Background: Michael and his brother John (a foreign resident) are planning to invest in a large block of land, worth about $10 million. The estimated gross profit would be $2.5 mil. The brothers were needing professional advice on tax planning to effectively control the overall tax rate to under 25%.

How we went: After the initial evaluation, the team at Wise Choice Partners pinpointed a few challenges. John was not an Australian Resident. As a result, not only he would need to pay an extra 8% foreign purchaser stamp duty but also he would not be able to take any advantages of the 50% capital gain discount. To tackle these challenges, we developed and implemented a series of comprehensive plans.

We organised for John to pay 10% interest withholding tax instead of 8% foreign purchase stamp duty surcharge. We utilised the combination of family discretionary trust, bucket company and self-managed super fund in order to take full advantage of the capital gain discount We incorporated some tax in future years after the capital event so that the tax free threshold for all family members can be fully utilized. As a result, we successfully achieved an overall 10% project tax rate on the 2.5mil profit. This result largely exceeded Michael's goal and the clients were beyond satisfied!