Do I need an accountant or financial advisor? It’s a question we get asked frequently. You want smarter money decisions, fewer surprises at tax time and a clear path to your financial goals. The question is who should be on your team. An accountant turns your numbers into compliant, dependable insights that help you run a better business. A financial advisor builds the strategy for wealth creation, superannuation and protection so you can reach life milestones with confidence.

We often get questions from our clients about the role of an accountant vs financial advisor. So we thought we’d explain the distinctions between the two roles, clarify what a financial planner does and show how the two work best together for business owners and families across South East Queensland.

What’s The Difference Between An Accountant and A Financial Advisor?

When it comes to managing your finances, understanding the difference between an accountant and financial advisor is helpful. Each professional brings unique expertise to the table.

  • Accountants focus on tax, compliance, reporting, business structures and performance.
  • Financial advisors focus on personal wealth creation strategy, investments, superannuation and insurance to achieve life goals.

It’s also important to highlight that some accounting firms also offer business advisory services. This can include support in areas such as business coaching, business succession planning and external CFO services.

And full service accounting firms may also offer Audit and Assurance services that some organisations require to fulfill statutory and regulatory requirements.

For many individuals and business owners the best results come from a joined-up approach.

What Do Accountants Do?

Accountants play a crucial role in the financial health of any business and help individuals and businesses stay on the right side of the Australian Taxation Office (ATO). Their main focus is on maintaining accurate financial records and using them to help you make better decisions. Typical areas include:

  • Preparing and lodging tax returns and BAS through a registered tax agent
  • Choosing and maintaining business structures including asset protection strategies
  • Delivering financial statements, cash flow, budgets and forecasts
  • Tax planning, capital gains tax, payroll, FBT and GST
  • Management reporting and performance improvement for SMEs

Explore more:

 

What Does A Financial Planner Do?

A financial planner, also known as a financial advisor (or adviser) creates a plan to help you achieve personal or family financial goals, then keeps you on track. They help guide your longer term financial strategies including investment management and retirement planning. Typical areas include:

  • Setting goals and shaping a long-term financial plan
  • Investment strategy development
  • Retirement planning and superannuation strategies
  • Intergenerational wealth management
  • Cash flow, debt and savings strategies
  • Risk management and estate planning
  • Personalised financial advice
Accountant Vs Financial Advisor Table Of Differences

Why it matters: Accountants keep the financial engine room accurate and efficient. Financial Advisors help you choose where the ship is heading and why.

Accountant Vs Financial Advisor: Do You Need One, The Other or Both?

For many people it is rarely either-or. The strongest outcomes come when your accountant and financial advisor work together:

  • Tax-aware investing: Advisors propose strategy. Accountants assess tax impacts and structure choices.
  • Business and personal wealth: Accountants optimise the business. Advisors help convert profits into long-term wealth and retirement income.
  • Risk and compliance: Advisors recommend cover. Accountants ensure premiums and structures are efficient for tax and cash flow.

Sometimes, the synergy of both an accountant and a financial adviser can significantly benefit your finances. Each professional brings unique expertise, ensuring comprehensive financial management.

Key collaborative benefits include:

  • Holistic financial management
  • Seamless strategic and compliance integration
  • Enhanced financial stability and growth potential

Ultimately, leveraging their combined expertise helps ensure sustainable business growth and resilience.

When You Might Need An Accountant

An accountant is essential for most businesses, especially during periods of business expansion or restructuring. Their role ensures your financial operations align with regulatory standards and best practices.

  • Starting, restructuring or selling a business
  • Tax planning before 30 June and year-end compliance
  • Managing payroll, GST, FBT and CGT events
  • Building robust budgets, cash flow and management reports
  • Navigating ATO correspondence or complex lodgements
     

When You Might Need A Financial Advisor

A financial advisor is helpful for long-term financial planning and strategy development. Consider hiring one when you need guidance on investment opportunities, retirement planning, or wealth management.

  • Creating an investment plan and selecting diversified assets
  • Consolidating super and planning contributions
  • Structuring retirement income and pensions
  • Setting up risk cover that suits your life stage
  • Managing an inheritance or business sale proceeds

Tip: Your accountant and financial planner can and should be linked up and communicate. Ask your financial advisor to share their plan with your accountant so structures and tax outcomes line up with the strategy.

Can Accountants Give Financial Advice?

Accountants often face the question: Can accountants give financial advice? The answer is yes, but it’s nuanced.

They primarily offer advice on tax efficiency and financial reporting. This includes suggesting ways to minimise tax liability.

However, their advice is usually centred around compliance and financial accuracy. It doesn’t typically include investment strategy or wealth management.

In summary, accountants can guide you on:

  • Tax planning and strategy
  • Financial reporting and compliance
  • Cash flow management

For broader financial planning, a financial advisor needs an Australian financial services (AFS) licence to be able to provide personal financial advice and recommendations. Both professionals can complement each other for optimal financial health.

FAQs About Accountants and Financial Advisors

Accountants focus on tax, compliance and business performance using your financial data. Financial advisors focus on long-term personal strategy, investments, superannuation and insurance.

Yes and it’s usually beneficial when your accountant and financial advisor collaborate and communicate to deliver optimum financial efficiency and outcomes.

No – accountants can give general tax-related guidance. Personal financial product and investment advice is provided by licensed financial advisers who issue a Statement of Advice.

Not usually. Only registered tax agents prepare and lodge tax returns for a fee. Your advisor and accountant should collaborate so recommendations are tax-aware.

Both professionals offer distinct benefits but, for many people, using them both usually results in better financial outcomes. When you are navigating significant changes such as business sale, retirement planning or significant investment changes, it’s always advisable to engage both an accountant and a financial advisor. The advisor sets strategy and the accountant optimises structure and tax.

Check credentials, be clear on scope and fees, and confirm how they will collaborate. Ask for an engagement letter from your accountant and a Financial Services Guide from your advisor.

How MGI South Qld Can Help

As a full service accounting firm we offer the full range of accounting services to support business owners, professionals and families across South East Queensland including tax compliance, CFO advisory, business coaching and mentoring and audit and assurance.

We also have a network of professionals including financial advisors, lawyers and bookkeepers, that we can link our clients with to ensure a ‘joined up’ financial strategy.

At MGI we help businesses and individuals across SE Qld including Brisbane, the Gold Coast and Sunshine Coast with the full range of accounting and business advisory services.

Scion Private Wealth is a Brisbane financial advisor and a trusted referral partner of MGI South Qld. They support many of our clients with retirement planning, investment management, intergenerational wealth management and integrated tax planning services.

Whatever your financial needs, contact us today so we can help you to make smart, informed financial decisions.

What is Division 296 Tax?

Division 296 tax is a new superannuation tax measure that was introduced by the Australian Government, targeting individuals with super balances exceeding $3 million. Under this new tax measure, individuals with more than $3m super balance, will be subject to additional 15% tax on earnings associated with the portion of superannuation balances above the $3 million threshold. These earnings included both realised and unrealised gains whether the assets were sold or not.

What Has Changed?

After months of debate and industry feedback, the Government has finally revised its proposed Division 296 tax legislation. The changes reflect a more balanced approach to taxing high superannuation balances, with key updates that address concerns around fairness, practicality, and timing.

