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Australian Investment Professionals saves client $250,000 in tax 

Client profile:

Bill is an eye surgeon working as a consultant. He spent the past year undertaking an overseas fellowship and has recently returned to Australia with specialist knowledge.

Having been a client of Australian Investment Professionals for two years, Bill thought he had a good knowledge of tax and financial management. He received a nasty surprise however when he sold his medical practice without consulting his financial manager.

Situation:

Bill sold his medical business to a publicly listed company for a sum of $2 million. This resulted in a Capital Gains Tax liability of $250,000. Bill approached the Australian Investment Professionals Taxation Team for assistance in reducing this tax burden.

Solution:

The Australian Investment Professionals Taxation Team set up a self-managed super fund and transferred $500,000 of the sale proceeds to this super fund for the benefit of Bill’s retirement. They then used tax concessions and a lifetime of rollover concessions to ensure the remainder of the sale proceeds remained tax free. With the new super laws, the $500,000 transferred to the super fund will not be subject to tax on retirement.

Benefits:

Due to the structure of the investment and the tax concessions used, Bill paid no tax on the sale of his business, a total saving of $250,000.

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