Practical Business & Tax Insights

While working with a client, we noticed their business was growing.

They weren't registered for GST, and their GST turnover was around $71,000 — close to the $75,000 registration threshold.

We could have simply recorded what the business had earned and moved on.

Instead, we asked:

“What do you expect your turnover to look like over the next 12 months?”

The client expected the business to continue growing.

That mattered because GST registration isn't determined simply by waiting for historical turnover to physically pass $75,000. The GST turnover tests consider both what has happened and, importantly, the business's projected GST turnover.

We looked forward, not just backward

For most businesses, the compulsory GST registration threshold is $75,000.

Broadly, current GST turnover looks at the current month and previous 11 months, while projected GST turnover looks at the current month and next 11 months, subject to the specific inclusions and exclusions under the GST rules.

So a growing business sitting at approximately $71,000 shouldn't necessarily think:

“I'm under $75,000, so GST isn't something I need to worry about yet.”

We discussed where the client's turnover was heading and whether the projected GST turnover test could require registration.

That gave the client an opportunity to deal with GST proactively rather than discovering the obligation after the event.

Missing registration can become expensive

If a business becomes required to register for GST but continues making taxable sales without properly allowing for GST, not charging a separate GST amount doesn't necessarily make the liability disappear.

The business can potentially become liable for GST on taxable sales from the date it should have been registered.

By the time the problem is discovered, going back to customers and collecting additional money may be difficult or commercially impractical.

For example, suppose the business subsequently made $110,000 of taxable sales without allowing for GST in its pricing.

If those amounts were effectively treated as GST-inclusive, the GST component could be approximately $10,000.

That could mean thousands of dollars coming out of money the business had already received — and potentially already spent.

The longer the problem continued, the larger the exposure could become.

Growth can change your tax obligations

There wasn't an ATO audit or an existing GST problem to fix.

The value was identifying the issue before it became one.

Because the client's business was approaching the threshold and expected to continue growing, we could consider the registration requirements and prepare for the potential impact on pricing, invoicing, bookkeeping, BAS obligations and cash flow.

The client's business hadn't done anything wrong.

It had simply grown to the point where the tax obligations needed to grow with it.

A $71,000 turnover figure isn't necessarily just a number in the accounts.

It can be a reason to ask:

“What happens next?”

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This case study has been generalised and certain details have been changed to protect client and business confidentiality. General information only. GST registration requirements depend on the nature of the enterprise and the current and projected GST turnover tests, including applicable inclusions and exclusions. The general compulsory registration threshold is $75,000 for businesses and $150,000 for non-profit organisations, with different requirements applying in some circumstances.

Paying employees' superannuation late can look like an administrative problem.

For one of our business clients, historical late payments had contributed to more than $50,000 of superannuation costs becoming non-deductible, together with exposure to the Superannuation Guarantee Charge (SGC), interest and other compliance consequences.

When we reviewed the client's affairs, we identified that employee superannuation had repeatedly not been dealt with within the required historical payment timeframes.

By the time we identified the pattern, the tax consequences were already significant.

Paying the super later didn't necessarily fix the tax problem

Under the rules applying to the historical periods involved, failing to make the required superannuation contributions by the applicable quarterly due dates could result in an SGC liability.

That mattered because SGC itself is not tax deductible.

Late contributions also required specific treatment. Depending on the circumstances, an eligible late contribution could potentially be used as a late-payment offset against the SGC or carried forward towards a future quarter. Those alternatives could have different deduction consequences.

For this client, after reviewing the historical payments and their treatment, more than $50,000 of superannuation costs had ultimately become non-deductible.

The cash had still left the business.

The employees' super obligations still had to be dealt with.

But the business had lost deductions it could otherwise have obtained if the obligations had been managed correctly and on time.

The flow-on effect could extend beyond the deduction

A lost deduction can also affect the broader tax position.

If an expense is non-deductible, the taxable income of the company or trust may be higher than it otherwise would have been.

