Episode Description:

The 2026 federal budget has dropped a bombshell on the Australian small business landscape, leaving accountants and their clients in a state of significant uncertainty. In this special episode, we assemble a panel of experts to unpack the controversy, the confusion, and the practical challenges of advising clients when the legal framework is still a movable feast.

We explore why the current lack of draft law is leading to a rise in misleading social media advice and why a knee-jerk reaction to unwind trust structures could be a costly mistake.

Our guests share their perspectives from the coalface of regional business advisory, specialist tax law, and asset protection.

We get into the heart of why the government's approach to discretionary trusts and bucket companies might be missing the mark on how small businesses actually operate. This conversation is a must-listen for any accountant looking to navigate the shifting sands of the current budget cycle while protecting their practice and their clients through strategic partnerships.

What You Will Learn:

• Why the lack of a draft law is making it impossible for accountants to give definitive answers

• How to handle clients who are bringing you "workarounds" they found on social media

• What the shift in law design from Treasury to the ATO means for your compliance burden

• Why trusts are critical for asset protection beyond just tax avoidance benefits

• How to caveat your advice in black and white to protect your practice from liability

• Why the 2026 budget is being described as a payload of problems for small business

• What the future of bucket companies looks like under the proposed changes

• How to maintain client confidence when the framework is still being built

Key Takeaways:

• Embrace the uncertainty with honesty

• It is better to tell a client you are unsure than to give definitive advice on law that hasn't been written yet

• Protect your practice with written caveats

• Ensure all budget-related advice is clearly marked as being based only on currently available information

• Re-evaluate the purpose of every trust

• Move beyond tax planning and ensure structures are still fulfilling their primary role in asset protection

• Beware of the social media vacuum

• Proactively address misleading advice from TikTok and LinkedIn to prevent clients from making poor decisions

• Strengthen your legal partnerships

• The gap between tax and legal advice is widening, requiring a more collaborative approach to client strategy

Notable Quotes:

• "I can't really give them the answers at the minute, because it's really not clear as to exactly what the framework's going to be and how it's gonna look." David Patterson

• "Taxpayers and regular individuals expect that there's this level of certainty and simplicity in the law... we're going the wrong way." Gavin Quayle

• "Trusts being initially a great asset protection vehicle, and I think there's this misconception that trusts are just set up there for tax avoidance, which is just not the case." Ian Aldridge

• "These changes came out, and many of them, to me, were badly thought out. They didn't make sense." Talila Kroy

• "There's not enough detail from the new changes that we can rely on to really make some definitive decisions around what to do." Peter Sa

Guest Information:

• David Patterson - The Bucket List Accountant (bucketlistaccountant.com.au) and look for the podcast with the same name

• Peter Sa - FWP Advisory (fwpadvisory.com.au)

• Gavin Quayle - Hilltop Tax Advisory (hilltoptax.com.au)

Roundtable Events: https://thebackroomop.com/thepartnershipeffect

Here is the link to register for the webinar featuring Talila and Charles Clark: https://us06web.zoom.us/webinar/register/3817816565448/WN_LhsImYIlSKqJ0bplQ4ZL-Q#/registration

Roundtable Events

Information, including registration details, for Roundtable events for Accountants: https://thebackroomop.com/thepartnershipeffect 

Panelist Information:

Talila Kroy - Emple

• Website: emple.com.au 
• LinkedIn: linkedin.com/in/talila-kroy 
• Specialisation: Building partner ecosystems for fast-growing businesses

Wayne Findlay - The Back Room

• Website: thebackroomop.com 
• LinkedIn: linkedin.com/in/waynenz 
• Specialisation: Offshoring solutions for accounting firms

Ian Aldridge - Progressive Legal

• Website: progressivelegal.com.au 
• LinkedIn: linkedin.com/in/ianaldridge1 
• Specialisation: NewLaw firm for growing Australian businesses

Production:

Co-host - Anthony Perl - Podcasts Done For You

• Website: podcastsdoneforyou.com.au 
• LinkedIn: linkedin.com/in/adperl/

The budget bombshell.

2

Small business uncertainty,

trust upheaval, and why

3

accountants can't give answers.

