We were engaged by a client to take over the accounting and taxation work for their management Rights business. The client had failed to use a specialist management rights accountant, and an interim review of their affairs revealed that they had not maximised the borrowing opportunities that are available to an entity acquiring management rights.

Strategy

Analysis of the sales contract and settlement statement revealed the potential for a further 40% of the loan to be treated as tax deductible, delivering potential annual tax savings of around $18,000​

Luckily for our client, the lending agreement was coming up for renewal and we arranged an introduction to a Gold Coast based business banker who specialised in the Management Rights lending space. The lender was able to secure a slightly better interest rate and successfully restructured the facility for the term of the caretaking agreement. Our client was able to lock in annual tax savings of at least $18,000 for the lifespan of their business purchase.​