletter contains topics including:

  • Tax Planning strategies at year end for Small Business
  • SMSF Client Webinar
  • Work related deductions
  • Rental property deductions
  • Seniors Health Card
  • Hobbies and tax
  • Maximising cashflow

Click here to download Newsletter

SMSF 2023 Client Webinar

Regulatory Changes: The Australian government frequently reviews and updates regulations related to SMSFs. SMSF trustees must stay informed about changes to compliance requirements, reporting obligations, investment restrictions, or contribution caps.


What we will cover
• New Labour Government – whats changing after the May 2023 Budget

• Investment Strategy Compliance: SMSFs must have an investment strategy that aligns with the retirement goals and risk profile of the fund’s members

Limited Recourse Borrowing Arrangements (LRBAs): LRBAs allow SMSFs to borrow funds to invest in property or other assets. However, there are specific rules and restrictions around LRBAs, and trustees must ensure they comply with these regulations to avoid penalties or possible disqualification of the fund. Review

Contributions and caps – what can I contribute and the work test

Valuation of Assets: SMSFs must report their assets’ market value each financial year. What Trustees need to do.

What the Super Fund auditor looks for

Cybersecurity and Data Protection: With the increasing reliance on technology, SMSFs are exposed to cybersecurity risks. Trustees should implement robust security measures – discussion scams and how to protect your data.

When a Self-Managed Superannuation Fund (SMSF) member passes away, several important considerations exist for the fund and its trustees. Here are some critical points regarding SMSFs and death:

Trust Deed and Member’s Will – is your aligned

Taxation of Death Benefits: Depending on various factors, including the age of the deceased member and the recipient, death benefit payments from an SMSF may be subject to taxation. Tax treatment may differ between dependents and non-dependents, and it is crucial to understand the applicable tax rules and seek professional advice. – let’s discuss

Reversionary Pensions: If the deceased member passes, does this help in the estate planning process

Death Benefit Nominations: SMSF members can make binding or non-binding death benefit nominations. Should I do one?

Trustee Succession Planning: SMSF trustees need to have a succession plan in place in case of the death or incapacity of a member/trustee.

Downsider strategy – how it can help me?

Super above 3 million balance, or if one partner dies and it pushes you over – what should you do?

Let us know if you can join us either in person or online via zoom !
Essential for all those who run and operate an SMSF, both using our services or other professionals. All welcome!
Please RSVP to Chris @ chris@gartlyadvisory.com.au

Budget Edition Newsletter  – May 2023

Enjoy our Federal Budget summary Newsletter which includes:

  • Superannuation is to be paid with wages – starting from 2026
  • Instant asset write-off, down to $20k
  • GDP adjustment factor
  • Superfund non-arms length expenditure review new rules
  • ATO compliance program – more strength to collect taxes and keep you on your toes
  • Some free tickets for non-lodgers of returns in getting their taxes up to date with some penalties waived
  • New taxes with large superannuation balances

Take a look at our Newsletter here

Reach out to us if you need clarification on any budget matters.

May budget month

May 2023 – Gartly Newsletter

Enjoy the read! This month our newsletter contains tax issues such as:

  • Temporary Full Expensing ceases in July
  • Federal Budget – what to expect
  • Latest developments in Trust distribution
  • SMSF changes from July 2023
  • Which option to finance my new car?

Click here to download Newsletter

Estate Planning and SMSF : Leveraging the Power of SMSF

Estate planning and SMSF can play a large role when it comes to Estate planning, which is an often-overlooked aspect of financial planning when executing your Will, superannuation, and wishes.

Estate planning determines how your assets will be distributed once you pass away. However, estate planning can be complicated and overwhelming, which is why Self-Managed Super Funds (SMSFs) have become popular.

SMSFs are a powerful tool for estate planning and managing your retirement savings.
Whether you’re new to estate planning or simply looking for a more efficient way to manage your assets, leveraging the power of SMSF can help you achieve your financial goals and ensure that your assets are distributed according to your wishes.

estate planning

Understanding SMSF and its benefits for estate planning

SMSF is a type of super fund that is managed by its members. It provides more flexibility and control over your retirement savings compared to the public APRA super funds. SMSFs can invest in a wide range of assets, including property, shares, and managed funds. This makes them a popular choice for those who want to take a more active role in managing their retirement savings and buy property direct.

Estate planning and SMSF provide benefits for estate planning that should not be overlooked. Unlike other super funds, SMSF members have more control over how their assets are distributed after their passing. With an SMSF, you can nominate who receives your benefits and how they are distributed. This means your assets can be distributed according to your wishes, which can provide peace of mind for you.

SMSF vs. other estate planning options

An SMSF forms part of a structure to manage your estate planning wishes. This, combined with your wills, a family trust and other measures, ensure the correct outcome.

SMSFs also provide tax benefits for estate planning. For example, assets held in an SMSF are not subject to capital gains tax (CGT) when they are sold after the member’s death. This can provide significant tax savings for your beneficiaries.

Creating an estate plan using SMSF

Creating an estate plan using SMSF involves several steps.

We first must look at the Fund’s assets and the members’ wishes. Look at the age and composition of your SMSF . Are there others in the Fund that may continue after your death?


Those in pension mode may choose to allow the Death Benefits to be rolled over to a remaining dependent in the fund via the use of a reversionary pension. The advantage to this is that the benefit does need to come out of Super.


Other members may choose to prepare a binding death benefit nomination (BDBN). This legal document specifies who will receive your benefits and how they will be distributed after your passing.
When creating a BDBN, it’s important to consider the needs of your beneficiaries. For example, you may want to provide for your spouse’s retirement needs or ensure that your children receive an education. You should also consider the tax implications of your estate plan and how they will affect your beneficiaries.
Once you have created a BDBN, you should review it regularly to ensure it still reflects your wishes. You should also keep your beneficiaries informed of your estate plan so they know what to expect after your passing.

Understanding who is a dependent for Superannuation purposes

Under the Superannuation Industry (Supervision) Act 1993 (SIS), benefits may be paid to one or more of the member’s dependants or their legal personal representative (LPR), i.e. the estate, subject to the fund’s governing rules.(check Trust Deed)

A dependant for these purposes (known as an SIS dependant) includes:
• the member’s spouse – legally and de facto
• the member’s child (of any age), and
• someone with whom the member has an interdependency relationship (generally someone with whom the member has a close personal relationship and lives, and where one or each of them provides the other with domestic support and personal care).

