Australian Family businesses: the foundation of our economy

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Our economy is heavily reliant on 2.1 million family-run businesses – accounting for more than 70 per cent of all businesses, and employing more than 50 per cent of the entire workforce.

While family owned businesses are working hard to continue to build and sustain growth, they do so in a particularly challenging marketplace that requires flexibility and innovation to adapt to the dynamic global trends changing the face of business.

Recent research indicates that almost 72 percent of family businesses plan to have some transfer of ownership in the next 5 years. However we know from working with many family businesses that they face unique challenges that include:

  • Managing succession from one generation to the next
  • Planning for, and managing business growth without compromising on the family’s vision and values
  • Attracting a non-family member to the position of CEO
  • Sharing rewards for family and non-family members
  • Separating ownership and management

Family businesses with documented retirement plans for the current CEO, clear planning around succession – and a unifying strategy for the future of the family business are key indicators of high performance.

At Archangel Wealth we provide family businesses with a broad range of services and support related to the financial planning and management of their organisation including SMSF, FBT and BAS to larger issues related to extended family groups, tax audits, consolidations, buybacks, restructuring, compliance and future planning.

Family Trust – Do you need one?

Family trust structures are often established to provide asset protection, or for tax purposes. The family trust structure is also ideal for those who own a business, or shares in a business, and for high-income earners who want to maximise their superannuation and have the capacity to increase their wealth once they have their mortgage under control.

Family trust structures suit individuals with:

  • a high marginal rate of tax with low-income family members to distribute to
  • assets that require protection against creditors
  • a business partner
  • multiple properties who wish to manage land tax more efficiently
  • farms who want to manage the succession of farming land to the next generation
  • investments, who have experienced a relationship breakdown and require protection of assets
  • an expectation that they will experience challenges in estate planning

To discuss your family trust needs or to find out how you can set up a family trust, speak to one of the Archangel Wealth team on (02) 9929 0822.

Sources: KPMG Family Business Survey – 2015, 2016 PWC Family Business Survey.

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