Key Superannuation Tax Changes Announced

  • Delayed Start Date:
    The new Division 296 tax will now commence from 1 July 2026, with the first assessment date being 30 June 2027.
  • Tiered Tax Thresholds Introduced:
    • 15% tax on earnings attributable to super balances over $3 million
    • Additional 10% tax (adding upto 25%) on earnings attributable to balances over $10 million
  • Indexation of Thresholds:
    Both thresholds will be indexed to inflation, increasing in jumps of $150,000 and $500,000 respectively.
  • No Tax on Unrealised Gains:
    A major win for members – earnings for Division 296 purposes will exclude unrealised capital gains, removing the risk of tax bills without liquidity. However, there is still uncertainty around how realised vs. unrealised gains will be treated, especially for assets held before the start date.

How Will Earnings Be Calculated?

Super funds will calculate earnings based on taxable income, aligned with existing tax principles. There’s flexibility for funds to use a “fair and reasonable” approach, especially for large or complex funds. We will have to watch the space for more details around capping realised gains post 30 June 2026 and how the valuation methods will be applied to different asset classes. 

Impact on Defined Benefit Members

Defined benefit pensions will now be valued using family law valuation methods, replacing outdated formulas. This change affects both SMSF and non-SMSF members and may significantly alter total super balance calculations.

Example: Impact of Division 296 on a $12 Million Super Balance

To illustrate the impact of the new tiered Division 296 tax system, consider a member with a $12 million superannuation balance as at 30 June 2027.
Under the revised rules:
  – 75% of the members’ super is over $3m ($12m – $3m is $9m, bringing it to 75% of total super balance of $12m), and
  – 16.67% of the members’ super is over $10m ($12m – $10m is $2m, bringing it to 16.67% of total super balance of $12m)
  – The fund generated a combination of general income and realised capital gains, of which $700,000 is attributed to the member. The fund has already paid 15% tax on this taxable income.

Calculation of Division 296 tax:

  – $700,000 × 15% × 75% = $78,750
  – $700,000 × 10% × 16.67% = $11,669
Total Division 296 tax payable: $78,750 + $11,669 = $90,419

This example highlights the importance of strategic planning for members with high superannuation balances to manage tax liabilities effectively.

Final Thoughts

While the revised Division 296 tax is a step forward, it still presents challenges – especially for those with super balances exceeding $10 million. The removal of unrealised gains from the tax base is a welcome relief, but the higher tax rate and complexity of earnings calculations mean strategic planning is essential.

Please reach out to MGI tax accountants and consultants if you have any questions or contact us on (07) 3002 4800.

When a business collapses only to reappear under a new name, it can raise serious red flags – especially if debts, taxes and employee entitlements have been left behind. This practice is known as phoenixing. While there are legitimate reasons for winding up and restructuring a business, illegal phoenix activity is a different story. It involves directors deliberately shutting down one company to avoid paying debts then starting a new entity to continue trading. The Australian Taxation Office (ATO) and regulators have a close focus on this practice, as it undermines fair competition and leaves creditors, staff and the community out of pocket. But what is phoenix activity and how can business owners identify and protect themselves from illegal operators?

The ATO and Australian Securities and Investments Commission (ASIC) are actively pursuing this issue. They are increasing scrutiny and enforcement actions against phoenix companies. As a business owner, knowing the signs of illegal phoenix activity can help you avoid potential issues that may leave you financially exposed.

What Is Phoenixing?

The term phoenixing comes from the mythical bird, known for rising from its ashes but what is a phoenix business?

Phoenixing a company means resurrecting, restructuring or renewing it and describes companies that are liquidated only to be reborn as new entities. It refers to a company that is deliberately shut down and replaced by a new one, often with the same directors, to continue operating without the burden of previous debts.

Not all phoenix activity is unlawful. In some cases, directors may legitimately close a failing business and start again, provided they meet their obligations to employees, creditors and the ATO. The problem arises when this process is used to deliberately avoid paying debts. Illegally phoenixing a business typically leaves creditors, suppliers, staff and the community at a loss, while the directors continue trading through a fresh company.

How Illegal Phoenix Activity Works in Practice

Illegal phoenixing usually follows a clear pattern. A company is deliberately wound up with outstanding debts to the ATO, suppliers or employees. Its assets may be transferred to a related entity at little or no cost, while the directors quickly establish a new business that looks much the same as the old one. From the outside, it can appear as though nothing has changed – same staff, same premises, sometimes even the same trading name – yet the original debts are left behind.

This practice is most often seen in industries where cash flow is tight and competition is fierce, such as construction, labour hire, transport and hospitality. It allows unscrupulous directors to gain an unfair advantage by cutting costs they legally owe, while their competitors are left carrying the full burden of tax, wages and supplier payments.

The fallout extends far beyond the immediate business relationships. Employees can lose unpaid wages and superannuation, creditors are left chasing debts that will never be recovered, and the broader economy suffers when millions in tax revenue is lost.

How Can You Spot Illegal Phoenixing?

There are some common tactics employed in a phoenix company that can be red flags to be aware of and help protect your business both financially and reputationally.

Red Flags to Watch For:

  • Regular creation of new companies for specific projects
  • Minor variations to a company name but with the same address and owners
  • Recurrent insolvency without genuine reasons
  • Appointing ‘dummy’ directors to protect actual players from legal consequences
  • Unexplained transfer of assets at undervalue
  • Patterns of director resignations before liquidation
  • Recent changes in management or legal structure
  • Business owners offering unusually low prices to win contracts

Records might be obscured or destroyed, making it difficult to trace financial histories. This deliberate concealment complicates investigations and recovery efforts. Affected parties, including the ATO, struggle to reclaim outstanding debts. This results in significant economic losses and undermines the integrity of honest businesses.

How Can Businesses Protect Themselves From Illegal Phoenix Activity?

Illegal phoenixing often leaves others to pick up the pieces, but there are steps that businesses can take to reduce their risk.

  • Do your due diligence – before entering into contracts, check the background of the company and its directors. ASIC registers and ABNs can provide useful insights as well as Directors Identification Numbers (DINs).
  • Look out for warning signs – frequent changes of company name, directors or ABN, unexplained asset transfers or a history of unpaid debts may indicate phoenix behaviour.
  • Get agreements in writing – Clear contracts that outline payment terms and responsibilities can help if disputes arise.
  • Monitor payments closely – Be cautious of customers who consistently delay or avoid paying invoices.
  • Amend credit terms – pursue outstanding debts and amend credit terms for any supplier you hold concerns about.
  • Implement strong internal controls – regular audits can help identify irregular or fraudulent activity among suppliers.
  • Seek advice early – If you suspect a business relationship could be at risk, professional advice can help you take protective measures.

For directors themselves, the best protection is to stay compliant. This means maintaining accurate records, lodging tax returns on time, paying employee entitlements and seeking professional help if financial difficulties emerge. Acting early often opens up more legitimate restructuring options and reduces the risk of breaching the law.

Engaging professional advisers can also help. They offer insights into potential risks and ensure you aren’t unwittingly involved with a phoenix company. Taking proactive measures can help avoid financial harm for your own business.

Professional Support Benefits:

  • Identify potential risks early
  • Ensure compliance with regulations
  • Receive up-to-date advice on best practices
graphic showing how illegal phoenix activity works

The Impact of Illegal Phoenix Activity on Small Businesses and the Economy

Illegal phoenixing is a significant issue in Australia, costing the economy billions each year. It affects small business owners who may unknowingly engage with phoenix companies. In fact, according to the ATO illegal phoenix activity costs the economy in the region of $4.89 billion annually.

