As with any professional career trajectory, the needs of a lawyer will change over time. What may commence as a simple annual tax return can swiftly progress into a much more complex undertaking. There may be tax effective structures such as trusts, companies and super funds to be established for investment and asset protection purposes.
To this end, tax and cash flow planning is crucial. Tax planning is vital to reduce the amount of tax that would otherwise be payable, which can be safely strategised using a variety of techniques. We have put together some of the key accounting and financial areas that need to be considered when transitioning to partnership.
Setup Investment and Tax
Strategies to Minimise Tax
Build financial security through investing in asset classes that suit your risk profile. Setup the appropriate investment and tax structures to help with tax minimisation.
Nominate a Person or
Entity for the Service Trust
Nominate a person or an entity such as a discretionary trust to be the unit holder of the service trust, giving you the flexibility to distribute some of your income and save on tax.
Ensure you and your Family
are Financially Secure
You should consider risk insurances such as income protection and life insurance, particularly if you have young children or starting a family, to ensure you and your family are financially secure.
Manage and Plan
your Cash Flow
Cash flow planning is critical to ensure that you have set aside enough cash to pay your tax. A common strategy is to leave cash in an offset account if you have a home loan to reduce the yearly interest.
Prepare for your
In the first year you will receive gross income, which means you will need to calculate your likely tax liabilities and put this aside. Timely tax preparation will ensure you make the correct distributions annually and remain compliant.
You are now responsible for paying your own super payments and will need to consider how much you would like to put into your super fund. It could give you tax deductions of 47%, provided you are on the highest marginal tax rate.
Book A Complimentary Meeting
Expert lawyer focused guidance from accountants that understand the law industry. If you would like more information or to discuss this further please contact us on 03 8419 9800 or book a meeting using the form below.
Wilson Pateras Specialise in Accounting, Tax &
Financial Advice for Law Professionals
A proactive, strategic financial plan specific to your career trajectory within the legal category:
one that looks beyond mere taxation compliance with a focus on wealth management.
General Legal Counsel
Wilson Pateras recommend that legal professionals seek expert guidance from accountants who understand their professional category and take time to appreciate their personal circumstances. Having this dual-faceted knowledge is key to creating premium outcomes for lawyers – that’s why Wilson Pateras’ accountants and advisors familiarize ourselves with our legal client’s career goals and financial aspirations. The legal career path is a unique one: any tax or wealth management strategy you might put in place should match with your professional objectives.
Engaging an expert lawyer-focused accountant advisor to review and discuss these matters ensures you’ll be making the correct distributions annually and remaining compliant with ATO guidelines. Doing so sooner than later allows your financial strategy to mirror that of your career progression.
Having worked with legal professionals at various stages of their career trajectory, Wilson Pateras know that consulting with expert accountants will only ever be to a lawyer’s benefit. Knowledge means the power of better decision-making, leaving you to progress your career with confidence – the aim of every lawyer!
Wilson Pateras can:
Plan your tax payments
Plan your cash flow
Prepare and lodge your tax returns
Manage all ATO correspondence
Ensure you meet compliance obligations
Recommend appropriate investment and tax structures
Setup and manage your super fund
Advise on investment classes that suit your risk profile
Advise on appropriate insurance
Provide you with bookkeeping services
Reduce the burden placed on your time