CASE STUDY
From Dormant to Dynamic:
Unlocking Value from a Company / Trust Structure
Small legal practice • Two partners • 5 years established • Operating company held by a Family Trust
The Challenge
A profitable two-partner legal practice had established a company-trust structure on the advice of their previous accountant, but the structure had never been properly utilised. When they received yet another unexpected tax bill, they realised they had no clear strategy for extracting profits from the business beyond their modest director wages.
Despite the business generating healthy profits, no dividends or distributions had ever been paid. The structure was technically in place, but the partners weren't receiving any real benefit from it. Their previous accountant had provided compliance services, tax returns were filed, but offered no guidance on profit extraction, tax planning, or strategic use of the structure.
The result was ongoing frustration: surprise tax bills, no visibility over upcoming obligations, and a growing sense that they were working hard but not reaping the rewards of their success.
Key Issues Identified
- Structure established but never utilised, zero dividends or distributions paid to date
- Directors receiving only wages, leaving cash trapped in the company
- No tax budgeting or forward planning, regular surprise bills from the ATO
- No strategic guidance from previous accountant on profit extraction
- Directors unclear on how to actually benefit from the structure they establish
Our Approach
We implemented a structured tax planning framework that utilised the existing structure and transformed it from a dormant compliance requirement into a strategic wealth-building tool:
- Quarterly distribution and dividend reviews based on company performance and partner tax positions
- Structured profit extraction strategy optimising the mix of wages, dividends, and trust distributions
- Integrated superannuation planning maximising concessional contributions within available caps
- Forward tax forecasting with cash set aside weekly to eliminate surprise bills
Rather than simply filing returns, we became active advisers, providing ongoing strategic oversight with quarterly planning sessions and year-round access for guidance.
The Results
"We had this structure sitting there for years but had no idea how to actually use it. Our previous accountant just filed our returns and sent us bills. Now we have a clear plan, we know what's coming, and we're finally getting the benefit of the work we've put in. The difference is night and day."
— Principal, Legal Practice
Key Takeaway
A well-designed structure delivers no value unless it's actively managed. This practice had invested in the right setup, they just needed strategic and proactive guidance to utilise it. The result was not only significant tax savings, but genuine financial clarity and confidence in how to extract the rewards of their hard work.
Is your business structure working as hard as it should? Let's review it together.