Because of the damage it causes, illegal phoenix activity is a top priority for regulators. The Australian Taxation Office (ATO), ASIC and other government agencies work together to detect and prosecute directors who attempt to walk away from their obligations.

Illegal phoenix activity distorts fair competition, allowing dishonest companies to undercut rivals who fulfil their obligations. For small businesses, the ripple effects can be devastating. Suppliers and contractors might face unpaid invoices, affecting their cash flow and sustainability. This financial strain can lead to broader economic issues, including job losses.

Key Differences Between Legal Restructuring and Illegal Phoenixing

It is important to understand that not every business that closes and starts again is acting illegally. Sometimes companies genuinely face financial difficulty and need to restructure to survive. If handled correctly, this process can be completely lawful and even in the best interests of creditors and employees.

The distinction lies in intent and compliance. Legal restructuring follows proper processes, such as voluntary administration or liquidation, with assets sold at fair value and proceeds distributed to creditors in line with the law. Employees are paid their entitlements and directors meet their reporting and tax obligations.

Illegal phoenixing, on the other hand, occurs when directors deliberately avoid these responsibilities. Assets may be transferred for less than market value or not recorded at all, creditors and staff are left unpaid, and the directors attempt to carry on trading as if nothing has happened.

By recognising the difference, business owners can ensure they restructure in a way that is both compliant and transparent, avoiding the serious penalties linked to illegal phoenix activity.

How MGI South Qld Can Help

Having a business partner you can trust in your corner can reduce stress and anxiety if you suspect you’re in business with phoenix operators. Our team can:

  • Help you with due diligence to minimise risks to your business
  • Provide timely advice on dealing with the situation if you suspect you’re dealing with illegal operators
  • Support directors in meeting their governance responsibilities
  • Provide advice on restructuring options that protect your business and meet your obligations
  • Assist with cash flow and tax planning to avoid financial stress

By working with us, you can get timely advice on the correct steps to take should you fall victim to scam operations. If you are concerned about potential exposure to phoenix activity – whether within your own company or through dealings with others – our advisors are here to help you take the right steps.

Key Takeaways for Small Business Owners

Understanding phoenix activity is crucial for protecting your business. Staying aware enables you to minimise the risks of doing business with illegal operators.

Here are important points to keep in mind:

  • Conduct thorough due diligence on potential business partners.
  • Maintain clear and precise financial records.
  • Seek professional advice from tax advisers to stay compliant.

These practices help avoid unintentional involvement in illegal phoenix activities. They also safeguard your business interests and reputation.

The Australian Government has mandated sustainability reporting starting from 1 January 2025 for certain entities. The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, which amends the Corporations Act 2001, requires entities to include sustainability reports in their annual reports if they meet certain criteria. Let’s take a look at the Australian Sustainability Reporting Standards, specifically AASB S2, the climate disclosure standard and what it means for your organisation.

Who is impacted by the new mandatory climate reporting in Australia?

Australian entities required to prepare and lodge a financial report with the Australian Securities and Investments Commission (ASIC) under Chapter 2M of the Corporations Act 2001 must prepare a sustainability report if they meet certain criteria (see table below)

table identifying entities who are affected by the changes to the Australian Sustainability Reporting Standards

Whilst Group 1 companies are at the larger end of town, MGI South Qld works with a number of Group 2 and Group 3 companies that will be impacted by this legislation.

Mandatory climate reporting: what is required to be included in a Sustainability Report?

These companies are required to provide a sustainability report from financial year 2027 and 2028 for Group 2 and Group 3 entities respectively. This report should include:

  • A climate statement
  • Notes to the climate statement
  • Directors’ declaration

Climate Statements must include information on climate-related risks and opportunities in line with AASB S2 – Australian Sustainability Reporting Standard. This requires information to be provided on the following:

  • Material climate-related financial risks and opportunities faced by the entity (if any);
  • Scope 1, 2 and 3 Green House Gas (GHG)* emissions and any associated reduction targets;
  • Any information about governance of, strategy of or risk management by the entity in relation to these risks, opportunities, metrics and targets; and
  • An assessment of the entity’s resilience to climate-related changes, using scenario analysis.

*Scope 1 covers direct emissions from owned or controlled sources, such as Company -owned vehicles or industrial processes. Scope 2 encompasses indirect emissions from purchased electricity, steam, heating, and cooling. Finally, Scope 3 includes all other indirect emissions that occur in the value chain, such as those from suppliers or the use of products.

What is AASB S2?

AASB S2 requires entities preparing sustainability reports to only utilise all reasonable and supportable information available to them as of the reporting date, provided it can be obtained without undue cost or effort. Accordingly, when reporting Scope 3 GHG emissions, entities are not expected to provide exact data or detailed information that is unduly difficult or costly to obtain from other entities along its supply chain. ASIC has clarified that reporting entities are permitted to use estimation in measuring Scope 3 GHG emissions, and can use primary or secondary data or a combination, noting that accuracy of estimation may improve over time.

Scenario analysis will also be required to be carried out and reported against, for at least the following two scenarios:

  • the increase in the global average temperature well exceeds the increase referred to in s3(a)(i) of the Climate Change Act 2022 (Cth) (the Climate Change Act) (being an increase well below 2°C above pre‑industrial levels). According to the explanatory materials, a 2.5°C or greater scenario would satisfy this requirement. ASIC has stated there is a risk that reporting entities will not be compliant if they use a climate scenario based on an increase that is less than 2.5°C; and
  • the increase in the global average temperature is limited to the increase referred to in s3(a)(ii) of the Climate Change Act (being an increase of 1.5°C above pre‑industrial levels).

ASIC also provides additional guidance on the intent of the scenario analysis requirements, being: ‘to ensure that users have the benefit of information about the reporting entity’s climate resilience and material financial risks and opportunities relating to climate that are informed by a scenario that: (a) contemplates rapid global decarbonisation in the near term (lower global warming scenario); and (b) contemplates more pronounced climate impacts over the medium to long term‘

According to AASB S2, entities are not required to disclose commercially sensitive information about climate-related opportunities, ensuring they can protect economic interests.

What are you required to do with your Sustainability Report?

The sustainability report will need to be approved by the Directors, provided to members at an AGM and lodged with ASIC. This report will also be required to be audited.

How can we help you meet the Australian Sustainability Reporting Standards?

MGI South Qld audits a number of companies that will be impacted by the changes to the ASRS standards and has the skills and expertise to provide this additional auditing requirement in the future.

If your current audit provider is unable to provide this additional service, or you are simply looking to review your auditing requirements against the market, please contact us today for a complimentary and no obligation discussion about your auditing services.

For the 2025/26 Aged Care Finance Report, aged care providers are required to prepare a new Care Minutes Performance Statement, which must be audited by your external auditor.

The following data will be needed to complete your Care Minutes Performance Statement:

  • Quarterly labour costs – direct care (employee and agency)
  • Labour worked hours direct care (employee and agency)
  • Monthly 24/7 RN coverage percentage
  • Quarterly occupied bed days
  • Quarterly direct care minutes (worked) per occupied bed day.

In addition, you must continue to report care minutes and 24/7 RN coverage through the Quarterly Financial Report and 24/7 RN Reporting.

The audit must be conducted by a registered company auditor under the assurance standard ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information.