A “SIS dependant “also includes someone who is a dependant within the ordinary meaning of that term (an ‘ordinary meaning’ dependant), such as a person who may not be a spouse or child but who depends on the member financially. If an individual is not an SIS dependant, they can only receive a member’s death benefits via the deceased member’s estate.

Common mistakes to avoid in SMSF estate planning

There are several common mistakes to avoid when creating an estate plan using SMSF.

These mistakes include:
• Failing to create a BDBN: Without a BDBN, your benefits may not be distributed according to your wishes.
• Failing to understand who may control your SMSF after your death.
• Failing to have your Trust Deed updated regularly and referring to this in the Estate planning process.
• Best practice is to have a corporate trustee
• Failing to set up the right pension and the conflict between DBBN and reversionary pension.
• Failing to recognize who is dependent vs nondependent.
• Failing to review your estate plan regularly: Your circumstances may change over time, so it’s important to review your estate plan regularly to ensure it still reflects your wishes.
• Failing to keep your beneficiaries informed: Your beneficiaries should be informed of your estate plan, so they know what to expect after your passing.

Choosing the Right Accountant for estate planning

Choosing the right SMSF provider is important for estate planning. You should look for a provider that has experience in estate planning and can provide professional advice.
Our role at Gartly Advisory is to help advise Trustees in the Estate Planning process.
In many cases, we will assist the Trustee in the decision process of whether it is appropriate to wind up the SMSF and to be strategic about their estate planning and smsf.

SMSF estate planning checklist

To help you create an estate plan using SMSF, here’s a checklist of things to consider:
• Create a BDBN and make sure your will works in conjunction with your super strategy
• Review your estate plan regularly.
• Brief your POA and appointer legal representative of your wishes post death as they should be appointed to your SMSF to act post death
• Keep your Deed up to date.• Keep your beneficiaries informed.
• Consider the tax implications of your estate plan
• Choose the right SMSF provider
Estate planning should not be overlooked.

By leveraging the power of SMSF, estate planning can give estate planning control over your retirement savings and can be used to create a tax-efficient estate plan. Peace of mind knowing that your superannuation ends up with the right loved ones is a powerful aspect of having an estate plan.

business plan

How can I make my small business successful?

How can I make my small business successful is something all business owners strive to do. The road to success is not always smooth, and there are obstacles to overcome. However, with the right strategies and mindset, you can achieve your goals and thrive in today’s competitive marketplace.

In this article, we’ll explore some key tips and tactics that can help you take your small business to the next level. From defining your niche and target audience to creating a strong brand and building a solid online presence, we’ll cover everything you need to know to make your small business a success.

Defining my small business successful vision


Before we dive into the strategies that can help your small business succeed, it’s essential to understand what success means to you. Success means different things to different people, and what may be considered successful to one person may not be to another. For some, success may mean financial independence, while for others, it may be the ability to make a positive impact in the world.
Regardless of what success means to you, it’s crucial to have a clear idea of what you’re aiming for. Setting clear goals and objectives will help you stay focused and motivated as you work towards achieving your vision. It’s also essential to track your progress regularly and make adjustments where necessary.

The importance of a business plan

Having a solid business plan is essential for any small business growth. A business plan is a written and outlines your business goals, strategies, and financial projections. It serves as a roadmap for your business and helps you stay on track as you work towards achieving your goals.
A business plan should include a description of your business, your target market, your competition, your marketing strategy, and your financial projections. It should also outline your unique value proposition and how you plan to differentiate yourself from the competition.
A well-crafted business plan can help you secure funding, attract investors, and make informed decisions about the direction of your business. Our team can help you here.

Understanding your target audience

Knowing your target audience is crucial for the success of your small business. Your target audience is the group of people who are most likely to buy your product or service. Understanding their needs wants, and preferences are essential for creating a marketing strategy that resonates with them.

Once you have a clear understanding of your target audience, you can tailor your marketing messages, product offerings, and customer service to meet their needs.

Developing a unique value proposition

A unique value proposition (UVP) is what sets your business apart and helps with small business growth. It’s the reason why customers should choose your product or service over others. Your UVP should be concise, clear, and compelling.

To develop a UVP, start by identifying your target audience’s pain points. Then, think about how your product or service can solve those problems or meet those needs. Your UVP should communicate the benefits of your product or service in a way that resonates with your target audience.
Your UVP should be prominently displayed on your website, marketing materials, and social media

channels. It should be a key part of your brand identity and messaging.

Building a strong brand identity


A strong brand identity is essential to make a small business successful. Your brand identity is how your business is perceived by your target audience. It includes your logo, colour scheme, messaging, and overall aesthetic.

To build a strong brand identity, start by defining your brand values and personality. Think about what you want your brand to represent and how you want to communicate with your target audience. Your brand identity should be consistent across all your marketing materials, from your website to your social media channels.

Crafting a marketing strategy

A marketing strategy helps in reaching and engaging with your target audience. It is the fertaliser for small business growth. It includes the tactics and channels you’ll use to promote your product or service. A marketing strategy should be tailored to your target audience and should align with your business goals.

Leveraging technology to streamline operations

Technology can be a powerful tool for streamlining your business operations and improving efficiency. There are many software solutions available that can help you automate tasks, manage inventory, and track customer data.

Investing in a customer relationship management (CRM) system can also help you keep track of customer interactions and improve customer service. A CRM system can help you identify patterns in customer behaviour and tailor your marketing messages to their needs and preferences.

Managing finances, and taxes effectively find a good small business accountant

Managing your finances effectively is crucial in making your small business successful. It’s essential to keep track of your income and expenses, create a budget, and plan for unexpected expenses.
Investing in accounting software can help you automate financial tasks and generate reports that provide insight into your business’s financial health. At Gartly Advisory we love working with small businesses. It’s important to work with an accountant advisor who can help you make informed decisions about managing your finances, taxes and your future.