4

Welcome to The Connected Accountant,

the podcast where we explore

5

how strategic partnerships can

transform your accounting practice.

6

I'm your co-host, Anthony Pearl,

and today we're tackling the fallout

7

from the 2026 federal budget, the

uncertainty, the confusion, and the

8

real risk facing small businesses

and the accountants who advise them.

9

Talila Kroy: These changes

came out, and many of them,

10

to me, were badly thought out.

11

They didn't make sense.

12

They didn't seem to solve a problem

that they were supposed to solve, and

13

they seemed to create more problem.

14

The government of the country can get

away with doing something like this.

15

I feel passionately that people shouldn't

be allowed to create budgets unless

16

they have a proper background in this

stuff, and they go through a proper

17

process of analyzing what the heck

all the flow-on effects should be.

18

Ian Aldridge: Hey, in order to protect

the assets of this business, best not to

19

have the trading company own those assets.

20

I don't know the bucket company, what

this is going to do with that advice.

21

David Patterson: We've kind of just been

given this information in the budget, and

22

no real backing behind it to kind of go,

"Well, this is how it's all gonna work."

23

I can't really give them the answers

at the minute, 'cause it's really not

24

clear as to exactly what the framework's

gonna be and how it's gonna look.

25

Gavin Quayle: Taxpayers and regular

individuals expect that there's this

26

level of certainty and simplicity in

the law, that, that it's getting better.

27

And I think as a result of this budget

announcement, we're going the wrong way.

28

Peter Sa: There's so much to go through

now, and it's really looking at every

29

individual client who has a trust or

a company or a combination of those

30

things, to see what still works for them.

31

Anthony Perl: Joining me today are

regular panelists Talya Lacroix

32

from Mpul and Ian Aldridge from

Progressive Legal, plus three guest

33

specialists for this budget special.

34

David Paterson is the

Bucket List Accountant.

35

He spent 28 years advising

small businesses at the

36

coalface in regional Victoria.

37

He's also the host of The

Bucket List Accountant podcast.

38

Peter Saul leads FWP Advisory,

specializing in family wealth

39

protection and asset structuring.

40

And Gavin Quale founded Hilltop Tax

Advisory after 11 years inside the

41

ATO at a senior level, giving him a

perspective few tax advisors can offer.

42

Let's get into what will make

you The Connected Accountant.

43

Well, hello everyone, and welcome

to what is going to be, ugh, I

44

was gonna say an explosive show.

45

I don't know if it'll be explosive,

but it's certainly covering a lot

46

of the controversy that's happened

since the budget has been released.

47

It has had a massive impact.

48

It's gonna have a big impact

moving forward as well.

49

So we've assembled a wonderful team

here to try and unpack it all from

50

different perspectives because I think

that's the point here we want to make.

51

There are lots of different perspectives

and lots of things to consider or

52

perhaps that haven't been considered.

53

So I'm gonna kick things off

by welcoming someone who's in a

54

podcast with me on a separate level

on The Bucket List Accountant.

55

David, welcome to The

Connected Accountant.

56

Thanks.

57

And I guess you're at the coalface in

many respects with small businesses,

58

so what's been the reaction?

59

David Patterson: Thanks, Anthony.

60

It's great to be here.

61

I think the, the biggest reaction

for me from small business

62

clients is just uncertainty.

63

You know, they don't know

what they should be doing.

64

They don't know whether they

should be changing how they run

65

their business, and they're coming

to me to try and find answers.

66

And, you know, I can't really give

them the answers at the minute

67

'cause it's really not clear as

to exactly what the framework's

68

gonna be and how it's gonna look.

69

We've kind of just been given this

information in the budget and no real

70

backing behind it to kind of go, "Well,

this is how it's all gonna work."

71

So it's really, really difficult

for the business owners to move

72

forward with any level of confidence.

73

Anthony Perl: Yeah, I can imagine

that is a challenge for you as well

74

because you're in a position where

you've got people coming to you

75

and wanting answers, and you've got

to find the answers out yourself.

76

David Patterson: Well,

that, that's exactly right.

77

I mean, they're coming to me and

they're saying, "Well, what do I do?"

