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Buying property through a structure rather than in your own name sounds like smart planning. And it can be. But the tax, legal and compliance risks that come with trusts, companies and self-managed super funds are real, and they catch people off guard more often than most advisers would like to admit. Here is what actually goes wrong, and why getting the structure right from the start matters more than most buyers realise.

Structure Comparison at a Glance

Trusts: The Negative Gearing Problem Nobody Mentions

Discretionary trusts are popular for asset protection and income splitting, but they cannot distribute losses to beneficiaries. If the property runs at a loss, that loss stays trapped inside the trust. You get none of the negative gearing benefits that individual ownership provides.

Other common trust property traps:

Land tax surcharges: In most states, trusts do not receive the land tax threshold available to individuals, meaning higher annual land tax bills from day one.

Stamp duty on trust deeds: Resettling or amending a trust after purchasing property can trigger stamp duty as if the property changed hands.

Trustee liability: If the trustee is an individual rather than a company, personal assets can be exposed if something goes wrong.

Companies: The CGT Discount Trap

A company generally pays tax on taxable income at either 30%, or 25% if it qualifies as a base rate entity. Unlike individuals and eligible trusts, a company does not qualify for the 50% capital gains tax discount on assets held for more than 12 months. That means if a company sells a property after five years of growth, tax is calculated on the full capital gain, not half of it.

Working with a tax lawyer Perth Australia means understanding this before you buy, not when you're preparing the contract of sale.

SMSFs: Compliance Risks That Can Wipe Out the Fund

Buying property through a self-managed super fund is tightly regulated by the ATO. The property must meet the sole purpose test, meaning it exists solely to provide retirement benefits. The consequences of getting this wrong are severe.

Related party transactions: The fund generally cannot purchase residential property from a member or their relatives, even at market value.

Personal use: Members and their relatives cannot live in or use the property. This rule applies even occasionally.

Limited recourse borrowing: If the SMSF uses a limited recourse borrowing arrangement (LRBA) to buy property, the structure must be set up precisely, or the ATO may treat the fund as non-complying.

A non-complying SMSF is taxed at 45% on its entire assets, not just the income from the property. That is not a fine. That is a fund-ending event.

Why the Structure Decision Cannot Be Undone Cheaply

Transferring property from one structure to another after purchase typically triggers stamp duty and CGT all over again. There is no do-over. The best tax lawyer Perth property investors rely on will map out the full tax cost of each structure before you sign anything, including what happens on eventual sale.

Business owners restructure and transfer assets all the time, thinking it is a straightforward process. Move something into a new entity, bring a partner into ownership, consolidate a few structures. Then the tax bill arrives and it is nothing like what anyone expected.

Capital gains tax has a way of catching people off guard, particularly when the transaction feels routine or is driven by operational necessity.

The "No Money Changed Hands" Misconception

This comes up constantly in business settings. An owner transfers an asset between related entities, no external payment is involved, and assumes there is no CGT because nothing was technically sold. The ATO often takes a different view.

Most asset transfers, even internal ones, are treated as though they occurred at market value on the day of transfer. CGT is generally calculated on the difference between what the asset originally cost and what it was worth when it moved. The fact that no cash changed hands between third parties is often irrelevant.

For assets held over a long period, that gap between cost base and current market value can be significant. The liability that follows often catches business owners completely off guard.

Restructures Are Not Automatically Exempt

Moving from a sole trader to a company structure, consolidating related entities, or transferring business assets into a trust can all trigger CGT events that were not anticipated when the decision was made.

Rollover provisions exist to defer CGT in certain restructure scenarios, but they come with conditions. Miss one requirement and the rollover may fall away entirely. The small business CGT concessions can reduce or eliminate a gain in the right circumstances, but accessing them requires satisfying tests around asset type, active use, ownership period, and net asset value thresholds.

A tax lawyer Perth Australia business owners turn to will often point out that the concessions are worth exploring, but the eligibility assessment needs to happen before the transaction is completed, not after the documents are signed.

Goodwill and Intangible Assets Catch People Out

Property and equipment are the obvious assets people think about. Goodwill, client lists, intellectual property, and contractual rights are also CGT assets and can carry significant value that gets overlooked during a restructure.

When a business is sold or restructured and these assets change hands, the CGT consequences need to be considered just as carefully as any physical asset. Leaving them out of the analysis is a common and expensive mistake.

What Getting This Right Actually Involves

The best tax lawyer Perth advisers are not just reviewing transactions after the fact. They are working through the consequences before anything is signed or transferred.

That means looking carefully at:

The original cost base and any capital improvements or additions over time

Whether rollover relief or small business concessions genuinely apply

How the timing of the transaction affects the overall tax position

How the transfer interacts with other assets held across related entities

Running a small business in Australia means juggling a lot at once. You focus on customers, staff, and getting work done. Tax usually stays in the background, until it doesn’t.