Understand where you are in areas such as:

  • Taxes
  • Profitability
  • Your future
  • And the value of your business

Take our 13-minute in-depth Value Builder quiz and get your free report

Continuously adapting and evolving


Lastly, it’s important to remember that making your small business successful is not a one-time event. It’s a continuous process of adapting and evolving to meet the ever-changing needs of your target audience and the marketplace.

Building a successful small business takes hard work, dedication, and a bit of strategy. By defining your niche and target audience, developing a unique value proposition, building a strong brand identity, and crafting a marketing strategy, you can create a business that resonates with your target audience and stands out from the competition.

Leveraging technology to streamline operations, building a strong team, managing finances effectively, and continuously adapting and evolving can help you stay ahead of the curve and achieve your business goals. Remember, success is not a destination; it’s a journey. Stay focused, stay motivated, and keep moving forward.

April 2023 – Gartly Newsletter

Welcome to our April 2023 Newsletter. Our newsletter this month contains tax issues such as :

  • Clarity on Trust Distributions
  • the new rules on $3m Super balances
  • Electric cars exempt from FBT
  • How to Spot a Crypto Scam
  • GST Audits and How to avoid them
  • How to find lost Super

Press here to access our latest newsletter

Paying a Franked Dividend

Should I Pay a Dividend from my company or Keep the Profits in My Company?

Dividend vs keeping the profits in retained earnings

Should I pay a dividend from my company? When it comes to running a successful business, one of the most important decisions you’ll have to make is what to do with your profits. Should you pay a dividend to yourself as the business owner, or reinvest the money back into the company? It’s a question that many business owners struggle with, and there’s no one-size-fits-all answer.

We argue that paying dividends is a great way to reward the owners.

Others believe that reinvesting profits is the key to long-term growth and success. In this article, we’ll explore the pros and cons of both options, so you can make an informed decision that’s right for your business.

Understanding Dividends and How They Work

First, let’s define what a dividend is. A dividend is a payment made by a company to its shareholders, usually in the form of cash or additional shares or allocated to the loan account. Dividends are paid out of a company’s profits and are distributed on a regular basis, such as quarterly or annually.

There are different types of dividends, such as regular dividends, and special dividends.

Regular dividends are the most common type and are paid out on a regular basis. Special dividends are a one-time payment made by the company, usually when the company has extra profits. Stock dividends are paid in the form of additional shares of stock instead of cash.

Pros and Cons of Paying Dividends to Shareholders

Now that we know what dividends are, let’s explore the advantages and disadvantages of paying dividends to shareholders.

Advantages of Paying Dividends

One of the main advantages of paying dividends is that it can be a great way to reward you as the owner. Shareholders receive a share of the company’s profits, and this can help to attract new investors and retain existing ones.

Importantly paying dividends reduces Retained Earnings. This reduction in retained earnings for a small business helps :

  • The flow of profits for tax purposes
  • The impact of holding too much capital that exposed if there is a legal claim against the company.

Disadvantages of Paying Dividends

One of the main disadvantages of paying dividends is that it can limit the company’s ability to reinvest in the business. When a company pays a dividend, it’s taking money out of the company that could be used to fund growth initiatives or invest in new projects. If the company doesn’t have enough cash to fund these initiatives, it may need to raise additional capital through debt or the owners lending money back

Another disadvantage of paying dividends is that it can create expectations among shareholders. If a company pays a dividend, shareholders may expect the company to continue paying dividends in the future.

Advantages and Disadvantages of Keeping Profits in the Company

Now, let’s explore the advantages and disadvantages of keeping profits in the company, rather than paying dividends.

Advantages of Keeping Profits in the Company

One of the main advantages of keeping profits in the company is that it allows the company to reinvest in the business. By reinvesting profits, the company can fund growth initiatives, invest in new projects, and improve its products or services. This can help to increase the value of the company over time and attract new investors.

Keeping profits in the company can also help to reduce the company’s reliance on external financing. If the company has enough cash to fund its growth initiatives, it may not need to raise additional capital through debt or equity financing. This can help to reduce the company’s debt load and improve its financial health.

Disadvantages of Keeping Profits in the Company

One of the main disadvantages of keeping profits in the company is that it can inhibit profit reward and extraction. If the company doesn’t pay a dividend, shareholders won’t receive a share of the profits in the short term.

As the owner this has 2 serious disadvantages

  • NO reward in short term for your hard work
  • Taxation – distributing in a regular method allow better tax planning
  • Not declaring a divided but still taking the money may create a DIV 7a loan – not advisable

Another disadvantage of keeping profits in the company is that it can create excess cash that isn’t being used effectively. A business owner should have a clear plan for how to reinvest its profits. If not, it may be better to distribute the profits to shareholders in the form of a dividend.

Finally take profits as you go and dont leave it for someone else if something goes wrong ie liquidation or legal action . Paying out dividends is like passing the gate way of no return. Be careful though as declaring a dividend with poor trading can lead to insolvent trading!

Criteria for Deciding Whether to Pay Dividends or Keep Profits

Let’s look at some criteria for deciding which option is best for your business.

Analyzing the Financial Health of the Company

One important criterion for deciding whether to pay dividends or keep profits in the company is the financial health of the business. If the company is financially stable and has excess cash, it may be a good idea to pay a dividend. However, if the company is in a growth phase and needs to reinvest profits to fund growth initiatives, it may be better to keep the profits in the company.

Considering the Company’s Growth Potential

Another important criterion is the company’s growth potential. If the company has a high growth potential, it may be better to reinvest profits in the business. Thereby funding growth. However, if the company doesn’t have many growth opportunities, it may be better to pay a dividend . Reward shareholders and extract the excess cash from the business.

Evaluating the Shareholder’s Preferences

Finally, it’s important to consider the preferences of the company’s shareholders. Some shareholders may prefer to receive a dividend, yet the other business owner may prefer to see the company reinvest profits in the business. It’s important to understand the preferences of the company’s shareholders and make a decision that’s in their best interests.

