For the patent you should look at transferring it to a separate entity, trust maybe, and then licencing it. This will give the entity royalties and it will be quarantined from the other assets – subject to the clawback provisions of the bankruptcy act of course. The entity may even be a foreign one.

Hi Chalkey

Sounds like you have a real good business. You should really get some expert advice as there are a number of things you can do, legally, which can assist you in asset protection and tax reduction. eg you may be able to legally cease to be a resident in Australia for tax purposes while still being able to spend a lot of time here. You could chose another country with a much lower tax rate. Some countries treat foreign trusts as exempt from income tax – and other countries treat foreign royalty income, for example, as income which is exempt from tax. So you could possibly set yourself up in country X, live in country Y, be a tax resident in country Z and receive royalty income from your patent in country W (ran out of letters sorry, so going backwards) – and you may be able to reborrow the money from your company in country W and claim a deduction.

Anyway, I think you misunderstand something. If your company is earning $100,000 pa profit and you build or buy a house for $100,000 this does not mean your company taxable income reduces to nil. Although you may have spent $100,000 this is not classed as an expense, but a capital cost, and capital costs are not claimable up front in one hit, but over a number of years – 40 years for houses at 2.5% pa.

For the directors duties have a quick look on the ASIC site and look into the Corporations Act. There is probably little chance of getting sued if you and the wife are the only directors.
eg s180(1) duty to exercise power and duties with adegree of care and diligence of a reasonable person
s 181 the duty to act in good faith in the best interests of the company
improper use of information
improper use of position
conflct of duties etc
etc
There are also many common law duties. this is a very complex area of law.

There can be civil and criminal penalties for breaching the corporations Act.

You must remember a company is a separate legal person and you should not treat it as its assets were your own. There are cases where a minority shareholder (family) took court action because of something. Sometimes there may be problems that only become known if the company where to go in liquidation – then the liquidator may start asking questions such as why were the 2 shareholders living in the company house on less than market rents. etc. Problems could arise in the future too if shares are passed on or sold to another family member and then questions are asked etc.

There are various issues with running the business overseas and tax. The ATO will want to assess you on your world wide income and now it is in the USA you will get a tax credit for tax paid there because of the double tax agreements. If you move it to a 'non listed country' (a tax haven) it is possible but you will still need to declare your interest in the business – whether it is owned by a company with nominee shareholders or a special trust etc. It may be possible do lie to the ATO and get away with it but you need to be careful – look at project Wickenby.

For the house, it sounds like it is in your name now. If you transfer it to your wife there will be little asset protection because of the clawback provisions of the bankruptcy act. See the case of Cummins who was a barrister that transferred his half of the house to the wife in 1973 and later went bankrupt (after not lodging a  tax return for 45 years).

If your US company wants to buy the house it can, but there is little asset protection if the company is sued for a business related matter. If the company is providing you with living space then there are fringe benefit issues. There is also loss of CGT exemption and land tax exemption as it can't be your PPOR. You would also be up for stamp duty on the transfer to the company. There may also be corporation Act issues such as directors duties not to personally profit at the expense of the company etc.

There may also be stamp duty issues on transferring it to the wife. I think the exemption may only apply if there will be both of you on title.

For the business question it would be the party contracting with the buyer who gets the income. So if your company owned an online site and the client was paying for viewing videos for example it would probably be the owner of the site who would get the money. But the owner of the site could pay licensing fees, or sublease the site out etc and get some income diverted elsewhere pretty easily.

No, stamp duty should be the same where ever you are based. In some states, such as QLD, the rate is higher for non-owner occupied residences

You should be using a solicitor.

But you can do it, just go to the land titles office
http://www.lpma.nsw.gov.au/land_titles/dealing_forms/manual_dealing_forms

I  don't think they can because they are just leasing it.

Without CG it wil be impossible to create equity other than by improving the property to increase its value – or paying the loan down.

Funds borrowed or paid for with a credit card are a loan, so when you borrow or take out money from a loan and pay into a cc you are really only refinancing this debt.

Make sure you take steps to recitify this problem or you could be sued when one of them falls over (or fakes a fall over) and injures themselves.

Does what apply?

In NSW fixed trusts may be treated differently to discretionary for land tax purposes. No trusts can offset losses, but there is a way around if it borrowing to buy units – but careful drafting is needed and flexibility will largely be lost.