Problems often appear later, sometimes with penalties attached. Most business owners are not doing anything wrong. They simply don’t realise how quickly tax issues can escalate.

Below are some of the tax problems that often catch people by surprise, and why they happen.

GST Can Get Messy Quickly GST feels straightforward at the start. Register, add ten per cent, and lodge your BAS. Early on, that approach works.

Issues arise with private purchases, mixed supplies, or how income is recorded, whether cash or accrual. These mistakes often repeat across multiple BAS lodgements. Fixing them later can be stressful. This is often when a tax lawyer in Perth Australia steps in to correct issues before the ATO takes action.

PAYG and Super Can Slip Through the Cracks PAYG withholding and superannuation can feel manageable until staff are hired. Many owners assume payroll software or a bookkeeper handles everything. That assumption can be expensive.

Contractors add further complexity. Regular hours or use of company tools can affect how the ATO classifies them. The rules are strict, and mistakes often lead to unexpected tax bills. When this happens, many businesses seek advice from the best tax lawyer in Perth to assess their exposure and deal with the ATO.

Deductions Are Easy to Get Wrong Claiming deductions is common, but it is also where many errors occur. Home office expenses, vehicle costs, and equipment claims all have limits. Personal use must be apportioned correctly, and those limits can change over time.

Poor record keeping makes matters worse. Receipts go missing. Logbooks are incomplete. Estimates replace accurate figures. If claims cannot be supported, the ATO may deny them. Firms like Munro Doig often assist business owners to review past claims and amend returns before issues escalate.

Provisional Tax Can Hit Cash Flow Hard Provisional tax surprises many business owners, particularly in the early years. A strong first year can trigger advance tax payments for the next. If income drops later, those payments may still be required, placing pressure on cash flow.

Late Lodgements Matter More Than You Think Missing deadlines does not always cause immediate problems, which can be misleading. Penalties accumulate. Interest continues to accrue. Over time, the ATO becomes less flexible. A late BAS or return can quickly escalate if ignored. Staying compliant is less about perfection and more about acting early and communicating.

Managing finances across international borders is a common reality for many Australians, whether through family connections, past overseas employment, or global investment strategies. For Perth residents in particular, offshore income and assets are increasingly common. However, the Australian Taxation Office (ATO) operates a highly sophisticated and rigorous system for identifying and monitoring wealth held outside Australia.

For Australian tax residents, the general rule is simple but far-reaching: you are taxed on your worldwide income. Navigating the disclosure requirements for foreign income and offshore assets is not just about meeting compliance obligations; it is about avoiding the severe penalties that can arise from non-disclosure or incorrect reporting.

The Scope of Worldwide Income

If you are an Australian resident for tax purposes, you must declare all income earned globally in your annual tax return. This includes foreign employment income, interest earned on offshore bank accounts, dividends from international shareholdings, and rental income from overseas properties. Even where tax has already been paid in another country, the income must still be disclosed to the ATO.

Australia has entered into Double Taxation Agreements (DTAs) with many countries to reduce the risk of double taxation. In most cases, taxpayers can claim a Foreign Income Tax Offset for tax paid overseas. However, calculating these offsets correctly requires careful interpretation of both Australian tax law and international treaties, often making professional advice from a tax lawyer Perth Australia essential.

Asset Disclosure and the Data Mesh

The ATO does not rely solely on taxpayer disclosures. Australia participates in the Common Reporting Standard (CRS), under which more than 100 jurisdictions automatically exchange financial account information. As a result, the ATO regularly receives data from foreign financial institutions regarding accounts held by Australian residents. Any mismatch between this information and your tax return can quickly trigger audit activity.

Capital gains tax (CGT) also applies to the disposal of offshore assets. Whether selling overseas property or shares listed on foreign exchanges, gains must be calculated in Australian dollars. Exchange rate movements can significantly affect the taxable outcome, making accurate timing and conversion critical. Working with the best tax lawyer Perth helps ensure these calculations comply with legislative requirements and ATO expectations.

Penalties and Voluntary Disclosures

Failure to disclose foreign income or assets can result in serious consequences. In addition to back taxes and interest, the ATO may impose administrative penalties of up to 75% of the tax shortfall where deliberate non-compliance is identified. In extreme cases, criminal prosecution may apply.

That said, the ATO generally takes a more lenient view where taxpayers make a voluntary disclosure before enforcement action begins. Penalties may be substantially reduced, but the process must be handled carefully. Munro Doig specialises in guiding clients through voluntary disclosures and complex cross-border tax matters, helping protect their interests while resolving compliance issues.

ATO attention often begins quietly. A “review” letter seeking clarification on deductions, GST credits, or residency status can foreshadow a formal audit. Data matching alerts arise when third-party information from banks, sharing-economy platforms, or payroll systems does not align with lodged returns. Unexplained delays in refunds, repeated requests for the same documents, or portal messages about outstanding activity statements are further hints that issues are brewing.

