Six key financial factors for Doctors entering Private Practice

Posted by Matt Connor on 14 May 2015
Six key financial factors for Doctors entering Private Practice

If you're a doctor looking to set up in private practice, you'll need to address a range of financial factors.

At Medical Financial Group, we work closely with our clients so that they can achieve the best business and tax outcomes.

Whether you're setting up a new medical or dental practice, buying into or joining an existing practice, we suggest you think about the following:
  1. Doctors may consider different types of business structures for their working arrangements. There is no one-size-fits-all - suitability will depend on the aims and needs of each individual. The structure you choose should be guided by your personal circumstances. These include where you work, as well as the infrastructure and staffing requirements you need to operate.
  2. Keep it simple as you consider which structure best suits your needs. Bigger, more complex business structures are not necessarily better. Unless there are complexities including shared costs for rented rooms, hired equipment, etc. it may be best to operate as a sole trader.
  3. Even if you are entering shared arrangements, we would generally advise avoiding partnership entities as they involve joint and several liability.
  4. Whichever structure you choose, the income individuals receive is classed as Personal Service Income (PSI). PSI's underlying rules dictate all structuring and tax administration for any type of service provider including doctors and dentists. The Australian Tax Office defines PSI as a reward for, or the result of, your personal efforts or skills.
  5. While PSI is generally taxed in the same way as any other income, a key difference is fringe benefits for private use exemptions. Fringe benefits are an extra benefit that supplements an employee's wage or salary, for example a company car, private health care, etc. The most common benefit for a separate structure (in contrast to a sole trader) is for the private use of a motor vehicle. Under a separate structure, if you need a car for work and another as a family car, this can save you tax.
  6. Keep in mind that your key consideration should be to protect your assets as well as put in place thorough tax planning arrangements. These should comply with the law while achieving the best tax outcomes and enabling your business to operate more efficiently and profitably.

At Medical Financial Group, we take a proactive approach to our clients' tax and accounting needs. Please feel free to contact us with any questions you may have via phone: (07) 3363 5800 or email:

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Should you buy property with your self-managed super?

Posted by Sean O'Kane on 30 April 2015

Borrowing money to buy property through your self-managed super fund (SMSF) is becoming increasingly popular in Australia. Lots of medical specialists seem to be doing it, but is it right for you?

This kind of investment has risks as well as potential benefits. Before you decide to buy property through your SMSF, you need to think carefully and feel confident that this step fits into your overall financial advice plan.

To help guide your thinking, we've put together the following up-to-date summary of potential benefits and pitfalls of SMSF property investment.

For more detailed information, and a chance to speak to one of our financial planning partners in person, click here to register for one of our free upcoming evening seminars in:

- Cairns, 21 May, Shangri-La Hotel
- Townsville, 4 June, Rydges Southbank
- Brisbane, 18 June, Fireworks Gallery, Newstead

Reasons to consider using your SMSF for property investment
- Up until retirement, investment income associated with the property (i.e. capital gains, rent) is taxed at a top rate of only 15%.
- If you still own the property after you retire, you will pay no tax on either capital gains (if you sell) or rent (if you keep it).
- You can invest in paying off the mortgage on your own commercial property rather than paying rent to someone else.
- Historically, property has provided good investment returns.
- Properly managed, debt can be used to create wealth.

Possible pitfalls of using your SMSF for property investment
- It's not about negative gearing (as it is if you buy a property in your own name). The loan with a SMSF has to be paid off. In our experience this means you need a minimum of 30% deposit for commercial property and 40% to 50% for residential
- The quality of your property investment is always important. Location plays a big role, and an inferior property will still be that whether it's purchased using super or not.
- Australia's Reserve Bank and economists have recently expressed concerns that the property market is overheated.
- Buying a property through an SMSF is complicated and can be expensive to set up and manage.
- Property is 'illiquid' (can't be easily converted to cash), so you need to invest for the long term.
- For smaller fund balances, buying property can lead to an undiversified portfolio, increasing your investment risk.

If you're considering purchasing a property through your SMSF, seek professional advice to make sure this move is part of a broader plan to enhance your financial future.

For further information, contact Medical Financial Group
Tel:  (07) 3363 5800

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Setting up in private practice: 4 questions every medico should ask.

Posted by Matt Connor on 22 April 2015

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How to enhance your financial future - 5 steps for medical registrars.

Posted by Neal Durling on 24 March 2015

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FOFA: standing up for consumer rights

Posted by Sean O'Kane on 9 December 2014

If you are not someone involved directly in the Financial Planning industry, you would be forgiven for wondering what has been going on with the Future of Financial Advice (FOFA).  Before I go on I should 'nail our colours to the mast' and say we liked the FOFA legislation passed under the previous government, but may stop short of wearing the cap in the picture.

I for one was very confused that the new government decided to spend time and money on watering down the proposals, particularly as they seemed to have a broad spread of public opinion on their side.  Reading between the lines I think there were some powerful vested interests at work behind the scenes, including the big banks. Why else would you take a backward step in protecting the consumer?

So whilst I find some of what our Senate is doing slightly bizarre, I whole heartedly supported the dissolution motion passed through the senate with the help of Senators Jacqui  Lambie and Ricky Muir. The dissolution overturned the watered down regulations passed by the Coalition in July of this year.

So what are we back to? The key components of the original legislation, which now remain in place, are as follows:


  • the original definition of retail client has been restored so that fee disclosure statements need to be given to all clients and advisers are required to obtain consent from their clients every two years for ongoing fee arrangements
  • the original best interests duty provisions have been restored
  • the exemption for a monetary benefit given to a person who gives general advice to a retail client on behalf of a financial services licensee from the conflicted remuneration prohibition has been removed

Looking at the first and most contentious issue, every two years an adviser has to provide their client with a disclosure of what they have been paid and gain consent for continued engagement. I hear some of you say what only every 2 years! And you are also probably wondering what has been happening up until now.

As a business that has from the start, in 2008, had annual re-engagement with its clients, we dont think that 2 years goes far enough. We are also think that the grandfathering arrangements that allow existing clients in certain circumstances to fall outside of the new rules should not be there. And as for best interests duty provisions, come on, why would that be something that would be taken away?

If you think that we are humming to a different tune, then you would be right.

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The information on this site is of a general nature. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.

The financial planning services are provided by Medical Financial Pty Ltd trading as Medical Financial Planning (AFSL 506557)