What you need to do

You will need to:

  • appropriately maintain your records to accurately complete your Care Minutes Performance Statement for the 2025–26 financial year
  • engage a registered company auditor to undergo an audit of the Care Minutes Performance Statement
  • submit the audited Care Minutes Performance Statement as part of the Aged Care Financial Report.

How can we help

MGI South Qld audits a number of not for profit and for profit aged care providers, and has the skills and expertise to provide this additional auditing requirement.

If your current audit provider is unable to provide this additional service, or you are simply looking to review your auditing requirements against the market, please contact us today for a complimentary and no obligation discussion about your auditing services.

Women-led businesses have the opportunity to receive up to $5,000 in funding to support business growth through training, essential equipment, and professional services.

Grant Applications Dates

Apply now from 1st September 2025 and closing at 4:00pm AEST on Tuesday, 7 October 2025. A total fund of $250,000 is available for this Lord Mayor Grant, with up to $5,000 (exclusive of GST) available per successful application. A limit of one application per business will be accepted.

Entry Guidelines

The Lord Mayor’s Women in Business Grant 2026 will provide funding to support women owned businesses to grow and develop their business.
The grant will provide an opportunity for eligible organisations to apply for funding of up to $5,000 (exclusive of GST) to build their business capability or gain professional services that will boost local economic impact.

To be eligible for this grant, you/your business must:

  • Have an active Australian Business Number (ABN) and be registered in Queensland
  • Be Headquartered/have business outlets based in the Brisbane Local Government Area (LGA) and be able to provide rates notice/utility bill/proof of location)
  • Be an Australian Resident/Citizen
  • Be a woman in business with a minimum of 50% ownership of the business.
  • Be 18 years of age (proof of ID) at time of application
  • Be operating/trading for the full financial year of 2024/25 and demonstrate more than one client
  • Not be insolvent or have owners/directors that are bankrupt
  • Have an annual turnover between $75,000 and $500,000.
  • Provide one application per business for up to $5000 (exclusive of GST and delivery fees). This is non-matched funding.
  • Provide original quotes from local Brisbane/QLD businesses where quotes proposed as part of the Grant. Supplier invoices can include GST
  • Have the Approved Use commencing after the grant is received
  • Expend the funding and have an outcome delivered for acquittal by 30 June 2026.
  • Not be a previous recipient of the Lord Mayor’s Women in Business Grant.
  • Complete grant related surveys provided periodically by BEDA, which may extend beyond the term of the Grant.
  • Participate in the 12-month business support program developed for Lord Mayor’s Women in Business Grant recipients.

What Can Be Funded?

The grant will support women to build their personal capability as a business owner, enabling their business to grow and build a sustainable, strong, local small business economy. Grants will support procurement of professional services, training and education and operationally critical business equipment.

Examples of what can be funded:

  • Procurement of professional services for:
    • Development of business strategy
    • Marketing and brand services
    • Ecommerce services
    • Financial services
    • Compliance and industry regulations relevant to business.
  • Training and Education:
    • Certification by an
    • RTO/TAFE
    • Professional development on leadership/business strategy
    • Financial literacy
    • Digital marketing
    • Expert training relevant to your business
    • Cost of running or attending a convention, expo or business learning event.
  • Business equipment:
    • Equipment that demonstrates tangible growth for your business, tool or Product that is key in delivering your business outcomes. E.g. Sewing machine for a fashion business, labelling machine for packaging, camera for photographer, etc.

All applicants will be automatically signed up to the Brisbane Business Hub community and provided with networking, education and training upskill opportunities.

For more information on the assessment criteria and application process visit the Brisbane Business Hub for further details.

Please contact the team at MGI if you have any questions or need assistance in your application.

Running a licensed club comes with unique operational challenges, from balancing operating costs to ensuring long-term sustainability. To stay on top of performance and make informed decisions, it’s essential to track financial performance metrics. These financial KPIs – or key performance indicators – give clubs a clear picture of how well they are managing resources, generating revenue and maintaining profitability. In this article, we’ll look at why financial key performance indicators matter for licensed clubs and how using them effectively can support lasting success.

By comparing these financial KPIs against industry benchmarks, club managers and stakeholders can spot strengths, identify areas for improvement and make confident decisions that drive both financial stability and member satisfaction.

What Are Financial KPIs?

Financial KPIs are not just numbers; they are the pulse of a club’s financial health. They go beyond simple profit and loss statements and provide a more detailed picture of financial health and operational efficiency, giving an overview of various aspects of a club’s performance, from income generation to cost management. 

Financial KPIs can highlight how effectively a club is converting revenue into profit, how well it is managing its expenses or how much liquidity it has to meet short-term obligations. By tracking these figures consistently, club managers and boards gain a clearer view of whether the club is meeting its financial goals.

Understanding what constitutes a financial KPI involves recognising the metrics that are most relevant to a club’s specific goals and operational context.

Types of Financial KPIs

There is a broad spectrum of financial KPIs, each serving a different purpose. Common types include liquidity ratios, profitability ratios and efficiency ratios. Clubs need to carefully select the KPIs that align with their strategic objectives, ensuring that they are measuring aspects of their operations that truly matter.

Why Peer Benchmarking Matters for Licensed Clubs

While financial KPIs are useful on their own, KPI benchmarking against industry standards is what really turns them into powerful decision-making tools. Peer benchmarking allows licensed clubs to compare their results with similar organisations and to understand whether their performance is above or below expectations.

This process helps identify strengths to build on, as well as weaknesses that may need attention. For instance, if a club’s wage-to-revenue ratio is significantly higher than the industry average, it could be a sign that staffing costs need to be reviewed. Benchmarking also helps club leaders make strategic decisions with confidence, knowing they are guided by evidence rather than guesswork.

a person at a desk with a laptop and a selection of sheets of paper spread out with financial key performance indicator charts

Why Is Financial Benchmarking Analysis Important?

Financial KPIs are crucial because they offer a clear picture of a club’s financial status. Benchmarking financial performance metrics gives licensed clubs a competitive edge. Rather than relying on assumptions, club managers and boards can make decisions based on clear evidence. This brings a number of important benefits:

Benefits of KPI Benchmarking

  • Greater transparency and accountability – financial KPIs provide a common language for boards, managers and stakeholders, ensuring everyone understands how the club is performing.
  • Improved strategic planning – by comparing financial key performance indicators against industry benchmarks, clubs can set realistic targets and measure progress more effectively. Clubs can use benchmarking insights to motivate teams and align them with strategic objectives.
  • Early identification of risks – regular monitoring highlights emerging issues such as declining revenue, rising costs or reduced liquidity before they become critical.
  • Enhanced member and stakeholder confidence – when a club demonstrates it is monitoring financial KPIs and acting on them, it builds trust and reinforces long-term sustainability.
  • Identify Strengths and Weaknesses: Benchmarking reveals a club’s competitive position, highlighting areas where it performs well and those requiring attention. It provides a clear picture of how a club stacks up against the competition.
  • Adopt Best Practices: By comparing with peers, clubs can learn from successful strategies and implement best practices to enhance their operations. This continuous learning approach fosters innovation and improvement across all areas of the club.

In short, benchmarking financial performance metrics enables licensed clubs to make smarter decisions, maintain financial stability and ensure they continue to serve their members well into the future.