Depending on the structure, that higher taxable income can then have flow-on consequences when profits are ultimately dealt with — for example through company dividends or trust distributions.

The precise outcome depends on the entity, available franking credits, beneficiaries or shareholders and their individual tax positions.

The important point is that the cost of getting super wrong isn't necessarily limited to the super payment itself.

The rules have now changed — but payment timing matters even more

This case arose under the historical quarterly superannuation system.

From 1 July 2026, Payday Super changed the timing of employers' super guarantee obligations.

Employers now calculate super guarantee on qualifying earnings associated with each payday, and contributions generally need to be received by the employee's super fund within 7 business days after payday, unless an extended timeframe applies.

That makes payroll systems, payment processing and monitoring even more important.

For this client, we couldn't go back and change the historicalpayment dates.

What we could change was the process.

Rather than discovering late super when preparing accounts or tax returns months later, the objective was to build the obligation into the client's ongoing payroll and compliance systems so problems could be identified before they became expensive.

More than $50,000 of lost deductions was a costly reminder:

Superannuation isn't paid on time simply because the payment was eventually made. The timing and treatment matter.

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This case study has been generalised and certain details, including financial amounts, have been changed to protect client and business confidentiality. It includes historical superannuation guarantee obligations applying before the introduction of Payday Super on 1 July 2026. General information only. The consequences of late superannuation payments depend on the period involved, the nature and timing of the contribution, applicable SGC rules and how late contributions are treated. From 1 July 2026, different Payday Super rules apply and employers should consider the requirements applicable to each payday.

Employee shares can create a common misunderstanding.

A client had accumulated a substantial shareholding over a number of years through an Employee Share Scheme (ESS), together with additional shares acquired through Dividend Reinvestment Plans (DRPs).

Like many employees, the client had viewed some of the ESS shares as effectively a benefit or incentive received from their employer.

But for tax purposes, receiving shares without personally paying the market price for them does not necessarily mean they have a nil cost base.

And that became particularly important when the shares wereeventually sold.

The capital gain didn't look right

When we reviewed the client's share transactions, the apparent capital gain was substantial.

Rather than simply accepting the available acquisition figures, we asked:

How were these shares originally acquired, and had the client already been taxed on any of their value?

That led us back through the client's Employee Share Scheme history.

Depending on the particular ESS and the applicable tax rules, an employee may have an amount included in their assessable income in relation to shares or rights received under the scheme.

The employee may therefore have already been taxed on value associated with those shares even though they did not purchase them in the conventional way.

That history can be critical when subsequently determining the CGT cost base.

We reconstructed the ESS history

We investigated the client's ESS records, including the relevant acquisition and taxing events and amounts previously brought to account for income-tax purposes.

We then considered the CGT cost-base treatment of the resulting shares under the applicable ESS and CGT rules.

The result was a significantly higher tax cost base than would have been produced by simply treating the shares as having been acquired for little or no cost.

That, in turn, significantly reduced the client's capital gain.

The important point wasn't simply the final number.

It was recognising that the client's historical ESS taxation could affect the tax treatment when those shares were eventually sold.

Dividend reinvestment plans can create a similar record-keeping problem

We also see a related issue with Dividend Reinvestment Plans.

Under a DRP, instead of receiving a dividend entirely in cash, the shareholder uses the dividend to acquire additional shares.

The dividend may still be assessable income, while the newly acquired shares have their own acquisition details for CGT purposes.

Over many years, this can result in numerous separate parcels of shares with different acquisition dates and cost bases.

If those historical DRP acquisitions aren't properly captured when the shares are eventually sold, the calculated capital gain can be overstated.

Don't assume the number in front of you is the tax cost base

This case was a good example of why we don't simply accept the apparent gain generated from incomplete share records.

For long-held investments, we may need to understand how the shares came into existence in the first place.

Were they purchased normally?

Were they received through an ESS?

Was an amount previously taxed under the ESS provisions?