78

And it's really-- I'm finding it

really frustrating in the fact that

79

my only answer at this stage can be,

"I'm not sure what we need to do.

80

We just need to sort of see how

this plays out for a little while."

81

And I've always, I guess, prided myself

on being able to help clients and give

82

them the answers to their questions.

83

Whereas right now it, it just feels

kind of incomplete that they ask me.

84

They're coming to me

saying, "What can we do?"

85

And the only answer m- I can

give is, "I'm not really sure

86

what we can do at the moment."

87

I'm just finding that really frustrating.

88

Anthony Perl: Yeah, and I can imagine,

Gavin, that's fairly similar for you.

89

You're hearing that kind of feedback

as well in terms of understanding

90

how you're supposed to respond?

91

Gavin Quayle: Yeah, that's exactly right,

Anthony, and thanks for having me on.

92

It's an absolute pleasure to,

to, to be here with, uh, you,

93

uh, chaps and, and chapettes.

94

But, um, no, I'm having the exact same,

same conversation with, with my clients.

95

And one of the things that, that they're

also sort of asking me about is that

96

they're, they would see someone on

TikTok or on YouTube or on LinkedIn

97

say, "Hey, here's, here's how it works

and here's how to sort of get around

98

it," and would say, "Is this right?"

99

And sort of invariably it's

either wrong, it's misleading, or

100

it's just sort of jumping ahead.

101

I saw one yesterday about

here's how to get around the

102

discretionary trust measures, and

I'm there going, "These aren't…

103

Th-there's, there's not even draft law out

yet, so how can you get around anything

104

where all you've got is an announcement?"

105

And so I think that level of uncertainty

where just regular people, regular

106

moms and dads and taxpayers just-

Don't know the state of affairs,

107

and their thinking is, "Go to my

accountant, tell me what's up."

108

And so I think going forward, what this

means is that taxpayers and regular

109

individuals expect that there's this level

of certainty and simplicity in the law,

110

that, that, that it's getting better.

111

And I think as a result of this budget

announcement, we're going the wrong way.

112

Anthony Perl: Yeah, and I think just

before I cut to you, Peter, I'm gonna

113

bring you in here from a legal point of

view of people jumping to conclusions

114

on whatever side of the fence, whether

they're accountants or whether they're

115

small business owners, is going to

be huge, and that's a real risk.

116

Ian Aldridge: Yeah.

117

And I think a lot of the temptation at

the moment is this knee-jerk reaction

118

and do we need to unwind all, all these

things, or do we need to now set up

119

with the prediction of what we think

is going to happen in a year's time?

120

Also getting a lot of nervous business

owners that are looking at sales,

121

and do we need to rush this through

before, before further announcements?

122

Will that, will that

affect the purchase price?

123

As the guys are saying, so much

uncertainty and, and as we know, markets

124

and people do not like uncertainty,

and that adds, you know, just more

125

poor decision-making, I think is,

is what's going on right now with

126

either premature sort of actions until

we sort of see what's really going

127

to be written in black and white.

128

And we've seen a number of

changes now that have happened

129

just in the last two weeks.

130

It's a real movable feast right now,

and I'm sort of encouraging my clients,

131

"Let's just sit and wait and see what the

fallout is, wait and see what is actually

132

enacted," 'cause it just seems to be such

a, you know, shifting sands right now, and

133

they're walking back lots of these things.

134

And I've already had a few people that I

know I've spoken to that have decided to

135

unwind stuff, and now they're questioning

whether that was a right decision.

136

So think about how many hundreds

of thousands of small businesses

137

there are, and they're all probably

screaming at their accountant

138

saying, "What do I do here?

139

What do I do here?"

140

And, uh, I can only imagine how tough

that is for accountants right now,

141

especially end of financial year as well,

and payday super obligations coming up.

142

There's just…

143

No wonder a lot of small businesses

are questioning, you know, why they're

144

doing all this and putting this blood,

sweat, and tears into something right

145

now, which is really disappointing

from this government, especially this-

146

Anthony Perl: I absolutely agree with

what you're saying here, and I can see

147

Peter nodding his head as you were talking

as well because this is a difficult

148

situation of knowing when to, you know,

jump in, when to make a change, when

149

to proceed, when to sit back and wait.

