The Risk of Part IVA & Personal Services Income

How to avoid being targeted by the ATO

The new ‘risk zone’ compliance guidelines in practice
Specific problem areas to watch out for
Practical approach to applying the general anti-avoidance rules

In August 2024, the ATO released a draft practical compliance guideline on the potential application of Part IVA to arrangements where personal services income is derived through a company or trust.

The guideline outlines the factors that will be used to determine the new risk ratings to be classified as “low risk” and “higher risk”.

It’s vital for practitioners to understand the ATO’s approach to help clients make fully informed decisions on how to deal with profits generated from a personal services business. The Risk of Part IVA & Personal Services Income webinar is essential training on the implications of the draft guideline and Part IVA generally.

Clients who earn personal services income through a company or trust structure and who can pass the PSI tests often assume that they can split income with related parties or retain profits in a company. The ATO has made it clear that this isn’t necessarily the case and that Part IVA needs to be carefully considered.

Dates & details

Tuesday, 24 September 2024

Time
12:00pm - 1:15pm AEST
11:30am SA & NT
10:00am WA

Investment

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What we cover

Overview

Part IVA makes many practitioners nervous, and rightfully so. The Risk of Part IVA & Personal Services Income webinar sheds light on how to approach Part IVA in situations involving personal services income derived through a company or trust.

The steps that need to be taken to achieve a “low-risk” status
Whether salary / wages can be paid to related parties performing admin work without triggering Part IVA
When it is acceptable to retain profits generated from personal services in a company
PSI companies and trusts that have tax losses from other activities
Whether using complying Division 7A loan agreements can prevent Part IVA from applying

Michael Carruthers

Tax Director, Knowledge Shop

Michael is an adviser, author, in demand presenter, mentor to Knowledge Shop’s technical team, and is well known for his capacity to translate highly technical information into tangible and useable advice for the profession. He has a knack for seeing through the complexity and helping advisers work through highly technical issues with certainty and accuracy.

Michael works with advisers every day to help them negotiate and implement the constant tide of change impacting the industry. He was a long-term member of the advisory panel for the Board of Taxation and was a member of the reference group for the Board’s review of small business concessions.

He was also an expert panel member for the Board’s review of tax impediments facing small business.