Service Trust Final Ruling - Best Practice News Alert 121

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HEALTH & LIFE’S BEST PRACTICE NEWS ALERT Current circulation:

6965

DATE: ISSUE NO:

23 April 2006 121

Welcome to Health & Life’s free email newsletter service. Tell a friend that we would be happy to add their email address to the distribution list. This service is to provide Health and Life’s clients and those who attended our presentations with up to date information on key financial and practice management issues that may affect your practice. Please do not use this as a substitute to seeking professional advice.

Writer in charge: Mr David Dahm CPA, BA Acc, FTIA, FFin, FAAPM,GLF.

The ATO and Service Trusts – The Final Verdict !!! – The Good, Bad and Ugly We have been reviewing service trust arrangements over the last 14 years. In this latest broadcast the Tax Office latest Ruling (over 60 pages including booklet) on Service Trust arrangements vindicates our position at law and concerns we have expressed about their establishment and implementation in Australia. This is a very important Ruling for practices who have service arrangements in place. Practice Managers should take a keen interest on this issue as it affects their daily work. Practices need to seriously change their thinking on how they run and operate their present arrangements. What is in this issue: 1. The Problem – The Tax Office has released its final ruling and it will impact your practice. 2. Who does this affect? 3. What is the Ruling About? – Background 4. When do I have to address this issue? – immediately! 5. Do I need to review my arrangements?– Brief Overview The Good – it is still worth it! The Bad – Costs time and money to fix up The Ugly – Increased tax audit activity! Is there an alternative? – Stop using a service entity.

6. The Devil is in the Detail - So where am I most at Risk? You Need a Commercial Reason What Document Arrangements & Systems Do you need?


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