150

Peter Sa: Yeah.

151

Thanks, Anthony, and

thanks for having me on.

152

Look, there is definitely a lot

of confusion out there in the

153

marketplace and- As accountants,

I think what we need to do is to

154

reassure the clients to remain calm.

155

There's not enough detail from the

new changes that we can rely on to

156

really make some, some definitive

decisions around what to do.

157

So I think the message should be

remain calm, and let's just wait and

158

see, uh, as details are rolled out

Th-they're so good at bringing these

159

things through Parliament, but practical

applications of how these things are

160

meant to apply, they always seem to

be very thin on that information.

161

So hopefully, as this thing rolls out,

we'll get more detail and we'll be able to

162

appropriately give the advice as required.

163

Anthony Perl: So as we're gonna get into

some of the detail of what's been given

164

in the budget, Talina, I just wanted to

bring you in here because I know you're

165

particularly passionate about the impact

that this has had on small business.

166

I mean, we're all here in the room,

we're all small business operators

167

as well as having our own positions.

168

So what have you seen so far?

169

Talila Kroy: The fact that firstly

these changes came out, and many of

170

them to me were badly thought out.

171

They didn't make sense.

172

They didn't seem to solve a problem

that they were supposed to solve, and

173

they seemed to create more problems.

174

It reminds me of when Australians

brought snakes into the country

175

to eat the cane toads or whatever.

176

Like, we're just creating more

and more problems for ourselves.

177

And then on top of that, then they

keep changing it, and every change

178

just causes more uncertainty.

179

I mean, it's a good thing.

180

I'm glad they're rolling some of

this stuff back, but it's creating

181

a lot of confusion, because every

time I hear something, I'll,

182

"Ah, okay, that's the situation.

183

Ah, okay, that's the situation."

184

So I feel passionately that people

shouldn't be allowed to create budgets

185

unless they have a proper background

in this stuff and they go through a

186

proper process of analyzing what the

heck all the flow on effects should be.

187

And I am frustrated that the

government of the country can get

188

away with doing something like this,

particularly when promises have been

189

broken in terms of the election.

190

So, yes, I am passionate, and I wanna

make some noise because I feel like

191

we have a window to do that right now.

192

Anthony Perl: I, I think we absolutely

do, and I think what's interesting

193

about what you're saying there,

Talina, as well, is that there is

194

no real advice from small business.

195

There's no partnership with small

business between the government.

196

There doesn't seem to be any

great advice there, so it's a very

197

one-sided situation that we've got.

198

Talila Kroy: Exactly.

199

Exactly.

200

It's like when men tell women to…

201

how to give birth.

202

You know, if you've given birth,

you know what it feels like.

203

So who do you want?

204

You want a midwife.

205

And I feel like the government is

creating laws for small business with

206

very little knowledge or understanding

of them, and that every year things get

207

worse for small business in Australia.

208

But this has been the biggest

payload of worse that I've ever seen.

209

Ian Aldridge: So, Talina, what you

gotta do when you give birth is, um…

210

Talila Kroy: Yeah, see,

and I'm all ears, Ari.

211

Anthony Perl: Ian, can

212

Ian Aldridge: I advise

213

Anthony Perl: you get a lawyer?

214

I

215

Ian Aldridge: love that ana- I

love that analogy about the cane

216

toads too because even the cane

toads were introduced, right?

217

To get rid of the pests that were

eating, that were in the cane

218

fields and, yeah, maybe that's

a good analogy for this, that-

219

Talila Kroy: They kept introducing…

220

Yeah, they introduced one thing

to get rid of the next, and then

221

they introduced another one to get

rid of that, and suddenly we've

222

got a whole series of pestilences.

223

And I think a lot of times simplicity

is the key to everything, and the

224

harder things get, there's always

hidden compliance for business owners.

225

There's hidden com-

effort for accountants.

226

Who pays for all that stuff?

227

Like I've already paid my

tens of thousands to set

228

up my trusts and all that.

229

I don't want the rules changing 'cause

now I have to rethink everything.

230

I don't have the time, the energy,

the money to waste on all that stuff.

