1. Management Accounting (click for more info)

The success of your project depends on you making smart business decisions, which takes the right information at the right time. 

We will review your information needs, including the needs of your project’s stakeholders, and ensure you always have the most appropriate and timely information available.

Our customised reports can:

• continuously track profitability;
• compare budget to actual costs;
• analyse cash flow and future funding requirements;
• allocate revenue and costs between stakeholders; or
• any other key financial data you or your stakeholders require.  

2. Decision Making (click for more info)

Should you start a project?  The allocation of valuable funds should be supported by valuable and reliable information.

Pilot’s Property Services division provides project feasibility analysis, due diligence processes, capital and funding reviews and taxation advice to assist with your planning.

We can assist with:

• commercial and taxation structuring advice
• taxation review of contracts for acquisitions and sales;
• project viability, sensitivity and risk analysis;
• ratio analysis, including internal rates of return and net present value;
• revenue and profit estimates;
• identification and taxation treatment (including Goods and Services Tax) of key capital and ongoing costs; and
• funding and equity cost analysis.

3. Financing (click for more info)

Getting the right funding at the right time takes the right partners. Pilot Partners’ Property Services division knows what your financiers need to meet your needs.

We will assist with applications for finance and liaise with your financiers, legal representatives and other key advisors.

Pilot can prepare:

• cash flow projections;
• budget comparison reports;
• finance draw-down assistance; and
• any other information you or your financiers require.

And if your needs are more boutique we will assist with designing the best solution, including advice on provision of guarantees or other alternative funding arrangements.

1. Property Development (click for more info)

With the ever increasing level of activity in the property industry whether it be through investment, development or construction the need and demand for professional tax advice is imperative.

Understanding the interaction of the concessional capital gains tax provisions with the general income tax provisions and how they apply in a development and investment context is imperative to maximising the after returns of any development activity.

Pilot Partners property division works closely in the initial stages of a development with our clients so that we are able to make the appropriate recommendations to ensure that any development is structured to realise the necessary commercial outcomes and also achieve the most effective after tax outcomes subject to those constraints and within the boundaries of the law. 

This requires us working closely with your legal team to put in place the necessary agreements which will facilitate the development and provide tax effective outcomes.  The selection of the appropriate operating and investment vehicles at the acquisition phase combined with the necessary management and development agreements are imperative in achieving these goals.

2. Personal Investment & Retirement (click for more info)

For those people making a passive investment in property, the availability of the  CGT discount which reduces a taxable capital gain by 50% (provided the asset has been held for at least 12 months) means investors if structured appropriately face a maximum tax rate of approximately 23% on their resulting gains.

We also understand the intricacies and benefit of self-managed superannuation funds as an investment vehicle.  With careful planning property investment can also play a part in retirement and superannuation planning.  The sweeping changes provided in the 2007 Federal Budget potentially provide those people managing their own superannuation with the opportunity to realise tax-free gains on property investments once they have retired.

3. Goods and Services Tax (GST) (click for more info)

The introduction of the GST legislation brought with it significant complexity and uncertainty for the property industry.  The need for GST to be addressed as a significant issue when negotiating on any property deal is imperative. 

Without a proper understanding of the application of the GST law businesses and investors transacting in the property market can leave themselves exposed or miss out on cost savings opportunities.

Since the introduction of the GST law there has been significant tightening of the rules designed to protect the integrity of the law, this of course has led to increased obligations on taxpayers to ensure they are fully compliant with documentation requirements whether that be sign-off on a contract or having appropriate valuations in place.

Pilot Partners property division has GST specialists who advise their clients and legal advisors as to the application of the GST rules whether it be using the margin scheme, going-concern exemption, input taxed (residential premises) or taxable supply (new residential premises) and providing protection from unintended consequences arising from property transactions.

We also understand the application of grouping provisions and regularly deal with joint venture enterprises and are able to apply our knowledge to the most sophisticated operators in the industry where required.

1. Accounting Standards (click for more info)

Where financial statements are required each entity must first determine whether or not it is a reporting entity.  This is important in establishing which accounting standards must be applied.

Although the determination is not always clear cut, the following issues are to be considered:

1. whether the majority of shareholders also run the business
2. the size of the operations
3. whether there are political or social implications
4. whether anyone will rely only on the financial statements to make investment decisions

If an entity is a reporting entity then it must apply all accounting standards to the extent that they apply to its operations.

Non-reporting entities generally can decide the extent to which it will apply accounting standards.  If audited under the Corporations Act 2001 there are five standards that must be applied in full.

For property developers and builders the most relevant standard is AASB 111 Construction Contracts.  This standard deals with the recognition and measurement of construction contracts by an entity that performs the construction work.  For fixed price contracts the profit on each contract must be determined annually by reference to the stage of completion and taking into account any expected losses.

Please contact us if you have any queries about accounting standards.

2. Trust accounts (click for more info)

Certain persons need to be licensed under the Property Agents and Motor Dealers Act 2000.  A trust account may also need to be established and audited

The following people need to be licensed:

1. real estate agents
2. auctioneers
3. property developers
4. resident letting agents

A trust account must be set up when the licensee starts to collect moneys from the public eg. rent moneys or deposits on property sales.  There are strict requirements covering the operation of a trust account including limits on commission payable.

Each year the trust account must be audited.  After the first year, the auditor must carry out two unannounced visits plus a final visit before preparing a report on the audit.  The licensee must ensure that the audit report is lodged with the Office of Fair Trading within 4 months after balance date.

Please contact us if you have any queries about trust accounts.

3. Corporation Act Requirements (click for more info)

If your company is incorporated under the Corporations Act 2001 it may be need to be audited and prepare and lodge financial statements.

An audit will be required if:

1. the company is a public company
2. the company is a proprietary company that satisfies two of the following rules:
1. gross revenue is greater than $25,000,000
2. gross assets are greater than $12,500,000
3. number of employees is greater than 50
3. the company’s shareholders want an audit
4. it is requested by the Australian Securities and Investments Commission

An audit may also be required where a foreign company operates in Australia or an Australian company is controlled by a foreign company

Financial statements must be prepared by all companies that need an audit under the Corporations Act 2001.  They must comply with all applicable Australian Accounting Standards and the other requirements of the Corporations Act 2001.

Generally the financial statements must be lodged with ASIC within 4 months after year-end.

Public companies must also hold an annual general meeting.

An audit may also be required where a foreign company operates in Australia or an Australian company is controlled by a foreign company.

Please contact us if you have any queries about the Corporations Act 2001 or auditing.

4. Building Services Authority Licensing (click for more info)

All businesses that conduct building work in Queensland are required by law to be licensed with the Building Services Authority (BSA).  The purpose of the licensing laws is to increase consumer protection and to reduce the incidence of financial failure.

There are strict financial reporting and solvency requirements which all licensees must comply with as follows:

1. Net Asset Test
   Maintain adequate capital relative to the size of their business. This is achieved by requiring a minimum level of unencumbered tangible assets based on the level of turnover that is expected for the next 12 months;
2. Current Ratio Test
   Operate with greater current assets than current liabilities; and
3. Reporting Requirements
   Licensees are required to have an accountant perform an independent review report or audit (depending on the turnover of the business) either annually or more frequently if the turnover is larger.

Recent changes to the BSA’s licensing rules, together with changes to the Corporations Act 2001 that mean auditing standards now have force of law, have put a greater focus on ensuring compliance with these requirements.

Pilot Partners Property division has extensive experience and skills in assisting licensees discharge their reporting obligations as well as providing advice to assist with satisfying the strict financial reporting criteria.