Were additional shares acquired through a DRP?

Were there multiple parcels acquired over many years?

Those questions can materially change the CGT calculation.

A share may have cost the client little or nothing out of pocket — but that doesn't necessarily mean its tax cost base is zero.

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General information only. The taxation of Employee Share Schemes and the CGT cost base of ESS shares depend on the particular scheme, applicable Division 83A and CGT provisions, relevant taxing events, amounts previously included in assessable income and other circumstances. DRP shares generally require consideration of each relevant acquisition and associated tax records. The treatment of a particular shareholding should be determined from the relevant documentation and applicable tax law. This casestudy has been generalised and certain details have been changed to protect client confidentiality.

A client was considering acquiring an established real estate agency for approximately $3 million.

The business had an established rent roll generating recurring property-management income, together with a sales division generating commission income.

There were historical financial statements and independent valuation reports available.

But before committing $3 million — and taking on substantial acquisition finance — we wanted to answer a more important question:

After the client buys the business, will it generate enough cash to operate comfortably and service the acquisition debt?

Historical profit was only the starting point

We reviewed several years of financial information and the independent valuation reports, but we didn't simply take the reported profit and assume it would continue.

The business had different revenue streams with different characteristics.

An established rent roll could provide relatively recurring management fee income, while sales commissions could fluctuate considerably depending on transaction volumes, market conditions and the performance of the sales team.

We therefore looked at what was driving the business: the size and quality of the rent roll, recurring and ancillary management income, historical sales commissions, staffing and commission costs, premises and operating expenses, maintainable earnings and working-capital requirements.

We also compared relevant aspects of the business against available real estate industry benchmarks.

The objective wasn't to assume the business should perform exactly like an industry average. Benchmarking gave us another reference point for identifying unusual costs or margins and testing whether the assumptions being used in the acquisition model appeared commercially supportable.

Then we modelled what happened after the purchase

Historical accounts tell you what happened under the previous owner.

The client needed to understand what could happen after paying $3 million for the business and taking on the acquisition debt.

We prepared a forward-looking cashflow forecast incorporating the expected revenue and operating costs, working-capital requirements and proposed acquisition funding.

Importantly, we modelled both interest and principal repayments.

That distinction matters.

Interest affects accounting profit. Repayment of loan principal generally doesn't appear as an expense in the profit and loss statement — but the cash still has to leave the business.

A business can therefore look profitable on paper while having significantly less cash available after servicing the debt used to buy it.

We also tested what happened if some of the assumptions changed. What if sales commissions were lower? How much of the income was recurring? What level of staffing did the business actually require? How much working capital needed to remain in the business?

Ultimately, the question became:

After paying the employees, operating expenses, working capital requirements, interest and principal repayments, was there still enough cashflow and headroom for the acquisition to make sense?

The model helped turn a $3 million decision into something measurable

The forecast also formed part of the financial information prepared to support the client's financing process with the lender.

By bringing together the historical financials, valuation reports, rent-roll economics, sales income, staffing costs, industry benchmarking and acquisition finance, the client could see more than whether the business had historically made a profit.

They could see how that profit could translate into cash after acquisition — and whether that cash was expected to support the debt required to buy the business.

The client ultimately proceeded with the acquisition.

A $3 million purchase should not be based solely on what the business earned yesterday.

Before buying, we wanted the client to understand:

“If I buy this business, what could the cash flow look like tomorrow — and can it comfortably pay for the debt I am taking on today?”

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This case study has been generalised and certain details, including financial amounts, have been changed to protect client and business confidentiality. General information only. Business acquisition decisions depend on the particular circumstances, including maintainable earnings, revenue composition, working capital, transaction structure, financing terms and industry conditions. Forecasts and benchmarking depend on assumptions and available information, and actual results may differ. Our role was to provide financial, cash-flow and tax analysis and information to support the client's financing process. Lending and credit decisions remain matters for the lender and, where applicable, an appropriately licensed credit or finance professional.