Look at the Franking account as a small business and see how this may impact your future tax liability personally. Remember declaring a franked dividend have credits attached. However, while tax is paid with the lowering of the company tax rate there may be top-up tax payable

Top-up tax is effectively the shortfall of tax that may be incurred in the event that a shareholder is on a higher tax rate ie tax credits typically for small business is @ 25% but you may have taxpayers on higher rates such as 32.5% and beyond

Conclusion and Final Thoughts on the Dividend vs. Profit Debate

In conclusion, the decision to pay a dividend or keep profits in the company is a complex one that requires careful consideration of the company’s financial health, growth potential, and shareholder preferences. While paying dividends can be a great way to reward shareholders and attract new investors, reinvesting profits can be the key to long-term growth and success. Ultimately, the decision will depend on the unique circumstances of each business. By weighing the pros and cons of each option and considering the criteria outlined in this article, business owners can make an informed decision that’s right for their company.

Business plan

A Simple Business plan that works

Unveiling the Power of a simple Business Plan for small business is Your Blueprint to Success

A Simple business plan for small business helps you dream big! Are you an entrepreneur or business owner aiming to achieve success in your ventures?

Do you find yourself constantly facing setbacks and challenges that just make it a little harder hinder your growth? The solution is in the power of a well-crafted simple business plan that kicks goals. A small business action plan is a blueprint that outlines your goals, strategies, and tactics to achieve success. It is your roadmap to success and helps you stay on track towards achieving your objectives.

A well-written and EXECUTED business plan not only helps you secure funding but also provides clarity and direction for your team.

So, let’s dive in and discover how a business plan can be your key to unlocking success in your business.

4 reasons Why every small business needs a simple business plan


A simple business plan is essential for every business, no matter how big or small. It provides a clear understanding of your business goals and objectives, outlines the strategies you will use to achieve them, and helps you identify potential obstacles and solutions. Without a plan, you risk losing focus and direction, making it difficult to achieve your goals.
You need a business plan for several reasons:

  1. Setting goals and objectives: A business plan allows a small business to establish clear goals and objectives for the company, including financial targets, growth milestones, and other key performance indicators. This helps the business owner to focus on what needs to be achieved and how to get there.
  2. Attracting funding: If a small business needs external funding, such as a loan or investment, a business plan is essential. It provides potential investors or lenders with a clear understanding of the business’s goals, strategies, and financial projections, which helps them determine whether or not to invest in the company.
  3. Identifying potential challenges: A business plan forces the business owner to think about potential challenges that the company may face and how to address them. This helps the business owner to be prepared and to have contingency plans in place.
  4. Making informed decisions: A business plan helps the business owner to make informed decisions about how to allocate resources, such as time and money. By having a clear understanding of the company’s goals and objectives, the business owner can prioritize tasks and investments more effectively.

You plan is a communication tool that helps share the your vision, mission, and values with employees, customers, suppliers, and other stakeholders.

Its your roadmap for the business future and helps everyone involved to understand their role in achieving the your set goals

The process of planning will help you identify your target audience! For you to know your competition, and develop a comprehensive marketing strategy. It is a tool that provides a roadmap for your team to follow. Action by setting realistic goals, measure your progress, and make adjustments as needed to ensure your success.

In short, a business plan is the foundation of your business. It provides a clear understanding of your business goals, identifies potential obstacles, and outlines the strategies you will use to achieve success.


Different types of business plans

There are several different types of business plans, each with its own purpose and audience.

Traditional Business Plan
A traditional business plan is a comprehensive document that outlines every aspect of your business, from your mission statement to your financial projections. It is typically used to secure funding, but it can also be used as a tool to guide your business operations.

Lean Startup Plan – recommended – keep it simple but actionable
A lean startup plan is a simplified version of a traditional business plan. It focuses on the essential elements of your business, such as your target market, value proposition, and key metrics. It is typically used by startups that are looking to test their business concept quickly and efficiently.

Internal Business Plan
An internal business plan is a document that is used to guide the operations of your business. It is typically not shared with external stakeholders and is used to keep your team focused and aligned with your business goals.

Strategic Business Plan
A strategic business plan is a long-term plan that outlines your business goals and objectives over a period of several years. It is typically used by established businesses that are looking to grow and expand their operations.

Key components of a business plan:

Executive Summary
The executive summary is the first section of your business plan and provides an overview of your business. It should be concise and compelling, outlining your business concept, target market, and competitive advantage.

Company Description
The company description provides a detailed overview of your business, including your mission statement, history, and ownership structure.

Market Analysis
The market analysis section outlines your target market and identifies potential opportunities and challenges. It should include information on your competitors, market size, and trends.

Products and Services
The products and services section provides a detailed description of your offerings, including their features, benefits, and pricing.

Marketing and Sales Strategy
The marketing and sales strategy outlines how you plan to reach and sell to your target market. It should include information on your advertising, sales, and distribution channels.

Financial Projections
The financial projections section provides an overview of your projected revenue, expenses, and profits over a period of several years. It should also include information on your funding needs and sources.

Management and Operations
The management and operations section provides an overview of your team and their roles, as well as your business operations and processes.

Including these key components in your business plan can help you create a comprehensive and effective document that will guide your business towards success.

YOUR marketing plan

A marketing plan is essential for small business It outlines how to reach and sell to your target market,. It provides a roadmap for your marketing activities. A well-crafted marketing plan can help you to identify your target audience, develop compelling messaging, and choose the right marketing channels to reach your audience.

To create a marketing plan start by identifying your target market. This should include a detailed description of your ideal customer, including their demographics, psychographics, and buying behavior.

Developing financial projections and budgets

Financial projections and budgets are essential. They provide an overview of your projected revenue, expenses, and profits over a period of several years, as well as your funding needs and sources.

To develop financial projections and budgets, start by estimating your revenue and expenses for the coming year. This should include a detailed breakdown of your costs, including fixed and variable expenses.

Next, project your revenue growth over a period of several years. This should be based on your market analysis and sales projections.

Finally, identify your funding needs and sources. This may include loans, investments, or crowdfunding.
By developing financial projections and budgets, you can ensure that your business is financially sustainable and that you have the resources you need to achieve your goals.