231

And one of the things, I was talking to

Ian before, you were saying, look, trusts

232

are mostly s- there for legal reasons.

233

And Peter, that's what you do, you

help people to prepare for the future.

234

Legal and tax go together,

it's a partnership.

235

Ian Aldridge: Yeah.

236

You know, trusts being initially a

great asset protection vehicle, and I

237

think there's this misconception that

trusts are just set up there for tax

238

avoidance, which is just not the case.

239

And even the attack on bucket companies,

we regularly advise businesses that

240

basically their whole, their whole

value of their business is in their

241

intellectual property, for instance.

242

So those companies that right from the

get-go, you'd be advising them straight

243

away that, "Hey, in order to protect the

assets of this business, best not to have

244

the trading company own those assets."

245

I don't know, the bucket company, what

this is going to do with that advice

246

because effectively, you, you know,

when you're setting up more than simple

247

structure, where you're exposing the

company, the business to unnecessary

248

risk by having everything in the

trading entity, you wanna have another

249

company set up in order to make sure

all those assets are in one location

250

and separate to a trading entity

so that those assets are preserved.

251

And also, to a lesser extent, there's been

tax benefits for those trusts and other

252

companies to make sure that that's can be

a, a realized asset at the end of the day.

253

And so I, I see that this is going

to disrupt the creation of those

254

entities, which never primarily

for tax reasons, but more for asset

255

protection, succession planning.

256

Anthony Perl: I guess that's the point

here, is have the intention of what

257

some of these things were created for

now effectively been turned on its

258

head as a result of these changes?

259

Peter Sa: As I was saying before, that

it's, it's really important that you

260

go back and have a look at the trust

and see whether it still fits purpose.

261

Because it's not just about the taxed

aspect of it as well, but it is the

262

trust doing what it's supposed to do?

263

Is, is it protecting the

assets in the business?

264

Is it all about income splitting?

265

Is it about that?

266

What are, what does that mean now that

we've got some sort of like a franking

267

credit system, although there's, I,

I believe it's non-refundable So now

268

the idea of the tax planning aspect

of it, where we would pass some of the

269

distributions to people with lower tax,

on lower tax brackets, doesn't seem to

270

be as palatable as what it used to be.

271

Bucket companies now who don't get the

benefit of these franking credits because

272

they, they, they're not part of that.

273

So it just needs to now look at, firstly,

there's the tax aspect of it, but have

274

a look and see whether it's still doing

its job in protecting the assets, as

275

Ian was alluding to, you know, having

intellectual property and all these other

276

assets separated from the trading entity.

277

Still need to see whether those things

are still working for, for the clients.

278

So there's so much to go through now

and, and, and it's really looking at

279

every individual client who has a trust

or a company or a combination of those

280

things to see what still works for them.

281

Anthony Perl: Now, I just wanna take

a quick break from the discussion

282

that we're having at the moment.

283

Talila, you've got an

important event coming up.

284

Talila Kroy: So I have, and as we

just said, Anthony, there's never

285

been a more important time for

accountants to focus on partnerships.

286

So those accountants that are creating

content and assets and advice with

287

other experts to increase their

credibility, also to attract new

288

clients or even to awaken their own

internal client base to the more

289

proactive solutions that they have,

should absolutely jump on the webinar

290

on the seventh of July between Charles

from BOMA, Platform for Accountants,

291

and Empl, ourselves, talking about

partnership marketing for accountants.

292

And the link is in the show notes.

293

It is on in New Zealand and

Australia, twelve o'clock and two

294

o'clock, and not to be missed.

295

They'll walk away with exactly how to

do this, practical tools for the same.

296

Anthony Perl: And of course, if you

happen to be listening to this and

297

it's past that date, don't worry,

still follow the link in the show notes

298

because you'll be able to get a copy

of the replay, or indeed you'll be able

299

to register for future events as well.

300

All right.

301

Well, we better get back into this very

lively discussion about the budget.

302

And if I can bring you in, David,

because it's not just about the trust.

303

There's a lot of things in this budget,

capital gains, negative gearing, all

304

of these things are coming into play.