A client held approximately 3 million performance rights in a listed company.

During the year, the relevant performance hurdle was achieved and the rights vested. With the underlying shares worth approximately 10 cents each, the rights represented around $300,000 of underlying share value.

The client understandably thought:

The rights have vested, so the $300,000 must now be taxable.

But with Employee Share Schemes (ESS), the word “vested” doesn't necessarily tell you when the tax is due.

We went back to the actual plan documents

Rather than simply treating the vesting date as the tax event, we reviewed the documentation governing the performance rights.

We looked at when the rights were granted, the performance and forfeiture conditions, what happened when they vested, whether the rights could be transferred or disposed of, when they could be exercised, what happened if they weren't exercised, and what restrictions applied to any resulting shares.

That distinction mattered.

Although the performance hurdle had been achieved, the rights had not yet been exercised and converted into ordinary shares. The rights themselves were subject to restrictions under the scheme and would lapse if they were not exercised by the relevant expiry date.

We therefore needed to determine whether vesting had actually triggered the deferred taxing point under Division 83A — or whether the taxing point occurred later under the particular terms of the scheme.

Vesting and taxing aren't necessarily the same event

Tax-deferred performance rights have specific rules determining when the ESS deferred taxing point occurs.

Depending on the nature of the rights and the scheme terms, relevant considerations can include whether there remains a real risk of forfeiture, whether the rights have been exercised, and whether the scheme genuinely restricts disposal of the rights or resulting shares.

Based on our review of the documentation applying to these particular rights, vesting itself did not trigger the deferred taxing point.

That meant approximately $300,000 of underlying share value that the client thought might need to be dealt with in the current year's tax return could instead fall into a later income year.

This wasn't a $300,000 tax saving.

The ESS income still needed to be recognised when the relevant taxing point occurred, and the assessable amount would depend on the value determined under the ESS rules at that time.

What we identified was a tax deferral — potentially with significant cashflow and tax-planning implications.

With ESS, the documents matter

Performance rights can involve several important dates:

grant → vesting → exercise → taxing point → eventual sale

Those dates aren't necessarily the same.

Simply seeing that performance rights had “vested” and automatically treating that as the tax event could therefore produce the wrong outcome.

For this client, the important question wasn't simply:

“What is the value of the vested rights?”

It was:

“What do the plan documents actually say happened to the rights - and when does Division 83A say the tax becomes payable?”

With approximately $300,000 of underlying value involved, getting that distinction right mattered.

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This case study has been generalised and certain details, including quantities and values, have been changed to protect client and business confidentiality. General information only. Employee Share Scheme taxation depends on the applicable Division 83A provisions, when the ESS interests were acquired, the nature of the rights, the specific scheme documentation and the taxpayer's circumstances. Grant, vesting, exercise, real risk of forfeiture, genuine disposal restrictions, disposal and other events can affect the timing and amount of taxation. The 30-day disposal rule may also alter the deferred taxing point in relevant circumstances.

Many businesses start with one entity.

The company employs the staff, signs the customer contracts, owns the equipment, holds the cash and carries on the day-to-day business.

When the business is small, that simplicity can make sense.

But as one client's business grew and accumulated increasingly valuable assets, we asked a different question:

Should millions of dollars of valuable assets continue sitting in the same entity carrying the day-to-day operating risk?

The operating company was doing everything

An operating business can be exposed to risk through employees, customers, suppliers, contracts, finance arrangements and its everyday activities.

At the same time, a successful business can accumulate substantial assets.

For a transport business, that might include trucks and trailers worth hundreds of thousands or even millions of dollars. In manufacturing or construction, it could be machinery, plant and other valuable equipment.

Rather than automatically allowing everything to accumulate in the operating company, we considered whether the structure should separate:

the business that takes the operating risk from the entities that hold appropriate long-term valuable assets.

For example, a separate asset entity could potentially own appropriate trucks, machinery or equipment and make those assets available to the operating company under properly documented commercial arrangements.

