I run a physiotherapy clinic through a company. I am the sole director and the only person generating income.
I have used the ATO Personal Services Business (PSB) tool, and it indicates that my business qualifies as a PSB.
Given this:
- If I distribute part of the company profit to myself as dividends, can I retain the remaining profit in the company for future business use (e.g. clinic renovation and expansion)?
- Would retaining profits in the company in this situation raise any concerns under the general anti-avoidance rules (Part IVA)?
- Are there any specific conditions or risks I should be aware of when retaining profits in a PSB structure where income is primarily generated by one individual?
I want to ensure I am compliant and not structuring things in a way that could be seen as tax avoidance.