305

So, you know, what are the things that

are really impacting some of your clients,

306

and how do you actually advise them at

this point with some of these things?

307

I mean, do you get much of a chance to

get into the detail, or are you having

308

to look to peers for some advice as well?

309

David Patterson: I've definitely been

having a lot more discussions with, with

310

other accountants that I know and just

trying to talk to them about these things

311

as well and saying-- And, and just using

a client coming to me with a question

312

and taking that to someone else and just

making sure that I haven't missed anything

313

that's been announced or that there hasn't

been an adjustment made afterwards like

314

they seem to be doing at the moment.

315

Just to try and get a little bit of

confidence that the information that

316

I'm giving to clients is, is actually

accurate or as accurate as it can be.

317

And I think Talila made

a point before, you know.

318

People are trying to set things

in place now and trying to

319

get things now, and that…

320

and, and for some of these

things, there's time constraints.

321

Um, as an example, I've got a client

right now that's needing to set up an

322

entity to invest into a business, and

they've come to me and saying, "Well,

323

what, what's the best structure for this?"

324

And it's kinda like, well- I'm not

a hundred percent sure what the best

325

structure is right now because I

don't know what the detail is behind

326

all of this, 'cause like, I'm not

sure who mentioned it before, like it

327

hasn't even gone to Parliament yet to

all the detail and the nitty-gritty.

328

So how I can sort of advise clients

off the back of a treasurer with no

329

experience announcing it, uh, on,

on budget night, it's kind of…

330

I don't know.

331

And so, so I'm faced with the prospect

of, of setting up an entity that I think

332

will most likely be the right entity.

333

And then I have to say to the

clients, "You know, this is the

334

entity I think we should set up.

335

I'm not a hundred percent sure

that this is what it's gonna be."

336

But I guess one of the good things,

and I say that very loosely, is at

337

least with the trust as an example,

there's twelve months that we've got

338

to, to, to work through this stuff.

339

But it, it doesn't help in the

now when people have to have

340

something done because of…

341

I mean, life goes on, doesn't it?

342

Then people aren't gonna pause on

business decisions or investment

343

decisions or anything like that

until they find out what these…

344

Because they'll miss out.

345

You know, some of these things are so

time-critical that they can't afford

346

to wait until they get the full detail.

347

So yeah, I mean, it's just the level

of frustration is, from, from me

348

and clients is, I, I don't think

I've ever seen it like this before.

349

Anthony Perl: And I'd love to bring

you in, Gavin, because you've sat

350

on both sides of the fence, right?

351

So you've spent a fair bit

of time working in the ATO.

352

What's it like to be-- I mean, from,

even from that perspective, I imagine

353

the changes impact them as well, but

then that must be, you know, on the

354

other side of the fence as you are now,

working out how do you actually deal

355

with that because they're going to be,

and they've probably got more manpower

356

than anyone else, to be looking at how

this is going to be rolled out, and

357

y-you've got to catch up with one another.

358

Gavin Quayle: Absolutely right.

359

And one of my observations around, let's

call it the sort of Treasury ATO dynamic

360

over the past, say, sort of ten, twenty

years, is that Treasury has sort of

361

pushed more of the law design elements

to the ATO and, and so what I mean by

362

that is historically, tax law, when

it would, would, would be introduced

363

into Parliament and, and there'd be the

guidance that accompanies it, whether,

364

whether it be the explanatory memorandum

or, or whether it be the Ralph review

365

or sort of other policy documents, that

helps guide the interpretation and the

366

bounds of how that law should work.

367

Now, in the past twenty years,

there's been this, this shift

368

towards there being a real lack of

guidance around how, how the law is

369

meant to work and meant to operate.

370

And so what that has meant is that the

ATO has effectively been charged with

371

the responsibility of determining the

bounds of how it's going to apply.

372

And so it was, I think, ten years ago

where the ATO started introducing these

373

practical compliance guidelines, and they

called it swimming between the flags.

374

Now, the ATO's got a whole fleet

of rulings and, and public rulings

375

and products that they issue to

try and give guidance to the public

376

around how it interprets the law.

377

But this was new because this said,

"We're not gonna do an annual compliance

378

program of here are the, the taxpayers

or the arrangements that are gonna

379

be in scope of audit this year.