We help local businesses in surrounding areas of Ormond, Bentleigh and Brighton to action their projections

Common mistakes to avoid when creating a simple business plan

Creating a business plan can be a daunting task, and it’s easy to make mistakes along the way. Some common mistakes to avoid include:

Focusing too much on the product or service

While your product or service is important, it’s not the only factor that will determine your success. Be sure to focus on other key components of your business plan, such as your target market, marketing strategy, and financial projections.

Ignoring your competition

Understanding your competition is essential to developing a successful business. Be sure to include a detailed analysis of your competitors in your market analysis section.

Overestimating your revenue projections

While it’s important to be optimistic about your business’s potential, it’s also important to be realistic. Be sure to base your revenue projections on market research and sales data, rather than wishful thinking

Neglecting to update your business plan

Your business plan should be a living document that evolves and changes as your business grows. Be sure to update it regularly to reflect changes in your market, competition, and business operations.
Avoid common mistakes, you can create a comprehensive and effective business plan that will guide your business towards success.

Resources and tools to help you on your way

Here are some useful resources and tools include:

Small Business Administration (SBA)
The SBA provides a wealth of resources and tools for small business owners, including business plan templates, financial calculators, and market research tools.

SCORE
SCORE is a nonprofit organization that provides free mentoring and coaching services to small business owners. They offer a variety of resources and tools, including business plan templates and financial planning tools.

LivePlan
LivePlan is a cloud-based business planning software that provides a variety of tools and resources to help you create a comprehensive and effective business plan.


By utilizing these resources and tools, you can streamline the process of creating ensuring that your plan is comprehensive and effective. Get out there and follow your dreams

Renovating and flipping your home for profit . The potential Tax Implications

Renovating and flipping your home can be an exciting and rewarding experience as a homeowner. However, before you embark on a renovation project to sell your home for profit, it’s essential to understand the tax implications involved.

After watching TV shows like the Block, are you inspired to become a property flipper?
In this article, I will explore the basics of renovating and flipping your home, the ATO tax implications, and offer tips to help you maximize your profit while avoiding common mistakes.

The Basics: What is Renovation and Flipping your home?

Renovation is improving or updating your home, either for your enjoyment or to increase its value. This can involve anything from cosmetic changes, such as painting and decorating, to more substantial alterations, such as adding an extension or converting a garage.

Flipping, on the other hand, refers to buying a property to renovate it quickly and resell it for a profit. Flipping can be a lucrative business, but it does come with risk and requires careful planning and execution.

Understanding the ATO Tax Implications for Renovating and flipping your Home for Profit

Renovating and flipping your home is something that can be financially rewarding . When renovating your home for profit, there are several tax implications to consider. Firstly, it’s essential to understand the concept of your main residence and how it affects your tax obligations.

Your main residence is the home you live in. In many cases it is exempt from capital gains tax (CGT) when you sell it. However, suppose you renovate your main residence with the intention of selling it for profit systematically. In that case, you may be liable for tax . This is occurs when it was treated as trading stock due to the renovation business. This can be a complex area, so contact Geoff for professional advice.

What is Main Residence and Why it Matters for Tax Purposes?

As mentioned, your main residence is the home you live. It’s important to note that you can only have one main residence at a time. You must use it as your main residence to be eligible for the CGT exemption.

If you own more than one property, you may choose which one is your main residence. But you must nominate this in writing to the ATO. It’s also worth noting that if you rent out part of your main residence, such as a spare room, you may be liable for CGT on a portion of the sale price.

Renovating and flipping your Home can change you home from tax free to being subject to income tax.

Claiming Tax Deductions for Renovation Expenses

When renovating your home for profit, you may be able to claim tax deductions for certain expenses. These include materials, labour, and professional fees such as architect or engineer costs. However, keeping accurate records of all expenses and seeking professional advice to ensure you are claiming correctly is essential. It’s also worth noting that you cannot claim deductions for expenses that are not directly related to the renovation, such as general maintenance or repairs.

Tax Implications for Selling Your Home After Renovation

When you sell your home after renovation, you may be liable for CGT or income tax on the profit derived. The ATO may treat your activity as a business, and it becomes income of an ordinary nature classified as a business renovation business

Additionally, if you sell your principal residence and meet specific criteria, you may be eligible for the principal residence exemption.

The profit-making activity of property renovations – per ATO
If you’re carrying out a profit-making activity of property renovations, also known as ‘property flipping’, you:
• Must report your net profit or loss from the renovation in your income tax return
• You are entitled to an Australian business number (ABN)
• You may be required to register for GST if the renovations are substantial.

We can assist you here if you unsure what to do next. Call Geoff on 95979966 for a confidential discussion.


You may live in the property as your home for all or part of the ownership period, BUT it does not automatically mean that the profits from the sale are exempt from income tax. The main CGT residence exemption only applies to reduce capital gains; it cannot reduce amounts taxed on the revenue account if the ATO deems you in the property flipping business.

Examples of flipping vs home renos

Jock and Jill buy a house that needs renovation, move in and, over the next six months, renovate it, landscape it and then place it on the market. This is renovating your home to flipping. In the meantime, they acquire their next one and start the same process. The ATO may deem them in the property development business based on the actions and facts.

But on the other hand, the ATO may deem the profit as income as a property flipping business.
Whereas Freddy and his wife buy a house and move in. They slowly renovate and enjoy it as their home. Freddy decides after a few years to sell and buy a bigger one. Provided they meet the CgT exemptions as their principal residence, then the gain on the sale would be exempt

Tips to Maximize Your Profit While Renovating Your Home

To maximize your profit while renovating your home, planning carefully and making informed decisions is essential. Firstly, consider the location and market demand for your property. Renovations well-suited to the local market and adding value to the property are more likely to result in a higher sale price. Setting a realistic budget and sticking to it is essential, as overspending can eat into your profit margin. Finally, consider enlisting the help of real estate agents, builders, and tax experts to ensure you are making the most of your renovation project.

Action – tread carefully when flipping your homes!

Renovating your home for profit can be lucrative, but it’s essential to understand the tax implications involved. By understanding the concept of your principal residence, claiming tax deductions correctly, and seeking professional advice, you can maximize your profit while avoiding common tax mistakes of being a flipper

Is an SMSF setup right for you?

Deciding to implement an SMSF setup is something that needs a plan if undertaken.We are observing that our clients are taking the opportunity to review their Superannuation and retirement goals, The markets are changing, and people are beginning to plan for their retirement strategy.