The operating company could then focus on employing staff, contracting with customers and carrying on the day-to-day business.

That doesn't make valuable assets untouchable or eliminate commercial risk. Financing arrangements, securities, guarantees, insolvency law and the legal structure can materially affect the protection actually achieved.

But it starts with a more deliberate question:

What needs to be exposed to the operating business — and what doesn't?

The charges between entities still need to be commercial

Creating another entity doesn't give a business licence to move profit wherever it wants.

If one entity genuinely provides assets or services to another, there may be legitimate hire, lease or service charges between them. But those arrangements need commercial substance.

The assets or services must be provided, the charges need a proper basis and the arrangements should be appropriately documented.

We don't simply reach 30 June; decide the operating company has made “too much profit” and create an arbitrary management fee to move income into another entity.

The structure comes first. The transactions between the entities then need to reflect what is happening commercially.

Property deserved its own decision

We applied the same thinking when considering long-term business property.

If the client eventually acquired commercial premises, should the operating company automatically own the property as well?

Not necessarily.

Commercial property can become one of the most valuable assets in a business owner's overall wealth. Holding it separately from the operating business may therefore warrant consideration, depending on the tax, legal, financing, asset-protection and succession objectives.

For some business owners, an SMSF may also be one structure worth investigating for qualifying business real property, subject to the superannuation rules, investment strategy, related-party requirements, financing and the client's broader retirement circumstances.

But there is no universal answer.

The objective isn't to create as many entities as possible.

Every entity should have a reason to exist.

Structure should evolve as the business evolves

A structure that made sense when a business had two employees and $100,000 of equipment may not remain appropriate when it has dozens of employees, substantial contracts, valuable equipment and commercial property.

That's why we don't look at business structures as something that should be established once and then ignored indefinitely.

As the business grows, we review what each entity is doing, where valuable assets are accumulating, where the commercial risks sit and whether the existing structure still supports the owner's longer-term objectives.

Sometimes the question isn't:

“Do we need another company?”

It's:

“Why is this particular asset sitting in the operating company in the first place?”

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This case study has been generalised, and certain details have been changed to protect client and business confidentiality. General information only. Separating assets and operating activities does not guarantee asset protection. Tax, GST, CGT, duty, financing, security, insolvency and other consequences should be considered before transferring existing assets or establishing new arrangements. Related-party hire, lease and service arrangements must have appropriate commercial and tax support. Asset-protection and legal structuring should be considered with an appropriately qualified lawyer. SMSF ownership of business real property is subject to specific superannuation laws and should be separately assessed before implementation.

A client came to us considering buying an established café for approximately $180,000.

On the surface, it looked attractive: a prime location, strong foot traffic, an established customer base and approximately $900,000 in annual revenue.

But before our client invested $180,000, we wanted to know something more important:

What was the business actually earning?

$900,000 of revenue didn't mean $900,000 of value

We reviewed several years of financial statements.

Despite the significant turnover, profitability had been low and inconsistent, including both profitable and loss-making years. There was little evidence of strong, maintainable earnings after the operating costs of the business.

That mattered because a purchaser isn't buying turnover.

They're buying the opportunity to generate future profits and cashflow.

Was the client buying a business — or buying themselves a job?

The café employed a manager, so we also considered what the numbers could look like if our client bought the business and personally performed that role.

Removing the manager's wage made the owner-operator earnings look better.

But that didn't automatically make the café a better investment.

We needed to distinguish between:

the amount the client was effectively earning for working in the cafe; and

the return generated on the $180,000 of capital they were investing.

If most of the apparent profit only arises because the purchaser replaces an employee and works in the business themselves, a substantial part of that “profit” may really represent remuneration for their labour.

A business should therefore be assessed after allowing an appropriate commercial wage for the work the owner is expected to perform.

Only then can you properly assess what return the business itself is generating on the capital invested.