Key Financial KPIs Licensed Clubs Should Monitor

Licensed clubs can benefit from monitoring a range of financial key performance indicators. Some of the most important include:

  • Gross profit margin (particularly on food and bar operations): The gross profit is calculated as the gross profit (being sales less purchases) divided by revenue. If this ratio has a trend of declining it could indicate that either costs are growing faster than revenues and it might be time to review your prices or possibly that there is an increase in spoilage of stock, due to poor inventory management, over ordering or product or slippage of stock.
  • Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) as a percentage of revenue: measures a club’s profitability by isolating its core operational performance from the effects of debt, taxes, and asset write-downs. By adding back interest, taxes, depreciation, and amortisation to a club’s net income, or by starting with revenue and subtracting operating expenses (excluding those mentioned), EBITDA provides a clear view of a Club’’s earnings potential and operational efficiency. EBITDA as a percentage of revenue then provides a profitability margin that can be compared with other clubs.
  • Cash flow from operating activities: operating activities are the core of your club. It represents your bar, kitchen, gaming and other key operations of the club (such as sporting activities etc). Cash flows from these operations are key as they show whether your club is generating enough free cash flows to fund its operations, as well as key expansion/ refurbishment plans.
  • Wages to income ratios: Wages represent one of the single biggest costs to any club. A simple analysis of total wages costs divided by total income will give you a quick and easy way of assessing whether your club is over/ under staffed, or whether wages are rising at a faster pace than revenues. This can be a powerful tool in assessing the future staffing needs of your club and one that should be monitored on a regular basis.
  • Current Asset Ratio: The current asset ratio is calculated as current assets dividend by current liabilities. It should generally always be greater than 1, which indicates that your club has at least $1 of current assets to cover every $1 of current liabilities. This calculation helps assess the solvency of the club and the ability of it to trade comfortably into the future.
  • Loan Requirements: If your club does have external debt (particularly if you have financed a recent refurbishment or extension), the bank will generally impose a number of requirements on you. Generally speaking these include a loan-to-value ratio, an interest times cover and a debt coverage ratio (earnings divided by total loan repayments). In addition the bank generally undertakes an annual review, which includes not only looking at the past year’s results of the club, but also at your forecasted budgets for the next 1-2 years. Obviously when dealing with any bank, it is critical to ensure that these covenants are monitored regularly to make sure the club has a happy and successful financial future.

Focusing on these financial performance metrics allows clubs to maintain financial stability, respond quickly to challenges and plan effectively for the future.

Implementing Financial Performance Analysis

To effectively utilise financial KPIs, clubs should implement a robust financial performance analysis framework. Here are steps to consider:

1. Define Relevant KPIs

Select financial performance metrics that align with the club’s strategic objectives and operational goals. Ensure that the chosen metrics provide meaningful insights into the club’s performance. Customising KPIs to reflect the club’s unique operational characteristics ensures relevance and actionability.

2. Collect and Analyse Data

Gather accurate financial data and analyse it regularly to monitor trends and identify areas for improvement. Utilise financial management software to streamline data collection and analysis. Regular data analysis helps clubs stay informed and make proactive decisions to enhance performance.

3. Conduct Peer Benchmarking

Compare the club’s financial metrics with those of similar clubs to assess its competitive position. Use industry reports and databases to obtain benchmarking data. Peer benchmarking provides valuable insights into industry standards and helps clubs identify areas for improvement.

4. Set Targets and Monitor Progress

Establish realistic performance targets based on benchmarking results. Regularly review progress and adjust strategies as needed to achieve desired outcomes. Setting clear targets motivates teams and aligns them with the club’s long-term vision.

5. Continuous Improvement

Financial performance analysis is an ongoing process. Clubs should continuously seek ways to improve their financial practices, adapting to changing market conditions and member needs. Embracing a culture of continuous improvement ensures that clubs remain competitive and financially sustainable.

Understanding and utilising key financial performance metrics is vital for licensed clubs aiming for sustained success. By focusing on revenue growth, profit margin, operating cash flow, and other critical metrics, clubs can make informed decisions that drive growth and stability. Additionally, KPI benchmarking offers valuable insights into a club’s competitive position, enabling the adoption of best practices and setting realistic goals. By implementing a comprehensive financial performance analysis framework, licensed clubs can navigate financial challenges effectively and ensure their long-term prosperity.

How MGI South Queensland Can Help

MGI South Qld is currently teaming up with Clubs Queensland to undertake an industry benchmarking project. The aim is to better understand the current performance, challenges and opportunities facing the Clubs industry. The information collected will be used to produce an Industry Benchmarking Report, which will provide valuable insights for clubs of all sizes and types across Queensland. This report will not only help you and your board compare your performance against industry standards, but will also strengthen advocacy on behalf of the sector.

Monitoring financial KPIs is one thing, but turning them into practical insights requires the right expertise. At MGI South Queensland, we work closely with licensed clubs to benchmark financial performance metrics, identify opportunities for improvement and build strategies that strengthen long-term sustainability.

Our team provides tailored benchmarking reports, financial KPI analysis and hands-on advisory services designed specifically for the club sector. Whether it’s improving cash flow, managing costs or enhancing revenue streams, we help boards and managers make informed decisions with confidence.

With decades of experience supporting clubs across Queensland, MGI South Queensland understands the unique challenges and opportunities within this industry. By partnering with us, your club can move beyond the numbers and focus on delivering value to members and the wider community.

If you own or operate a private company in Australia, it’s important to be aware of Division 7A (Div 7A) loans and how they affect the way you take money out of your business. Division 7A is a provision in the Income Tax Assessment Act that was introduced by the Australian Taxation Office (ATO) to prevent company profits from being distributed to shareholders (or their associates) in a way that avoids tax.

Put simply, when a private company lends money to a shareholder, makes a payment on their behalf or forgives a debt, the ATO may treat that transaction as if it were an unfranked dividend – unless it is structured correctly as a compliant loan. To remain compliant, the loan must be set out in a formal agreement, meet the ATO’s minimum interest rate requirements and follow a strict repayment schedule.

Why does this matter? Without proper planning, a simple transaction – like borrowing from your company to fund a personal expense – could lead to unexpected tax bills. Understanding Div 7A ensures business owners and shareholders can manage their cash flow efficiently while staying on the right side of the tax rules.

We get lots of questions about this so let’s break it down in detail.

What is Div 7a?

Division 7A, often shorted to Div 7a, is a set of tax rules developed by the Australian Taxation Office (ATO). It aims to prevent private companies from distributing profits to shareholders or associates of shareholders tax-free. This can include loans, payments or forgiven debts. Understanding Division 7A helps ensure compliance and avoid penalties.

Essentially, it was established to ensure that shareholders don’t try to disguise dividends and pay the appropriate amount of tax.

What is a Div 7a Loan?

A Div 7A loan is a formal loan agreement between a private company’s trustees and a shareholder of the company. It should be set up when the company lends money, makes a payment or forgives a debt owed by a shareholder (or their associate) in a way that is treated as if it were an unfranked dividend.

Under Australian tax law, Division 7A is designed to stop company profits from being accessed tax-free by individuals. If such a loan is not properly structured and repaid according to the Australian Taxation Office’s (ATO) rules – usually requiring a formal loan agreement, set interest rates and regular minimum repayments – the amount can be taxed as income to the recipient. In simple terms, a Div 7A loan is the ATO’s way of ensuring money taken out of a company by its owners is either repaid on commercial terms or taxed fairly.

What Triggers a Division 7A Problem?

