PSB status – retaining profits in company for business reinvestment

 Author: rainaroy26(Initiate)Initiate

26 Apr 2026

If your company qualifies as a Personal Services Business (PSB), then the PSI attribution rules don’t apply. In that case, the company can operate like a normal trading company.

Yes — you can distribute part of the profit to yourself as dividends and retain the remaining profits in the company for genuine business purposes such as clinic renovation, expansion, or future investment.

Retaining profits alone generally does not trigger Part IVA concerns, provided there is a clear commercial reason and the structure isn’t mainly used to obtain a tax benefit.

Main things to watch:

• Maintain PSB status each year
• Avoid using company funds personally unless taxed properly (salary/dividend/Div 7A loan)
• Keep retained earnings linked to real business needs

If structured commercially and documented properly, this is a common and compliant approach for incorporated professional practices.

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