Industry Focus

INDUSTRY PRACTICE reduced in many cases. When considering share investments with an average yield around 4 per cent, interest on loans at around 6 per cent will offer limited negative gearing. Likewise, residential properties that are currently offering yields higher than historical averages are also providing only marginal tax savings to investors. The use of a discretionary investment trust to own property and share investments can be beneficial in that, when combined with the use of a corporate trustee, there is excellent asset protection. Assets are isolated from the individual and, therefore, they are difficult for creditors to attack. This type of trust is also beneficial because distributions are made at the discretion of the trustee and can be made in the most tax-effective manner. Capital appreciating investments held for more than a year can still apply the general 50 per cent exemption of capital gains tax. Importantly, this concession does not currently apply to a company. Therefore, there would be only very limited circumstances under which a personal investor would consider acquiring an asset under a company ownership. Many doctors in practice are aware of the benefits of superannuation that allow them to invest in an asset-protected, low-tax environment. The suitability of superannuation as an investment should be considered with regards to each doctor's personal circumstances. William Buck is a network of independent chartered accounting firms in Australia and New Zealand. Paul Copeland is a Director in the firm's Business Advisory Division and is responsible for assisting clients with accounting, taxation and business advisory requirements. Paul also assists with medical practice compliance, practice valuations, practice sales and acquisitions, establishing group practices, benchmarking and financial reporting. He has worked with the Queensland bodies of the Australian Medical Association and the Australian Dental Association. Healthcare • Issue 3 5

• Cover