Notices That Escalate Risk

Certain documents mean the stakes have lifted. Director Penalty Notices for unpaid PAYG withholding or super guarantee are time-critical and can expose directors personally. Excessive or inconsistent BAS revisions attract close scrutiny. Garnishee notices, default assessments, and departure prohibition orders signal that the ATO believes a debt is due and payable.

Practical Triggers to Seek Advice Early

Engage counsel before responses go off track. If the ATO asks for broad categories of emails, board papers, or financial models, targeted objections may be needed to protect legal professional privilege and confidentiality. Disputes involving trust distributions, Division 7A, thin capitalisation, transfer pricing, or crypto transactions rarely resolve themselves. Cash-based businesses, labour-hire arrangements, and property developments draw focused attention, and errors with GST grouping or margin scheme elections can cascade into assessments.

How A Tax Lawyer Can Change the Trajectory

Specialist advice reframes the discussion, narrows the issues, and sets ground rules for information exchange. A lawyer can conduct a confidential internal review, coordinate expert valuation or forensic accounting, and draft responses that address the ATO’s technical position rather than chasing side points. Where the facts allow, voluntary disclosure can limit penalties. If the matter proceeds, objections preserve rights and keep the pathway to review open at the Administrative Appeals Tribunal or the Federal Court.

Choosing Representation In Perth

For local expertise, many businesses look to a tax lawyer in  Perth Australia with experience across Western Australian industries and the ATO’s compliance programs. Credentials matter, but so does practical judgement about settlement ranges. Check that your adviser explains risks in plain English, budgets the stages of work, and is prepared to escalate if a fair outcome cannot be negotiated.

Preparing Before the First Meeting

Bring the full paper trail: notices, correspondence, working papers, valuation reports, and cloud-ledger exports. Reconcile lodged positions to bank statements and payroll records. Identify emails that include legal requests for advice, as they may fall within privilege once a lawyer engages with the matter. Map the timeline, including lodgment dates, amendments, and payment arrangements, so strategy can address both liability and debt management.

When Escalation Becomes Necessary

If the ATO issues position papers that misstate facts, or your refund is held pending “further verification” for months, it is time to escalate. Objections must meet statutory form and time limits. Alternative dispute resolution can still resolve valuation or factual disagreements, yet entrenched technical issues sometimes require litigation. For complex disputes, Perth clients often turn to Munro Doig, a firm known for guiding matters from review to resolution.

A Measured Next Step

Bankruptcy under the Bankruptcy Act offers a structured reset for individuals while creditors, including the ATO, are treated consistently. The practical question is what becomes of existing and future tax liabilities once you file. Rules differ by debt type, timing and conduct, so personalised advice matters; a tax lawyer Perth Australia can help you map the pathway before you commit to any step.

Provable ATO Debts and Release on Discharge

Most unsecured ATO debts are provable in bankruptcy. That list usually includes income tax, GST, PAYG withholding shortfalls, the general interest charge and administrative penalties. Once you enter bankruptcy, recovery action for those pre-bankruptcy sums generally pauses, although the ATO can set off refunds against what you owe. After the standard three-year period, discharge will ordinarily release these liabilities unless they were incurred by fraud or an offence.

Debts That Survive Bankruptcy

Not every government liability is wiped. Family law maintenance remains payable. Court-imposed fines and penalties stay on foot. HELP and other study or training loans continue after discharge. If a tax debt arose through fraudulent conduct or false statements, it can survive and the ATO may pursue it once you are discharged.

Directors and Business Exposures

If you were a director, the Director Penalty Regime can make you personally liable for certain company amounts, including PAYG withholding, net GST and super guarantee. Whether a resulting penalty is provable depends on timing and the type of notice issued. This area is technical and time-sensitive; prompt advice reduces the risk of avoidable personal exposure.

Lodgements And Post-Bankruptcy Obligations

Bankruptcy does not remove the duty to lodge returns. Keep lodging on time for all periods, including during bankruptcy. New liabilities that arise after the commencement date are outside the bankruptcy and remain payable in the ordinary way. If your assessable income exceeds the statutory threshold, you may also need to make income contributions to your trustee, which is separate from tax.

Interest, Penalties and Practical Dealings with the ATO

Interest and penalties attached to pre-bankruptcy provable debts are typically dealt with inside the estate. For active disputes, consider whether an objection or review can still be pursued and whether a stay or administrative deferral is sensible. Clear records and candid cash-flow information help in day-to-day engagement with the ATO and your trustee.

Steps to Take Before and After Filing

Capital Gains Tax (CGT) can take a big bite out of your profits when you sell real estate in Australia. However, several legal strategies can help reduce or eliminate this tax. Here's how property owners can approach CGT more effectively.