The numbers didn't support the $180,000 price

We considered the café's historical and maintainable earnings, the owner's required involvement, an appropriate commercial wage, the assets being acquired and the return available on the client's investment.

We also considered what the client was taking on: $180,000 of capital at risk, together with the operational responsibilities and risks of running a hospitality business.

Based on the financial information and assumptions we reviewed, we weren't satisfied that the maintainable earnings supported paying approximately $180,000 for the business.

The client ultimately decided not to proceed.

That didn't mean the café had no value.

It meant the numbers didn't support the investment for our client at that price.

A prime location, busy premises and $900,000 of annual revenue can make a business look successful from the outside.

But before buying a business, the more important questions are:

What does it earn after allowing a commercial wage for the owner's work — and is the remaining return enough to justify the capital and risk involved?

For this client, answering those questions helped them walk away from a $180,000 investment that didn't stack up financially.

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This case study has been generalised, and certain details have been changed to protect client and business confidentiality. General information only. Business acquisition and valuation decisions depend on factors including maintainable earnings, normalisation adjustments, asset values, owner involvement, lease terms, working capital requirements, financing and industry conditions. Our role was to provide financial and tax analysis of the proposed acquisition. Legal matters should be considered with an appropriately qualified lawyer, while lending and credit matters may require advice from an appropriately licensed credit adviser.

A client wanted to buy a $210,000 luxury car.

Their business had sufficient cash available, so the obvious question was:

Should the business buy it?

At first glance, buying an expensive vehicle through a business can sound attractive. There may be depreciation deductions, GST credits and other tax consequences to consider.

But the client expected the vehicle to be used predominantly for private purposes.

That changed the analysis.

The $210,000 purchase price didn't mean a $210,000 tax deduction

For a luxury passenger vehicle, the tax deductions and GST credits aren't necessarily based on the full purchase price.

For example, the car depreciation limit for the 2025–26 income year was $69,674. Subject to the particular vehicle and applicable rules, that meant the business couldn't simply depreciate the entire $210,000 purchase price for income-tax purposes.

If the vehicle was also used privately, the deductible amount would need to reflect the relevant business use.

The GST credit was similarly capped. For 2025–26, the maximum GST credit for a car above the car limit was generally $6,334, unless an exception applied.

So even before considering FBT, buying the car through the business didn't mean the client would obtain tax deductions based on the entire $210,000 cost.

Then there was potentially around $42,000 of FBT taxable value

Where an employer provides a car that is available for an employee's private use, a car fringe benefit can arise.

Under the statutory formula method, the taxable value broadly starts with the car's base value and applies a 20% statutory rate, adjusted for the period the car was available for private use and any recipient contributions.

For a $210,000 vehicle available for private use for a full FBT year, a simplified illustration gives:

$210,000 × 20% = approximately $42,000 of gross FBT taxable value.

That isn't $42,000 of FBT itself. It is the approximate taxable value before considering matters such as recipient contributions and the precise FBT base value.

The operating cost method may produce a different result where the required records are maintained and there is sufficient business use. But even if a logbook supported substantial business use for FBT purposes, that wouldn't remove the separate income-tax depreciation limitation applying to a luxury passenger vehicle.

The client therefore couldn't simply look at a $210,000 purchase through the business and assume the tax deductions would outweigh the private-use consequences.

Then we looked at another source of cash

When we reviewed the client's broader position, we identified that an associated trust already owed money to the client.

That was important.

Repayment of genuine loan principal is fundamentally different from extracting additional taxable profits from a company or trust.

Rather than automatically purchasing the vehicle through the business, we considered whether amounts genuinely owing to the client could be repaid and used towards purchasing the vehicle personally.

That could avoid unnecessarily placing a predominantly private-use luxury vehicle inside the business structure.

The client also had personal investments available, so the broader decision became whether to use existing personal cash and loan repayments, sell investments, borrow, or use some combination of those options.

At that point, the decision wasn't purely a tax question.