A Division 7A problem can be triggered in several ways, each having its own set of conditions and implications:

Loans to Shareholders or Their Associates

If a private company extends a loan to a shareholder or an associate, it may be deemed a Division 7A dividend under certain conditions. This applies when the loan is not repaid by the end of the company’s income year or when it fails to comply with specific repayment terms set by the ATO. It’s essential for business owners to be aware of these conditions to avoid their loans being classified as dividends.

Moreover, the ATO specifies that loan agreements must be in writing and the terms must be strictly followed to avoid reclassification. Failure to comply can result in the loan amount being treated as an unfranked dividend, which can have significant tax implications for both the company and the borrower. Therefore, establishing clear, compliant loan agreements from the outset is crucial.

Payments Made by the Company

When a company makes a payment to a shareholder or their associate, and it is neither a dividend nor related to services rendered, it may trigger Division 7A. This includes payments for personal expenses, which are often overlooked by business owners. Such payments, if not properly accounted for, can lead to unexpected tax liabilities. In addition, this may result in a Fringe Benefits Tax bill if the shareholder is also a director of the company or an employee of the company.

To prevent this, it’s important for companies to maintain detailed records of all transactions and ensure that any payments made are either properly documented as dividends or relate directly to business operations. Proper accounting practices and regular audits can help in identifying such payments and addressing them before they become an issue.

Debt Forgiveness

Debt forgiveness is another trigger for Division 7A. If a company forgives a debt owed by a shareholder or an associate, the forgiven amount is considered a benefit akin to a dividend. As such, it is subject to taxation under Division 7A. Business owners must be cautious when forgiving debts and should consider the tax implications before proceeding.

Forgiving a debt may seem like a straightforward decision to alleviate financial or tax strain for a shareholder, but without proper documentation and consideration of Division 7A, it can lead to significant tax liabilities. Consulting with a tax professional before forgiving any debt can help business owners make informed decisions and avoid adverse tax consequences.

Managing A Division 7A Loan Agreement

Effectively managing Division 7A loans is vital to ensure compliance and avoid unexpected tax liabilities. Here are some key strategies to consider:

Establishing a Compliant Loan Agreement

To prevent the loan from being treated as a dividend, establishing a formal div 7A loan agreement is essential. This agreement should detail the loan amount, interest rate, and the loan term. The interest rate must meet or exceed the ATO’s benchmark interest rate, and the loan term should not exceed seven years for unsecured loans and 25 years for secured loans.

Having a compliant loan agreement serves as a safeguard against reclassification and potential tax penalties. Regularly reviewing and updating these agreements to align with any changes in ATO regulations is also crucial. This proactive approach ensures that the terms remain favorable and compliant throughout the loan’s duration.

Calculating Minimum Repayments

Each year, a minimum repayment must be made on a Division 7A loan to prevent it from being treated as a dividend. This repayment includes both principal and interest. Utilising a Division 7A loan calculator can help determine the exact repayment amount required to stay compliant with ATO regulations.

graphic highlighting the required relationship between a company and shareholder within a div 7a loan

Timely repayment not only ensures compliance but also aids in maintaining the financial health of the business. It demonstrates a commitment to meeting financial obligations and can positively impact the company’s creditworthiness and relationships with stakeholders.

Making Repayments Before the Lodgement Date

Ensuring that the minimum repayment is made before the company’s tax return lodgement date is crucial for maintaining compliance and avoiding the loan being classified as a dividend. This proactive approach helps in mitigating potential tax liabilities and demonstrates responsible financial management.

Regular monitoring of repayment schedules and setting reminders can aid in meeting these deadlines consistently. Moreover, integrating repayment schedules into the company’s overall financial planning can streamline processes and prevent last-minute scrambles to meet compliance requirements.

Regularly Reviewing Loan Agreements

Regularly reviewing the terms of the loan agreement is essential to ensure ongoing compliance with the latest ATO regulations. This includes checking the interest rate and repayment terms to ensure they remain in line with current standards.

Frequent reviews allow business owners to address any discrepancies or changes in regulations promptly. This not only prevents potential compliance issues but also facilitates informed decision-making regarding future financial strategies and adjustments.

Does Division 7A Apply To Trusts?

A common question among business owners is whether Division 7A applies to trusts. While Division 7A primarily targets private companies, it can also apply to trusts if the trust is a shareholder or associate of a shareholder in a private company. In such cases, trust distributions made to a company (e.g. distributions made to a “bucket company” to cap the tax applied to the company tax rate) can be subject to Division 7A if they are unpaid and the trust is considered an associate of the company.

Understanding the implications of Division 7A on trusts is crucial for businesses that operate through trust structures. Proper accounting and documentation practices are necessary to ensure that any distributions made through trusts are compliant with Division 7A. Consulting with a tax professional can provide valuable insights and help in navigating the complexities involved.

Practical Division 7A Examples

To better understand Division 7A, let’s explore a couple of practical examples:

Example 1: Loan to Shareholder

Suppose a private company loans $50,000 to one of its shareholders. If the shareholder does not repay the loan by the end of the financial year and there is no formal loan agreement, the ATO could treat this loan as a dividend, subject to tax. This highlights the importance of having a compliant loan agreement in place to avoid such tax implications.

This example underscores the need for clear communication and documentation in financial transactions within a company. By establishing formal loan agreements and ensuring timely repayments, businesses can prevent reclassification of loans and avoid incurring unnecessary tax liabilities.

Example 2: Payment for Personal Expenses

A company pays $10,000 for a shareholder’s personal vacation expenses. If this payment is not declared as a dividend or included in the shareholder’s assessable income, it may be treated as a Division 7A dividend. Proper accounting and documentation are essential to prevent such reclassification and the resulting tax implications.

This scenario highlights the importance of maintaining transparency and accuracy in financial records. By ensuring that all transactions are properly documented and accounted for, businesses can avoid potential issues with the ATO and maintain their financial integrity.

Division 7A FAQs

Division 7A is a tax provision that applies when a private company provides a loan, payment or debt forgiveness to a shareholder or their associate. If the transaction is not structured correctly, the Australian Taxation Office may treat it as an unfranked dividend and tax it as income.

The Division 7A benchmark interest rate is set each year by the Australian Taxation Office. For the 2025 income year the rate was 8.77%. For the 2026 income year the rate is 8.37%. This rate must be applied to complying Div 7A loans to ensure they are not treated as taxable dividends.

Yes, interest paid on a Division 7A loan can generally be deductible if the borrowed funds are used for income producing purposes such as investing or running a business. If the loan is used for private purposes the interest is not deductible.

To avoid paying Division 7A interest you need to ensure that any loan from a private company is repaid in full before the company’s tax return lodgement date. Alternatively you can put in place a compliant loan agreement that meets the ATO’s requirements for minimum yearly repayments and benchmark interest rates.

Yes, Division 7A can apply to trusts in certain situations. If a trust makes a distribution to a private company and the funds are instead used by the trust or its beneficiaries without being paid to the company, this can trigger Division 7A rules.

If a private company forgives a Division 7A loan, the amount forgiven is generally treated as an unfranked dividend. This means it will be included in the borrower’s assessable income for tax purposes.

Yes – you can access the ATO Div 7A calculator to help you understand your obligations

Conclusion

Understanding Division 7A is essential for small business owners to ensure compliance with Australian tax laws and avoid unexpected tax liabilities. By establishing compliant loan agreements, making timely repayments and regularly reviewing terms, you can effectively manage Division 7A loans.