380

We're not gonna do that.

381

We're gonna have these compliance

guidelines, and we're gonna say, 'If

382

you're gonna be undertaking activity or

having a risk profile to do with this

383

particular matter within the flags,

then we're not gonna look at you aside

384

from potentially validating the facts.

385

But if you swim outside the

flags, we're gonna look at you.'"

386

And so what that means with these CGT

measures, and I imagine the ATO was, was

387

paying attention to that, that bottom line

in budget too that said how much money

388

we're getting to administer these rules.

389

And invariably, they're probably

thinking it's not gonna be enough

390

because there's gonna be a lot to do

on the ATO side with giving guidance to

391

taxpayers, with setting out here are,

here are the examples of how it works.

392

Here are the tools, here

are the calculators.

393

And then they're also gonna be pushing

that out to the software providers because

394

us accountants are gonna be relying on our

software providers as well to be assisting

395

us, particularly with the CGT rules, where

you've got one gain that's now broken

396

down into four components, and all those

four components are treated separately.

397

And the degree of uncertainty for each of

those, tho-those components is massive.

398

So I might just pause there, Anthony,

but, but I think the, the takeaway message

399

there is that I would suspect the ATO

is quietly nervous or, or perhaps loudly

400

nervous about what their, their role's

gonna be in administering these rules.

401

Anthony Perl: And I think there's an

important point there as well that

402

you've made at the end about some of

the technology and things, because it's

403

not just about the humans understanding,

it's all the technology that we utilize

404

on a day-to-day basis, particularly

accountants, and that's gotta keep

405

pace with all of these changes and make

adjustments as well, and that's not an

406

easy thing to administer in the first

place and, and be reliant on them.

407

I

408

Talila Kroy: mean, I remember when

I studied economics in high school

409

a million years ago, and they, they

said that one small ripple here

410

creates big ripples everywhere.

411

And often the hidden things are

much more powerful than the initial

412

event, and I think that's what…

413

Like, when you model something like this,

you have to cover the hidden things.

414

You have to think about everyone

it's gonna affect and how

415

it's going to affect them.

416

Even when they brought in the GST, like,

that's a whole compliance burden that

417

all of us now have as small business.

418

But it took us a while, and it takes

us time and money that all these things

419

erode being a business owner because

you're being a business owner and you're

420

doing all this other stuff, and the more

other stuff there is, the less you can

421

focus on doing what you wanna do and

achieving your goals and creating work.

422

And that's where all

the revenue comes from.

423

You know, small business

owners are, are big employers.

424

And if we're not healthy, then

everything starts to fall apart.

425

Ian Aldridge: We're also big

tax collectors too for the ATO.

426

We are Just one point when David was

speaking, thought, putting my legal cap

427

on for accountants right now, I think,

and I hadn't sort of thought about this

428

un- until now, but I think accountants

need to be really careful with the advice

429

that they're giving, and I would suggest

making really, really clear in black

430

and white that, "Hey, this is just on

the available information that we have

431

now," and really caveating the advice

heavily to their clients right now.

432

You know, if you are giving advice,

make sure it's got that heavy caveat

433

to it, and put it in black and white.

434

Don't rely on conversations or file

notes, and just say, "This, this

435

advice may change in the coming

months," and make sure that you put

436

the obligation on them to come back

to you for that further advice.

437

Because I can just imagine with, you

know, hundreds of clients, especially

438

if they're giving advice right now

which may change in the future, just

439

wanna make sure that they're covered in

terms of any potential liability, and

440

really confirming those instructions

right now and what the proposals are at

441

this very point, that that may change.

442

And I reckon, you know, very much keep

things broad, that there may be further

443

changes that, you know, that come

up, so that may impact on the advice.

444

We're really in a state of flux right now.

445

It's a moveable feast.

446

There's lots of changes being announced

on a weekly, sometimes daily basis,

447

so come back to us for further advice,

because this advice is only really

448

good for at this point in time.

449

Anthony Perl: I was gonna bring you

in there, Peter, because I think

450

that you're in a space that, that

probably that legal advice is something

451

that you have to seek all the time

before you're giving your advice.