We are receiving several questions from clients asking whether, given the current market fluctuations of their investment in the superannuation, it is a great time to take charge of your own Superannuation. Some are evaluating if it is a great time to take control by setting up a new Self-Managed Superfund, commonly known as an SMSF.

Investment choices

Clients are considering a range of investments when it comes to their SMSF. These include commercial property, shares, and less conventional investments such as bitcoin as part of their investment strategy. Please do your research for your circumstances and ensure the appropriate Investment Strategy is documented for your Fund.

We can work through with you your strategy to purchase a residential property or commercial property within your SMSF. The key is understanding what restrictions are in place before starting this process.

There are several benefits to being your own Trustee of your SMSF. And hence the ability to run your own Fund. For example, as a Trustee, you can react and manage your superannuation savings. This is because you have greater control and flexibility over your investments. You can take a more hands-on approach to acquire or selling investments within your super fund. This includes responding quickly to opportunities to realign your investment portfolio as the market changes.

But you also need to be aware that being an SMSF comes with the fact that there’s more work for you as a trustee to manage your investments. In doing so, you must ensure you have the expertise and confidence to evaluate your investments. You also need to ensure your SMSF is following its investment strategy. We can certainly assist you here, but you must be prepared to keep records and understand that your SMSF investments are for retirement.

ASIC does not recommend setting up an SMSF with a small balance. Typically a fund should have a combined balance of $200,000 plus to be a viable Fund. You can combine your benefits with other family members, and please discuss with us if this is your option.

Not always easy to be a Trustee

Running an SMSF also takes time and effort. You must ensure that your super fund SMSF is managed properly and that you are achieving returns. As a Trustee, it is also essential to follow the rules there. There are there strict laws within the superfund environment that you, as a trustee, understand. We can help you here to make sure you keep on the right side of the Superannuation laws.

As an SMSF specialist advisor, we can help you to review whether a self-managed super fund is a suitable vehicle for you to establish. We welcome you to make time and discuss your needs in relation to your soft-managed super fund needs and your retirements.

Reach out and contact us:

Our latest PODCAST

For those who may have an SMSF borrowing, our latest podcast may be of interest to you. Join me as we discuss the current landscape for SMSF and borrowing

https://welcome-what-makes-your-business-tick.simplecast.com/episodes/smsf-and-borrowings-the-current-trends-j6judYcO?fbclid=IwAR2E-yPV3fU2Ib-g9gFM7X6LyTslnbAgSQI9orZaIvCNKqx6KWeCNgN8aLE

Cost reduction and Maximizing Profit in Your Business

Cost reduction by reducing expenses means great profits, right or wrong?

What is Cost Reduction & Why Is It Important for Business Owners?

Cost reduction is one of the most important aspects of running a successful business. It can help businesses save money and increase their profits. But doing it correctly will achieve great results for your bottom line. Expenses slashed for the sake of it may be detrimental. As a business owner, you need to be aware of different cost reduction strategies and how they can help you achieve your goals. By understanding the basics of cost reduction, you will be able to make better decisions when it comes to managing your finances. So let’s look at cost reduction and why it is essential for business owners.

Cost reduction must be done systematically. As the saying goes, you need to spend money to make money. Therefore, cost reduction should be evaluated with what the end game is to achieve profit improvement and efficiency.

Easy ways to Reduce Costs in Your Business

Are you looking for ways to reduce costs in your business? Well, look no further! From taking advantage of new technologies and automation to cutting unnecessary expenses! First of all, a cash budget is an important tool to use. This helps you monitor expenses against actual.

Our latest Value Builder email that we have engaged with our business clients this month looked at a simple way to help work out which costs could be reduced. (if you want to join this email list call our office on 95979966)

Let me introduce you to Derek Morin.

Morin founded Tabarnapp to create after-market sales applications for Shopify website owners.

The business was a success, but when his partner, who handled the company finances, left the company, Morin was forced to look closely at his profit & loss (P&L) statement. Morin saw potential improvements, so he made notes in the margin next to each line item he wanted to change as part of his cost reduction strategy.

To save time, he started using a single letter beside each entry to represent the action he wanted to take:

P stood for “Plus,” something profitable, and he wanted more.

U stood for “Unnecessary,” an expense he could eliminate.

R stood for “Replaceable,” a cost that could be replaced with a better or cheaper option.

E = equal no change required

Simply known as the “PURE.” method!

Morin treated the PURE method like a game.

Every month he scrutinized his P&L with the same four-letter system. Morin engaged his team to act on each item that needed improvement. He became obsessed with squeezing out a few more dollars of profit every month.

Tools & Services That Can Help You Reduce Costs

Are you looking for ways to reduce costs without sacrificing quality? Cash budgets and reviewing the cost drivers in your business are essential. Typically wage costs are high ticket cost items. Look how you can get the most out of this resource by increasing productivity.

Look for Profit leaks that are a reality for many small businesses and can significantly impact their bottom line. Therefore, it is crucial to identify and repair these leaks as soon as possible to maximize profits.

Profit leaks can occur from both Revenue and Expenses.

Common Causes of Profit Leaks in Small Businesses, so start reducing unnecessary costs.

Small businesses often face a lot of challenges when it comes to managing their finances. For example, profit leaks can be a huge source of lost income and can cause severe damage to the company’s bottom line.

Cost reduction strategies are essential for small businesses to remain competitive and increase their profits. Implementing cost-saving measures can help companies reduce expenses, increase efficiency, and maximize profits. In this article, we will discuss various strategies that can be used to reduce costs and increase profits for small businesses. These strategies include streamlining processes, lowering overhead costs, outsourcing non-core activities, leveraging technology and automation, improving employee productivity, and taking advantage of tax incentives.

As the economy faces a potential recession or, at the very least, interest rates bite, now is the time to take proactive action on those costs that may now not be adding value to the bottom line.

5 Steps to Make Your Business Sale Ready and Increase Its Value

Is your business sale ready for that next opportunity? Selling a business is a complex process, but it doesn’t have to be overwhelming. With the right strategies and preparation, you can maximize the value of your business and make it sale ready.

