SMARTEN UP! The Tax and Business Podcast

Are you a company director unsure about your legal obligations and liabilities? In this episode, host Sally Preston chats with Mitchell Herrett, a partner at RSM in the Restructuring and Recovery division, to break down the key things every director must know to stay out of trouble.
In this episode of the Smarten Up! The Tax and Business Podcast, you'll learn:

• The key statutory obligations for directors under the Corporations Act (3:00)
• Consequences of breaching directors' duties (insolvent trading, civil/criminal proceedings) (5:30)
• Understanding insolvency and when a company is deemed insolvent (9:16)
• Risks of director penalty notices from the ATO (13:21)
• Protecting yourself as a director with co-directors/board (20:27)

If you're a company director, this episode is a must-listen to ensure you understand your duties and how to mitigate risks. Mitch provides invaluable insights drawing from his experience helping directors navigate difficult situations. 
CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/

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LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/ 

Are you wondering if you are still a tax resident of Australia after moving overseas? In this episode, Sally Preston provides an in-depth overview of how to determine individual tax residency in Australia. She covers the ATO's 2023 updated ruling on the factors to consider for tax residency.
In this episode of the Smarten Up! The Tax and Business Podcast, you'll learn:

• The 4 tests for individual tax residency in Australia (3:12)
• What are the "resides" test factors? (5:36)
• How the "domicile" test works and what constitutes a "permanent place of abode" overseas (13:50)
• The 183-day test for individuals arriving in Australia (21:53)
• Examples illustrating when residency is maintained or severed based on facts (27:28)

Sally breaks down the key tests, factors, and examples from the ATO's ruling to determine if you remain an Australian tax resident after relocating abroad. This is an essential listen for anyone moving overseas from Australia to understand the tax residency rules and considerations.
CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/

Facebook: https://www.facebook.com/SmartSolutionsTax

Instagram: https://www.instagram.com/smartsolutionsau/

Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517

Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/

LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/ 

Are you a private company owner navigating the complex world of contracts and potential disputes? In this episode, Sally speaks with litigation lawyer Sarah Bryden about the potential pitfalls around contracts and disputes that private company owners need to understand. Sarah provides an in-depth look at key legal issues related to contracts, shareholder agreements, and resolving disputes.
In this episode of the Smarten Up! The Tax and Business Podcast, you'll learn:

• The key contracts businesses should have (3:12)
• Importance of shareholder/partnership agreements (5:36)
• When shareholder disputes arise (13:50)
• Advice for resolving shareholder disputes (21:53)

Sarah breaks down the key contracts, shareholder agreement provisions, and dispute resolution options. This episode is essential for entrepreneurs and private company owners to help them avoid and resolve co-founder and shareholder conflicts.

CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/

Facebook: https://www.facebook.com/SmartSolutionsTax

Instagram: https://www.instagram.com/smartsolutionsau/

Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517

Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/

LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/ 

Private company profits and distributions to shareholders seem straightforward, but complex tax rules can create unintended consequences. 
In this eye-opening episode, Sally speaks about the potential landmines around dividends, franking credits, tax rates, and anti-avoidance provisions you need to understand as a private company owner. She provides an in-depth look at key tax issues related to private company profits and distributions to shareholders.
In this episode of the Smarten Up! The Tax and Business Podcast, you’ll learn:

• The two different company tax rates in Australia and how to qualify as a base rate entity (3:12)
• Dividend payments: requirements under corporations law, tax treatment, and imputation system (5:36)
• Franking credits, franking accounts, and the benchmark rule (8:53)
• Franking deficits tax and the holding period rule (12:27)
• Division 7A - the anti-avoidance rules preventing tax-free distributions of profits to shareholders (13:50)
  • What payments/loans are caught by Division 7A
  • Associates of the shareholder
  • Exclusions from Division 7A
  • Strategies to manage Division 7A implications
  
  
• Examples of Division 7A situations (21:53)
  
  

Sally breaks down the complex rules surrounding private company profits and shareholder distributions. This is a must-listen for those operating private companies to optimise tax obligations.

CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/

Facebook: https://www.facebook.com/SmartSolutionsTax

Instagram: https://www.instagram.com/smartsolutionsau/

Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517

Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/

LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/ 

Do you earn your income from providing your services to clients and customers? Well, how you earn income can have major tax implications for business owners. Yet many enterprising professionals fail to fully grasp complex personal services income rules that can have a big impact on their annual tax bill.

Sally illuminates this notoriously confusing area of tax law. She tackles the big questions around income generated predominantly from personal effort and skills:

• What exactly constitutes personal services income?
• When do special tax restrictions apply on diverting this income to another person or entity?
• What tests must be satisfied to be a personal services business?
• How might clever structuring fall foul of ATO anti-avoidance provisions?
  
  

In this episode of the Smarten Up! The Tax and Business Podcast, you’ll learn:

• The definition of personal services income and who it applies to (1:53)
• Why rules exist to prevent diverting this income to companies and trusts (3:39)
• The critical personal services business tests (6:53)
• Passing the 80% rule and other tests (8:39)
• When the ATO’s anti-avoidance rules might apply (15:20)
• Examples of when income is and isn't from personal efforts (19:20)

Understanding personal services income rules is vital for certain business structures to access deductions and optimise tax obligations. This episode breaks down key concepts for owners earning income predominantly from their personal exertion.

CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/

Facebook: https://www.facebook.com/SmartSolutionsTax

Instagram: https://www.instagram.com/smartsolutionsau/

Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517

Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/

LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/ 

Planning and saving for retirement is a complex, long-term endeavour that many people find overwhelming. With changing tax laws, contribution limits, investment options, and more - optimising your super can feel like an impossible task. In this  information-packed episode, Sally sits down with qualified financial planner Nathan Nash to help make sense of it all.

With over 20 years of industry experience, Nathan breaks down the intricacies of superannuation in an approachable way. How do you choose between the array of retail, industry, and self-managed super fund options? What are the pros and cons of concessional vs non-concessional contributions? How can you invest your super in line with your values? What special superannuation strategies exist for small business owners?

Nathan covers all this and more – including often overlooked opportunities like co-contributions and spouse contributions. He emphasises why starting early and dedicating time to understand your super is critical, even if retirement seems ages away. Compounding returns make a massive difference over 30+ years.

In this episode of the Smarten Up! The Tax and Business Podcast, you’ll learn:

• Key factors to consider when selecting a super fund (3:38)
• Why you likely need to contribute extra, not just rely on employer contributions (5:33)
• Definitions of concessional and non-concessional contributions (9:07)
• The benefits and complexities of self-managed super funds (12:18)
• Options for values-aligned “ESG” ethical investing (15:15)
• Super strategies specifically useful for business owners (17:53)
• Early super moves for young adults and co-contribution incentives (21:06)
• Potential superannuation policy changes to watch for in upcoming budgets (22:23)

Whether you're just entering the workforce or gearing up to retire, this episode provides indispensable advice. Nathan and Sally unpack complex concepts in digestible sound bites intermixed with useful analogies and real client stories. Resources mentioned in the episode provide next steps for those wanting to take control of their financial futures.
CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/

Facebook: https://www.facebook.com/SmartSolutionsTax

Instagram: https://www.instagram.com/smartsolutionsau/

Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517

Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/

LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/ 

Do trusts confuse you? Are you unsure of the differences between discretionary and fixed unit trusts? As a business owner, understanding how to best leverage trusts can save you significant money through tax efficiency and asset protection. However, trusts are complex structures that often leave entrepreneurs scratching their heads.

In this episode of the Smarten Up! The Tax and Business Podcast, you’ll learn:

• What is a trust and key parties involved (0:54)
• Discretionary vs fixed/unit trusts explained (3:34)
• How discretionary trusts work (8:41)
• Responsibilities as a trustee or appointor (13:34)
• How fixed/unit trusts work (15:43)
• Pros and cons of discretionary and fixed/unit trusts (19:34)
• Examples of trusts in business structures (21:53)

Even if you currently use trusts in your business structure or have no plans to, this episode delivers value by bolstering your knowledge. The ability to intelligently discuss trusts with legal and financial advisors lends itself to making optimal decisions for your company's growth.

CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/

Facebook: https://www.facebook.com/SmartSolutionsTax

Instagram: https://www.instagram.com/smartsolutionsau/

Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517

Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/

LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/ 

What happens to your hard-earned super when you die or become incapacitated? For those with self-managed super funds (SMSFs), proper planning is essential to ensure your fund continues smoothly.
In this episode, host Sally Preston sits down with Laura Hanrahan, an expert succession and estates lawyer, to demystify this complex topic. With SMSFs now ranking second in Australia for the amount invested, behind industry super funds, chances are you or someone you know has their own DIY super fund. But most members don't realise their normal will and power of attorney documents don't cover succession of their SMSF.
Laura breaks down exactly why succession planning is non-negotiable and shares tips on binding death benefit nominations, appointing attorneys, navigating complex regulations, and more. With straightforward advice and examples, she makes clear that failing to plan can spell absolute disaster for your legacy.
In this episode of the Smarten Up! The Tax and Business Podcast, you’ll learn:

• Why succession planning for SMSFs is so important (1:28)
• What to consider when planning for incapacity or death (2:56)
• How to choose which attorney will take over managing the SMSF (6:45)
• How to direct where death benefits are paid (7:51)
• Top planning tips for members of SMSFs (10:07)

This episode is essential for any SMSF members who want to ensure their fund continues smoothly when they pass away or lose capacity. Proper planning is key. Whether you've just started your SMSF or have been running it successfully for years, you can't afford to miss this conversation. 

CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/

Facebook: https://www.facebook.com/SmartSolutionsTax

Instagram: https://www.instagram.com/smartsolutionsau/

Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517

Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/

LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/ 

As a business owner, do you really know whether your workers are legitimate independent contractors or employees in disguise? This is a complex area, but incorrectly classifying workers can lead to underpaid entitlements and penalties down the road.
In this episode, host and tax expert Sally Preston demystifies contractor vs employee status. She explains that while engaging contractors seems the easiest route to save administration and costs, the legal rights and obligations established in written agreements and tax cases determine whether someone is truly an independent business provider or actually your employee.
Sally warns against succumbing to common industry myths and pressures to pass off employees as contractors. She outlines key indicators from control to risk allocation to tools/equipment provision that distinguish contractor relationships. 

In this episode of the Smarten Up! The Tax and Business Podcast, you’ll learn:

• Key indicators to distinguish employees vs contractors (03:47)
• Common myths about contracting arrangements and ATO's responses (11:27)
• Payroll tax considerations for contractors (16:50)
• Impacts of misclassifying employees as contractors (20:28)

CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/

Facebook: https://www.facebook.com/SmartSolutionsTax

Instagram: https://www.instagram.com/smartsolutionsau/

Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517

Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/

LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/ 

Taxes can take a huge bite out of real estate profits. So it is important to understand what you may be liable for when subdividing and selling land. In this complex area, proper tax planning is essential.

Join Sally as she demystifies the tangled web of rules around land transactions. Expect clear guidance on capital gains versus ordinary income, key factors on classification, and critical GST obligations. 

In this episode of the Smarten Up! The Tax and Business Podcast, you’ll learn:

• The three ways the ATO taxes property transactions (00:54)
• The tax difference between capital gains and ordinary income (01:34)
• Key factors that determine if land sales are capital gains or ordinary income (05:34)
• How to handle GST obligations (10:06)
• A detailed example covering subdividing land and building townhouses (13:56)

Selling land deals with complex tax implications that can make or break your profits. But with smart planning, you can legitimately minimise your tax obligations. 
CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/

Facebook: https://www.facebook.com/SmartSolutionsTax

Instagram: https://www.instagram.com/smartsolutionsau/

Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517

Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/

LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/