ATO Guidelines on Professional Practice Structures
15/02/15 20:34 Filed in: Tax
Back in September the ATO issued new guidelines on profit distributions from professional practices. Although these are primarily aimed at some contrived constructions used by larger legal and accounting practices, they equally apply to other professional ‘business’, including medical practices. The guidelines seem to contradict the ATO’s own tax rulings and we have been involved in drafting a submission by the Tax Institute to the ATO requesting a re-drafting or clarification.
Some panicky articles have appeared in medical journals and advisers’ newsletters. Without going into much detail, we do not believe that any of our clients, with a few possible exceptions, would be affected by these guidelines (assuming they have any legal standing) . The guidelines do NOT affect any clients with a normal service entity set-up, they would only (in theory) apply to hybrid trusts, where these are used in a rather contrived manner.