Business structuring

Discussion in 'Business Accounting, Tax & Legal' started by Nath, 14th May, 2020.

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  1. Nath

    Nath Member

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    18th May, 2018
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    Hello All,

    After some insight please in Structuring options of 2 businesses under a sole trader.
    My wife and I have 2 businesses with seperate business names under 1 abn as a sole trader currently in my wife’s name.
    Income wise,Will be borderline for registering for gst next month.

    Is it possible to split the businesses with an abn for each of us and each run one as a sole trader up to the 75k limit? Not then having to register for gst

    or are we better to keep all on the one abn and register for gst next year?

    appreciate any insight thank you
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Sounds like your wife is operating 2 businesses?

    a name is not a structure, but just something that the sole trader uses so it has no effect on tax.
    An ABN is just a number and also has no effect on tax, but it may be evidence of who is running the business - which appears to be your wife. How are you involved?

    Transfer of a business is a CGT event.

    Also one entity can only have 1 ABN so are there any trusts or partnerships involved?
     
  3. Nath

    Nath Member

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    Hey Terry,

    my wife is pretty much running The majority

    There is no trusts involved at this stage just running as a sole trader.

    The 2 businesses combined are around the gst threshold so I was wondering weather it was possible to divide them between us and if this is a viable thing to do?
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    You cannot just transfer ownership of a business - there are tax consequences. But this could be minimal depending on what is transferred - generally good will and tangible assets perhaps.
     
  5. iloveqld

    iloveqld Well-Known Member

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    not advise, but I just set up my own abn and run it separately from my wife. Of course, I will pick up the phone and call my account who did my tax returns for years in advance...
     
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  6. iloveqld

    iloveqld Well-Known Member

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    Btw, our aim usually is to get higher revenue, GST is not an issue if you can aim for 200K, 2mil, 20mil :D
     
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    I don't think GST is an issue for under $75k turn over as you can claim GST on costs. But I guess it results in a higher price for clients who may not be happy paying 10% extra.
     
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