Tax was one input into the decision - not the reason to buy the car

The client was already in a high marginal tax bracket, so selling investments or generating additional taxable income purely to fund the purchase also needed to be considered carefully.

We analysed the tax consequences of the available funding options and worked alongside the client's licensed financial adviser on the broader financial decision, including the implications of retaining or selling investments and using cash versus debt.

Ultimately, the client was able to purchase the $210,000 vehicle personally using available cash, including repayment of genuine amounts already owing to them, rather than automatically putting the car through the business.

The point wasn't that a luxury car should always be purchased personally.

For another client, depending on business use, ownership structure, FBT position, financing and other circumstances, business ownership may produce a different result.

The important thing was that we didn't start with:

“How can we claim the car?”

We started with:

“You want to buy the car. What is the most appropriate way to own and fund it?”

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This case study has been generalised and certain details have been changed to protect client and business confidentiality. General information only. The $42,000 figure is a simplified illustration of gross taxable value under the statutory formula method, assuming a $210,000 FBT base value and full-year availability, before recipient contributions and other adjustments. Actual FBT outcomes depend on the vehicle, base value, availability, method used, business and private use and other circumstances. Income-tax depreciation and GST limitations may separately apply. Loan repayments must represent genuine amounts owing. Our role was to advise on the taxation consequences of the alternatives. Investment and financial product advice should be obtained from an appropriately licensed financial adviser, and credit advice may require an appropriately licensed credit adviser.

A husband and wife were regularly receiving salary from their family trust to fund their personal living expenses.

There was nothing unusual about that on its own.

But when we reviewed the trust's balance sheet and tax position, two things stood out:

• the trust already owed the husband and wife approximately $150,000 -  $75,000 each; and
• the trust had carried-forward tax losses available.

That raised a different question:

Why keep generating additional taxable salary purely to provide personal cash flow when the trust already owes the clients $150,000?

The $150,000 was already owing to them

The clients' loan accounts represented genuine amounts owing by the trust.

Repaying genuine loan principal is fundamentally different from paying salary or making a trust distribution. A repayment of money genuinely owing to the clients would not ordinarily become additional assessable income merely because the debt was repaid.

We therefore considered temporarily reducing the salary being paid and instead progressively repaying the existing loan balances.

That could provide the husband and wife with access to up to $150,000 already owing to them, while reducing the PAYG withholding cash-flow obligations associated with continuing to pay salary during that period.

But reducing salary affected the trust too

We couldn't look at the clients' personal cash flow in isolation.

If the trust stopped incurring otherwise deductible salary expenses, its taxable income could increase.

Normally, that could simply move the tax problem somewhere else.

But this trust had another existing tax attribute: carried-forward revenue losses.

Subject to the trust satisfying the applicable loss-recoupment rules and having sufficient losses available, those losses could potentially be applied against the trust's increased taxable income.

That meant the strategy needed to be considered as a whole:

reduce salary for a period →repay genuine amounts already owing to the clients → reduce PAYG withholding cash-flow obligations → potentially utilise existing trust tax losses against the resulting increase in taxable income.

The opportunity was already sitting inside the structure

We didn't create another entity or manufacture a new deduction.

The trust already owed the clients approximately $150,000.

The carried-forward tax losses already existed.

And the clients already needed personal cash flow.

The opportunity came from recognising that those existing positions could potentially work together rather than automatically continuing the same salary arrangement year after year.

Sometimes the most useful tax planning starts with the balance sheet.

Before creating more taxable payments, first ask:

“Does the entity already owe you money?”

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This case study has been generalised and certain details have been changed to protect client and business confidentiality. General information only. The availability and utilisation of carried-forward trust losses are subject to the applicable trust loss provisions and the particular circumstances of the trust. Loan balances must represent genuine amounts owing and should be verified before repayment. The tax treatment of payments from a trust depends on their legal and accounting character. Salary, trust distributions and repayment of genuine loan principal can have materially different tax consequences.