Selling a small business can be a daunting task, but with the right exit plan and growth strategies, you can make sure that you get the best deal possible. Retirement may seem like a distant goal, but with careful planning and the right resources, it can become a reality.

Let’s explore how to get your small business sale ready by understanding the basics of exit planning, growth strategies, and retirement options. With this knowledge, you can start your exit plan strategy today.

Here are five steps to help you do just that. By following these steps, you will be able to increase your business’s value and attract potential buyers with ease.

Introduction: What Does it Mean for a Business to be Sale Ready?

Being sale ready is an important step for businesses that are planning to enter the market. It involves preparing the company and its assets to be attractive to potential buyers. This includes creating a clear financial structure, developing a business plan, and ensuring that all legal items are met. It also means having an understanding of the company’s value. But where you may have an opportunity to improve on that value before going to the market. You need a good understanding of the business value and being able to communicate it effectively to potential buyers. Being sale ready is essential for businesses that want to maximize their return on investment. Ultimately it also ensures a successful sale transaction.

Step 1: Analyze Your Current Financials & Identify Areas of Opportunity

Financial analysis is an important part of any business strategy. It helps identify areas of opportunity and improvement to make the most of available resources. By analyzing your current financials, it is possible to identify areas where changes can be made . This can maximize profits and look at reduce costs. This Analysis also helps measure the performance of the company in terms of its financial health.

We offer a ValueBuilder Asssessment that can provide valuable insights into potential future strategies to work on your business value.

Step 2: Review & Update Your Internal Processes

Keeping your internal processes up to date is essential for any business. It helps ensure that your team is working efficiently and effectively and that tasks are completed on time. Regularly improving your internal processes can help you stay ahead of the competition, save money, and improve customer satisfaction. In this article, we will discuss the importance of reviewing and updating your internal processes, as well as some tips on how to do it effectively.

Step 3: Invest in New Technology & Innovations

As businesses move towards digitization, investing in new technology and innovations is becoming increasingly important. Investing in the right technology can help businesses stay competitive and increase their productivity. It can also help them save time and money, as well as improve customer experience.

In this step, we will explore how businesses can use the latest technology and innovations to their advantage. We will look at different types of technologies. And how they can help businesses streamline their operations, automate tasks, and generate more revenue. We will also discuss how to evaluate the potential of new technologies before investing in them.

Step 4: Build Strong Relationships with Strategic Partners

Building strong relationships with strategic partners is an essential part of any successful business. By forming strategic partnerships, businesses can leverage the resources and expertise of other organizations. The aim is to create more value for their customers. Through collaboration, businesses can gain access to new markets. From here thet can develop innovative products and services, and increase their competitive advantage in the marketplace. Strategic partnerships also provide an opportunity for businesses to share knowledge and expertise, helping them stay ahead of the competition.

The next step for getting your business sale ready.

There are many areas in which you can improve your business to make it sale ready. We offer you the opportunity to complete a detailed review of your business. Let us help you find those hidden gems. You can undertake a free Valuebuilder assessment here,

Being sale-ready means you can be ready to for any potential offers and be confident in selling at the maximum value achievable. This is called business freedom and allows you to be ready for Mr. Right who will love your business as much as you do.

Sales tools for small business

Effective Sales Tools for the small business smart checklist

Do you use tools that help grow sales in your business? Sales are the lifeblood of any business. Yet how many of us have had training in closing a sales deal as small business owner? With a new year about to start, it’s time to review your sales process and help your business grow.

Set a budget that you and the team can aim for in 2023

Working with your customer

The art of selling is to focus on the prosperity and happiness of your customers!

Don’t bother telling the world you are ready. Show it. Do it.” – Peter Dinklage

Setting up an effective CRM system lets you manage your customers and their relationship with you. Are your customers frequent users of your business that need weekly or monthly sales follow-ups? Not only about purchasing but post-sale follow-ups. These measures all drive sales. You can plan as sales intelligence allows you to understand your customer’s future needs.

For more information about factors like occupancy rates etc, see our other article keeping customers coming back.

The more touch points you have with a customer, the more chances they will remain with you. The longer they remain with you, the more valuable they become, leading to business value. Business value is what will deliver you business freedom


Take a moment and ask yourself how much in terms of revenue my business has done:
– For This week
– For This year
– Compared to this time last year

Are you having the best year ever? Are you monitoring these vital statistics?

After you have addressed these vital questions, now look at the trends. Data in your accounting system is your friend. Look at:
– Trends of turnover
– Forward orders
– What sells when, how and why
– What doesn’t generate a large margin
– What stock gathers dust, and why

So your XERO, Quickbooks or MYOB will be able to produce some of these valuable sales reports. Accountants like us can help you work out what is profitable and what should become a runt or no longer stocked product or service.

Your sales department should be focused machine on the yearly budget. What I hear you say “ I don’t have a sales department “ If you don’t, then adopt one, even if is you.


Your sales checklist to create effective sales tools

Check if any of the statements apply to you.

  • I do not waste time training people who are not trainable in sales.
  • I manage the company’s daily sales quota.
  • I always keep sales brochures available for potential customers.
  • I keep a written copy on just in case.
  • I know how to close a sale so that the customer benefits and I make money.
  • The company supports my sales effort wholeheartedly from concept to close.
  • I have a multifaceted system of referrals and word-of-mouth.
  • I am fully aware of what customers need and want and adapt to them.
  • I keep sales and marketing costs low, even if it means lost sales from time to time.
  • I make my appearance, company, and product as attractive as possible.
  • I create focus groups and record responses and reactions for my evolving action plan.
  • I involve every staff member in various aspects of strategy development, allowing each the opportunity to contribute.

Look at where you are taking your business’s sales.

In small businesses, effort = reward. Small leads to large, and smart sales plans lead to profit and adding value to your business.

Ignore your accounting system at your own peril. Make sure you monitor your sales, follow the trends and focus on the end game. A healthy sales result for 2023!

business partnerships

Should I be running my business as a partnership

Running my business as a Partnership or as a sole trader you need to tread carefully.

These simple entities are popular, as they are easy to set up. They are also simple to manage and have fewer complications than that of a company or a family trust, making reporting easy to prepare.
However, they are most suited to businesses operated by family members, individuals or those working on a small scale.