The tax team at MGI South Qld can help you to navigate the complexities of Division 7A and make informed decisions for your business. Understanding these regulations not only protects your business from potential tax issues but also contributes to a strong foundation for long-term success.

Contact our team today to ensure your company avoids unnecessary tax penalties. 

We have put together a summary from our recent Webinar covering Inter-Generational Wealth Transfer and Estate Planning with the help of our presenters Zee Zhang – Director at MGI, Jaxon King – Managing Director at Scion Private Wealth and Michael Klatt – Partner at Mullins Lawyers.

How to Plan Your Estate the Smart Way

Presented by Zee Zhang
Estate planning isn’t just paperwork – it’s a powerful way to ensure that your hard-earned wealth smoothly transfers to those you love, without unnecessary stress or tax bills. In our recent webinar, “Family Wealth Transfer & Navigating Estate Planning Issues,” we unpacked a simple yet powerful way to approach your wealth: the Four Buckets Framework.

Why Early Planning Matters

Families often underestimate how critical early planning is until it’s too late. Here are three big reasons why acting sooner rather than later is essential:

The Four Buckets of Family Wealth

We introduced attendees to our easy-to-follow “Four Buckets” model:

Essential Family Governance Tools

Beyond buckets, successful family wealth transfers also rely on good governance. We recommend four foundational tools:

Building Your “A-Team”

Effective estate planning involves collaboration between:

Your Action Checklist

Start with these practical steps today:

Estate planning is not just about the money – it’s about preserving family harmony and ensuring your legacy goes exactly where you intend. Act early, and you won’t just be planning your estate; you’ll be safeguarding your family’s future.

For any questions about this topic, please contact Zee Zhang on (07) 3002 4800 or email zzhang@mgisq.com.au.

Book your complimentary 1-hour structuring review today with Zee and gain clarity on your family’s financial future.

Protecting Family Wealth

Presented by Jaxon King

As the landscape of superannuation and tax legislation evolves, so too must our strategies for protecting and transferring wealth. With the introduction of Division 296 into Australian tax law, many high-net-worth individuals are now facing a new challenge: how to manage the growing tax burden on their superannuation balances – particularly when planning for future generations.

This article will explore the implications of Division 296, outline key strategies to mitigate its impact – such as investment bonds and superannuation recontribution strategies – and provide guidance on how to turn complexity into opportunity for your family legacy.

Understanding Division 296: What It Means for High Super Balances

Division 296, part of the Treasury Laws Amendment (Better Targeted Superannuation Concessions) Act 2023, introduces an additional 15% tax on earnings attributable to superannuation balances exceeding $3 million, effective from 1 July 2025.

This tax is applied to “earnings” on the portion of your total super balance that exceeds $3 million, regardless of whether the earnings are realised or unrealised.

Key Points:

Who Will It Affect?

High-income professionals, business owners, and self-funded retirees who have built significant retirement savings are the most exposed. While the legislation targets a relatively small cohort now, indexation is not applied to the $3 million cap, meaning more Australians will fall under its scope in time.

The Broader Issue: Taxable Components and Inheritance

Even without Division 296, many Australians with large superannuation balances face another tax trap: the taxable component of their super may be subject to up to 17% tax when passed to non-dependent beneficiaries (e.g. adult children)

Why It Matters:

So, how do we manage these risks while preserving your legacy?

Strategy 1: Recontribution Strategy – Reduce the Taxable Component

A recontribution strategy involves withdrawing money from your superannuation and recontributing it back as a non-concessional contribution. This effectively converts the taxable component into tax-free, reducing the potential death benefits tax payable by non-dependent beneficiaries.

Benefits:

How It Works:

Contribution Limits to Watch:
Non-concessional cap: $120,000 per year, or $360,000 over 3 years under the bring-forward rule.
Must be under age 75 and meet the total super balance test (less than $1.9 million to make non-concessional contributions).

Strategy 2: Investment Bonds – A Tax-Effective Vehicle Outside Super

Investment bonds are a powerful, often overlooked, tool for building and transferring wealth outside the superannuation system – making them an excellent complement to Division 296 planning.

Key Features:

Ideal Uses:

Strategic Benefits:

Going Beyond the Numbers: Family Governance and Communication

While tax and investment strategies are crucial, the real risk to generational wealth is not legislative—it’s relational.
More than 70% of wealth transfers fail by the second generation, not because of poor tax planning, but due to lack of communication and family alignment.

Start with These Steps:

  1. Have open conversations with adult children about your estate intentions.
  2. Build a family governance framework—just like you would for a business.
  3. Schedule regular family meetings to discuss values, not just money.
  4. Involve professionals in a collaborative team approach—your lawyer, accountant, and adviser working in concert.

The Cost of Doing Nothing

You’ve spent decades building your wealth. The final, and perhaps most important step, is ensuring it serves your family – not just financially, but relationally – for generations to come.

Next Steps: Let’s Tailor a Plan for You

Every family is unique, and so is every wealth transfer plan.

For any questions about this topic, please contact Jaxon King on 07 3778 6800 or email JKing@scionprivatewealth.com.au

You can also book a Complimentary Strategy Session with Jaxon
He is currently offering a limited number of 30-minute one-on-one calls to:

Estate Planning

Presented by Michael Klatt

Approximately 50% of the Australian population does not have a valid Will. This seems to be a result of complacency, largely, but also, in some circumstances, testators find it difficult to decide on how to distribute their estate following their death. This is particularly the case where the testator is a member of a blended family.

Estate planning is more than just making a Will. It is also important to have an Enduring Power of Attorney by which a person can authorise an attorney to act in relation to their financial affairs and personal (including health) matters. This document terminates on the person’s death.

It is important to identify how assets are owned. Sometimes, assets are owned by an individual; other times, they are owned jointly with one or more other persons. Assets can also be owned by a company or trustee of a trust, including family trusts or units trusts. Assets can also be held by a superannuation fund, either a self-managed superannuation fund controlled by the members or a retail or industry fund controlled by the trustees of those retail or industry funds. It is not uncommon for clients to not fully appreciate where the assets sit.

Once assets and liabilities are identified, it is necessary to consider the personal circumstances of the testator; are they married or in a relationship, do they have children, are they in a blended family situation, are there any issues of estrangement with family members that need to be considered, do family members who are identified as potential beneficiaries get on?

It is necessary to consider who to appoint as an executor or executors of the Will. These should be responsible people, not merely people who would expect to be appointed as executors. Appointing the right people to act as executors is crucial in avoiding family disputes.

If multiple executors are being appointed, then they need to be able to work together. Sometimes, it is appropriate to appoint an independent executor, either a friend or a professional advisor, particularly where the testator may be in a blended family situation. In the event that executors are not able to work together, the likely scenario will be a beneficiary or executor making an application to the court for the removal of the executors and the appointment of an independent administrator, typically an independent lawyer.

Typically, if children are not treated equally in the division of a testator’s estate, a family dispute will arise. Sometimes, however, a testator may feel that one child should receive a larger portion of the estate and other children, particularly where the testator may have a family business and one child has contributed significantly in the improvement of the family business to that child’s detriment, particularly also where they have not been paid a commercial rate of salary for the effort provided. Careful planning is necessary when developing an estate plan in these circumstances. If it is possible to distribute non-family business assets to children not involved in the business, then that is typically the preferred course of action.