Use the Main Residence Exemption

The easiest way to avoid CGT is by claiming the main residence exemption. If you live in the property from the time you buy it until the time you sell it, you can often sell it without paying CGT. The exemption applies only if the property has not been used to produce income, such as through renting.

Apply the Six-Year Rule for Rental Properties

If you move out and rent the property, you can still treat it as your main residence for CGT purposes for up to six years. This is called the six-year rule. You must not treat any other property as your main residence during this period. Selling within that six-year window can allow you to avoid or significantly reduce CGT.

Hold Property for Over 12 Months

Property owners who sell after owning for at least one year may qualify for a 50% capital gains discount. This benefit applies to individuals and trusts but not companies. Holding for more than 12 months lowers the assessable capital gain and can significantly reduce your tax liability.

Consider Superannuation Structures

Some investors choose to purchase real estate through a self-managed super fund (SMSF). Selling property within an SMSF may lead to lower tax rates, especially if the fund is in pension phase. A tax lawyer Perth Australia investors consult with can offer advice on setting up or managing property through an SMSF.

Offset Gains with Capital Losses

You can reduce your capital gain by using capital losses from other investments. If you sold shares or other property at a loss, those losses can offset your real estate gain. This tactic can reduce the amount of tax owed on the property sale.

Time the Sale Strategically

If you have a year with lower income—perhaps due to reduced work or retirement—selling during that period may result in a lower marginal tax rate. Since CGT is added to your assessable income, this timing strategy can reduce your overall tax payable.

Keep Records of All Property Costs

Your cost base includes more than just the purchase price. It also covers legal fees, stamp duty, agent commissions, and capital improvements. Keeping accurate records helps you increase your cost base and reduce the capital gain. Every legitimate cost counts.

Seek Professional Legal Guidance

Capital Gains Tax rules can be complex. Consulting with the best tax lawyer Perth offers is a smart step for property owners. Firms like Munro Doig provide tailored advice that helps clients structure property transactions to reduce tax impact.

Final Thoughts

Joint ventures can be a powerful way for businesses to collaborate, pool resources, and achieve shared goals. However, they also come with inherent risks that, if not addressed, can lead to disputes, financial losses, or even the failure of the venture. This is where the expertise of the best tax lawyer in Perth becomes crucial. Below are the top five risks in joint ventures and how a commercial lawyer can help mitigate them.

1. Ambiguity in Roles and Responsibilities

One of the most common risks in joint ventures is the lack of clarity regarding each party’s roles and responsibilities. Without a detailed agreement, confusion and conflicts can arise, particularly when things don’t go as planned.

Solution: A commercial lawyer ensures that the joint venture agreement clearly defines each party’s obligations, decision-making powers, and areas of accountability. Firms like Munro Doig specialise in drafting agreements that leave no room for misinterpretation.

2. Unequal Contributions

Joint ventures often involve partners contributing different levels of capital, resources, or expertise. Disputes can arise if these contributions are not fairly valued or recognised.

Solution: A skilled commercial lawyer can include terms in the agreement that accurately reflect the value of each partner’s contributions and outline profit-sharing mechanisms to maintain fairness. They also establish procedures for re-evaluating contributions over time.

3. Financial and Tax Risks

Taxation is a critical aspect of joint ventures that can significantly affect profitability. Partners may face unexpected tax liabilities if the agreement does not account for applicable tax laws.

Solution: Involving a tax lawyer Perth Australia ensures that the joint venture complies with all tax regulations. Whether it’s GST, income tax, or international tax considerations, a lawyer helps structure the venture in a tax-efficient manner. The expertise of a tax lawyer can also prevent future disputes with tax authorities.

4. Intellectual Property (IP) Disputes

When joint ventures involve innovation, technology, or proprietary processes, disputes over ownership of intellectual property can jeopardise the partnership.

Solution: A commercial lawyer ensures that all IP-related issues are addressed upfront. They can draft clauses that define ownership, usage rights, and licensing terms for any intellectual property created during the venture. This reduces the likelihood of conflicts and protects the interests of all parties.

5. Dispute Resolution Challenges

Conflicts are inevitable in joint ventures, and without a clear dispute resolution mechanism, they can escalate into lengthy and expensive legal battles.

Solution: A commercial lawyer includes robust dispute resolution clauses in the agreement, such as mediation or arbitration procedures. This ensures that disagreements are resolved quickly and cost-effectively, preserving the business relationship.

The Role of a Commercial Lawyer in Joint Ventures

A joint venture’s success depends on a solid legal foundation. Firms like Munro Doig provide comprehensive legal services to address risks and ensure compliance. Whether drafting contracts, handling tax matters, or resolving disputes, an experienced lawyer helps safeguard the interests of all parties involved.