A discretionary trust is also known as a family trust. This is signiﬁcant because the beneficiaries are all, or predominantly, members of the same family. The name ‘discretionary trust’ is derived from the role performed by the trustee.
Buying a medical practice is often the best investment a doctor makes, providing the potential to generate higher income than what would otherwise be generated as a non-owner.
We stand by our ten principles of investing, and they have been our investment philosophy for more than a decade.
Staff are easy to hire but not so easy to fire. Therefore, much thought should go into your practice before another staff member is hired. Staff salaries are usually responsible for a large percentage of your expenses. Here’s a list of alternatives we recommend you consider before hiring.
Buying a practice should be the best investment for a GP. A mark of a good practice is a demonstrable ability to produce an above average return for its owners. Prospective buyers will be prepared to pay a premium over the value of the practice’s tangible assets to receive that above average rate of return.
Budgeting is the basis for all business success. It helps with both planning and control of the finances of the medical practice.
Successful investors know successful investing occurs over decades and across generations. With the height, stability and longevity of a doctor’s income comes the opportunity to plan for the next generation.
Tax planning should be an on-going process whereby commercial issues and developments are constantly monitored and the implications of income and other tax practices considered.
Tax planning is a legitimate activity and occurs constantly throughout a GP’s career. For example, we encourage GPs to pay large super contributions every year, at all stages of their career. The primary purpose is to ensure a financially secure retirement, but like most strategies there are secondary purposes too. In this case the protection of assets (super is protected in bankruptcy) and reducing tax are common secondary purposes.
A young GP will often ask what should I do? Buy a home or buy a practice? Our answer is “buy a practice first. And then use the extra cash flow to buy a better home.” Find out more by reading our complete eBook.
Superannuation really is super. Super lets you pay less tax and boost your retirement savings, all in one go, with the help of salary sacrifice.