452

So I think that's a good opportunity

to say the partnerships with a, a law

453

firm are important for accountants.

454

Peter Sa: Absolutely.

455

The type of work that we do in the

asset protection space definitely

456

borders on the legal side of things.

457

So it's really important, while we may be

talking about strategy and those sorts of

458

things, it still comes back to the legal

advice that, that has to be approved by

459

the legal team before anything can go out.

460

And because there is a fine line between

asset protection and setting up those

461

structures and, you know, the legality

of the documentation that supports

462

those asset protection structures.

463

And a lot of the work that goes into asset

protection does in fact involve a suite of

464

documents, and these are generally drafted

by the, the legal team that we use.

465

So as far as what we…

466

the work that we do, we definitely

make sure that we advise the clients

467

that we do not give legal advice.

468

Ian Aldridge: And Peter, do you see as

well, I mean, la- largely over the past

469

couple of hundred years, the sort of, the

legal and financial/tax advice for some

470

of these structures- Fairly much aligned.

471

Like, there's definitely some times

when there has been rubs where, you

472

know, perhaps the, the tax benefits

of setting some of these, you know,

473

structures up that the tax advice

does, you know, differ from the legal

474

advice, um, in certain circumstances.

475

Do you see a, a rift, perhaps even a chasm

sort of being, a crack becoming a chasm

476

now between the tax and legal advice?

477

When there aren't those tax benefits

to setting up these structures, I think

478

we're naturally gonna see a lot less of

these structures being set up and there

479

being a greater difference between the

legal and tax advice, where the legal

480

advice is saying, "No, no, no, they're

great, great for legal protection,

481

awesome for succession and all the rest."

482

And the tax advice might be, "Oh, well,

there's not a lot of tax benefits to

483

doing this, and the cost of setting

it up and the cost of maintaining it

484

and lodging returns and all the rest

don't justify, in your circumstance,

485

setting that up," where the legals--

the legal advice might be, "No, no, w-

486

this is absolutely a good idea," and

a greater difference between the legal

487

and the tax advice on these structures.

488

Peter Sa: Perhaps, Ian, perhaps.

489

And I think it goes back to what

is the purpose of setting up the

490

structure in the first place?

491

Is it for tax benefits?

492

Is it for, like, income splitting?

493

Is it for trying to reduce that

profit and distribute that?

494

Or is it purely to protect those assets

from litigation, you know, creditors,

495

uh, family claims, those sorts of

things where, you know, blended families

496

are involved, for example, and these

assets, if not properly protected.

497

That's a different kettle of fish.

498

I think it has two parts to it.

499

It's either using it for business purposes

or purely using it for, for protecting

500

those assets from those potential claims.

501

Ian Aldridge: One way or another, it

seems to me that accountants and lawyers

502

are gonna have to work much more closely

to provide the ultimate client with

503

the considered advice from all of those

aspects now more than ever, right?

504

Peter Sa: Oh, uh, absolutely.

505

I think gone are the simple days where

we would just set up a structure and

506

that was the end of it, but now I think

there's more meaningfulness, the legal

507

side of things around asset protection,

uh, are we using this for business?

508

Because if we get that wrong,

then we're in big trouble there.

509

But having working very closely

with the legal team, I think it's

510

inevitable that that's gonna go

hand in hand more so now with these

511

changes that have been introduced.

512

Anthony Perl: Well, that's all we

have time for in this conversation.

513

Next time we're going deeper into the

budget impact, negative gearing, capital

514

gains tax, payday, super, cashflow,

and why some business owners are

515

already asking about moving overseas.

516

It's part two of our budget special

and one you don't wanna miss.

517

A reminder also about some exclusive

roundtable events for accountants.

518

Visit the show notes for dates

and registration details.

519

All contact information for Talila, Ian,

David, Peter, and Gavin are there as well.

520

This is a Partner Alchemy podcast

for thought leaders, a joint

521

venture between Mpal and my team

at podcastdoneforyou.com.au.

522

I'm Anthony Pearl reminding you to

like, share, comment and subscribe

523

so you never miss an episode.

524

See you next time on

The Connected Accountant