Communication with family members in relation to the testator’s estate plan is usually advisable. This may prevent family disputes after a testator’s death, but this is not always the case.

The advice to testators who are members of a blended family is generally that, if it is possible to leave an inheritance to the testator’s children of a previous relationship in circumstances where their new spouse is still living, then this assists with potentially avoiding a family dispute after the testator’s death. Again, this is not always the case. Sometimes, there are insufficient assets to provide for adult children of a previous relationship and the new spouse. Testators may well consider entering into a mutual Will deed with their spouse by which they promise to leave their estate a certain way in the event that their spouse pre-deceases them.

Generally, children co-owning assets that have been left to them by their parents does not work. Careful consideration needs to be had before a decision to leave assets to children to be co-owned is made. If, however, it is decided that children will co-own assets, particularly in the situation of a family business, then proper governance needs to be put in place. Family Charters, Family Constitutions, Shareholders Agreements, and Unitholders Agreements are all tools that can be used to assist with avoiding a family dispute in a co-ownership arrangement.

Some testators have control of a family trust. A family trust is typically a discretionary trust where no one beneficiary has an absolute entitlement to the assets held by the trustee of the trust. Careful consideration needs to be given to the succession of control of the trust and, to the extent that the testator is able, they should leave wishes as to how the trust assets should be administered.

Clients with any significant wealth are typically concerned about leaving an inheritance to their children and their children subsequently separating from their spouse, exposing the inherited assets to a family court property settlement. Accordingly, many testators decide to incorporate testamentary discretionary trusts in their Will. Instead of leaving the inheritance directly to the child, the inheritance is left to the child as trustee for a testamentary discretionary trust. The beneficiaries of that trust include the child as the primary beneficiary and then other discretionary beneficiaries, including the child’s children and other relatives. Sometimes, spouses of the child and other beneficiaries are included as beneficiaries but are limited to being income beneficiaries and not capital beneficiaries. Proper consideration of the terms of those testamentary discretionary trusts is important. There is no standard testamentary discretionary trust Will that will suit all testators.

It is important that clients have Enduring Powers of Attorney in place. These documents are not just for elderly clients. One never knows when they may have an accident and therefore not be able to manage their own finances and personal health matters. Again, proper consideration as to who to appoint as attorneys is imperative. These are not documents that can simply be printed off and completed by clients without professional guidance.
It is vital that clients surround themselves with competent advisers, including a lawyer, an accountant, and a financial planner and that all of these advisors are engaged to assist with the estate planning exercise.

For any questions about Wills and Estates, please contact Michael Klatt on (07) 3224 0370 or email mklatt@mullinslawyers.com.au

We have put together a summary from our recent Webinar covering PCG2021/4 and Wealth Structuring for Paediatric Dentists with the help of our presenters Alice Wu – Associate Director of MGI and Jaxon King – Managing Director of Scion Private Wealth.

PCG 2021/4: Staying in the Green Zone for the 2025–2026 Financial Year

What is PCG 2021/4?

PCG 2021/4 is a Practical Compliance Guideline issued by the Australian Taxation Office (ATO). It outlines how the ATO assesses the allocation of profits within professional firms, especially where income is distributed through structures like trusts, partnerships, or companies. It applies to individual professional practitioners (IPPs)—such as directors, partners, or shareholders—who derive income from professional services firms.

Who Does It Apply To?

This guideline is relevant for:

Why Is It Important for 2025–2026?

The ATO has confirmed that PCG 2021/4 remains in effect for the 2025–2026 financial year. Staying within the green zone (low risk) is essential because it:

Risk Assessment Framework

Before scoring your arrangement, you must pass two gateways:

Then, assess your arrangement using up to three risk factors:

Example: Vinnie the Paediatric Dentist

Vinnie runs his dental practice through a company owned by the Wen Family Trust. He’s entitled to $400,000 in total income.

This setup scores 8, placing Vinnie in the amber zone (medium risk). Because his market salary is hard to benchmark, only two risk factors are assessed.
However, if Vinnie adjusts the distribution so that 60% of the income stays in his name, his score drops to 7, moving him into the green zone—a much safer position.

Tips to Stay in the Green Zone

For any questions about this topic, please contact Alice Wu on (07) 3002 4800 or email awu@mgisq.com.au

 

Turning Business Profit Into Personal Wealth: A Guide for Dentists

How specialist dental professionals can structure their wealth and invest strategically to turn today’s business income into tomorrow’s financial freedom.

Running a successful dental practice – particularly in specialist areas like paediatric dentistry – comes with more than just high income. You face unique challenges: complex income structures, specialist equipment costs, staff obligations and potential litigation risks.

While compliance with PCG 2021/4 is essential for meeting tax obligations, it’s what you do with that income afterward that defines your long-term financial success. In this article, we explore the strategies discussed in our recent AAPD webinar, turning expert insights into practical advice to help you turn tax-smart profits into lasting personal wealth.

The Three Pillars of Enduring Wealth

At Scion Private Wealth, we use a proven framework to guide our high-income clients:

1. Structure – Protect, Distribute & Grow

2. Strategy – Make Money Work Harder Than You Do

3. Succession – Plan Ahead for Life Beyond the Practice

Choosing the Right Wealth Structure

Dentists need asset protection and tax efficiency. Here’s how different structures compare:

Screenshot 2025 08 06 At 3.05.18 pm

Best Practice: Use a combination – e.g., a company to operate the practice, a service trust for income splitting and a family trust to distribute profits tax-effectively.

PCG 2021/4: Don’t Be Discouraged by Compliance

The ATO’s guidelines around income allocation don’t eliminate trusts- they just raise the bar for consistency and evidence.

To stay in the green zone:

Case in Point: Dr Sarah, a paediatric dentist, restructured her trust for compliance while using excess profits to fund a family investment company for her children’s future.

Protecting Your Assets: A Must for Dentists

Dentistry is a high-liability profession. Lawsuits, staff disputes, or even property leases can place personal wealth at risk.

Asset Protection Strategies:

Creating Passive Income Streams

When structured well, surplus profits can fund assets that pay you – even while you sleep.

Options to Consider:

Dr James invested $100K annually into global healthcare and infrastructure funds. Five years later, his portfolio now generates $32,000 in passive income annually.

Superannuation: Your Underrated Wealth Vehicle

Super can be a secret weapon for dentists- especially as high-income earners facing top marginal tax rates.

Key Tips:

Building Intergenerational Wealth

Your personal wealth journey can also support the next generation.

Tax-Efficient Options for building intergenerational wealth:

Succession Planning: Don’t Leave It Too Late

Many dentists delay practice succession planning until it’s too late—or worse, sell without a strategy.

Exit Pathways:

Dr Helen gradually transitioned her practice to a junior dentist, retained the clinic’s building, and now earns $60K per year in rental income while mentoring part-time.

Let Business Profit Fund Life Goals

Your practice should support your life – not the other way around.

Use surplus income to:

“You’ve built a great practice. Now it’s time to build a great life.”

Final Thoughts: Time to Act

Too many high-income professionals leave wealth to chance. A strategic, tailored approach can mean the difference between a busy working life and a truly wealthy one.

Key Takeaways:

Ready to Align Your Wealth With Your Vision?

Let’s explore how your business success can fund your long-term lifestyle goals.

For any questions about this topic, please contact Jaxon King on (07) 3778 6800 or email jking@scionprivatewealth.com.au.

Scion Private Wealth is a trusted advisor of MGI.

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