Partners in crime – mates dont always make good business partners


It’s worth noting that a partnership can be between people, trusts or companies. A sole trader is just you.
The danger lies in where the partners are individuals. This joins them at the hip, and they have the same legal liability as sole traders. This means that “YOU” can become personally liable for all partnership debts. Yours and your partner’s.

For simple arrangements, there are minimal partners needed to form a partnership. Husbands and wives are easy . They often have no need for a partnership agreement. A bank statement in joint name will be sufficient evidence for the tax office to recognize that a partnership is trading. This is further evidenced by the ABN details recorded.

Friends and unrelated parties often start partnerships. While it is crucial that a partnership agreement is executed, in our experience, it usually isn’t. In fact no one even thinks about the partnserhip rules as they are so keen to make the business happen.

Sometime its not a great idea to be in partnership at all . Take John Dutton from Yellowstone . When you like to make your own decisions, being in partnership wont work. He is a strong willed man and what he says goes. If your a John Dutton then dont go into business with anyone as it wont work.

When a dispute often arises over money, happier times and past friendships go out the door. All handshake agreements are forgotten, and conflict resolution often becomes protracted if no formal agreement exists.

In summary, a partnership agreement should indicate what each partner contributes to the business, either in the form of intellectual, equipment, capital or time. It should also outline how the profits will be split.

How often are partners paid profits, and who does what? There are no wages paid to partners in a partnership; therefore, this often is one reason other entity structures work better.

Does a business as a partnership pay tax?


Partnerships as an entity and therefore do not pay tax.
The profits the business makes are distributed to the partners.
The partners pay tax at their applicable tax rate. The good thing is that losses get distributed directly to the partner and, in many cases, can be offset against other income.


Likewise, the amount of loss that can be offset against a partner’s other sources of income is their share of the partnership loss and not the amount of money they contributed to the Partnership. The ability to distribute losses can be a tax benefit in the set-up stage of a business. Likewise for those who act a sole trader.

Joint debts – DANGER

Like a marriage, Under partnership law, each partner is jointly liable for the Partnership’s debts.

This is where danger can strike as if one partner is financially unable to pay their share of the partnership debt; then creditors look to the other partners to make good. In the event of the business failing or a claim for damages against the business not being covered by the business’s assets, each partner’s personal assets are available to meet the debts.

There are no disadvantages to a partnership relating to Capital Gains Tax. Partners can claim small business tax relief on the sale of a business.CGT tax liability. This can be split when a partnership with more than two owners is involved in a business.

What are my business structure options

Most business owners are conscious of putting a fence around their business and protecting themselves from legal action for negligence, debt and the ATO. It is why acting as a sole trader or in a partnership has personal exposure and could be likened to walking on a tip rope over a high cliff.


For some starting out as a sole trader or Partnership is a cheap and easy option to put a toe in the water. However, if the business is successful, it is beneficial to stop and reconsider. I am using the most tax-effective and protective structure for me moving forward.

Reach out if we can help you further help on 95979966

SMSF and commercial property

SMSF and commercial property is an investment often held by an SMSF and is a good strategy. Is holding your business premises, Factory or shop in an SMSF a good strategy?

Allowing your SMSF to hold your business real property is a fantastic opportunity for the small business owner to isolate its business asset from the main trading company. It also means you can become a long-term tenant of your SMSF.

There are some distinct advantages for both estate planning and long-term protection strategies of your asset in an SMSF. Any property strategy it must be done properly and there are a few items that you need to address before undertaking this measure in your self-managed fund.


SMSF advantages holding business real property

It is the only opportunity that you have under superannuation law to transfer a business real property from yourself into the Fund. Normally it is not possible to transfer property however your business premises is one exception.

Holding your business real property allows your super fund to grow organically and means that instead of paying rent to a landlord you are paying yourself via your SMSF and growing your retirement funds.

It’s a clever way to pay off your assets and at the end of the day when you retire you can then rent the property to others or have your family be part of your SMSF and they take over the asset
Before purchasing the property or transferring the property with a commercial property take time to work through your Funds investment strategy and how the asset will be acquired by your Fund.

How your Fund can acquire property:

Your fund can acquire the property in a number of ways and these include:
1. Establishing a borrowing in relation to the acquisition of the property however needs to be done in connection with using a bare trust arrangement it is essential that we need a separate bare trust from the SMSF assets If you’re borrowing to buy a commercial property, it needs to be under a limited recourse borrowing arrangement (LRBA). involved.

per the CPA – Borrowing – who can lend the SMSF the money?

There are no restrictions on who can provide the finance for the SMSF, meaning it could include any financial institution, a related entity or a member of the fund.
An LRBA is not a regulated financial product. However, as discussed earlier ASIC has stated that an adviser cannot recommend an SMSF trustee invest in property through their SMSF unless the adviser is appropriately licensed under the AFSL regime. Geoff Gartly has an ASFL and can appropriately advise you in this area.

2. If your Fund has sufficient monies, it can buy in your SMSF and commercial property outright

Or we can arrange for additional contributions to be contributed to help ensure there are sufficient funds.

3. The fund can in some circumstances acquire a commercial property in partnership with yourself or others providing there is no borrowing attached.

Arm’s length dealings

Once you have purchased or transferred the property into the Fund, then you must ensure that you put a commercial lease in place. This is important for both external parties or yourself if you’re running to get back to yourself at a market rental. Importantly once in place, you must ensure rental payments are made per the lease agreement. Failure to do so may make the Fund non-complying.

The property holding Strategy

It comes down to strategy when working out if SMSF and commercial property is the right mix.

Often overlooked is the fact that property and improvements can only be done from cash from the Fund and cannot be done from borrowing, and this should be factored in from the outset
Your SMSF Property strategy should include a :

  • Vision for the long-term use of the property
  • How the Fund will pay any shortfall if monies borrowed
  • What happens if the business owner dies
  • If your business is sold, do you rent out or sell the property

Any property sold in a retirement strategy may result in low or no tax payable depending upon the strategy adopted.


We recommend you seek proper advice and the information we have provided is of general nature only

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