Thi Kim Nguyen, aged 39 years, visited your practice to discuss GST-related issues and a possible change in her business structure. She is currently working as a sole trader and often has to treat various customers to lunches to keep the sales contracts. The lunches are all business related. In addition, Kim uses her private car to drive to the lunch venues. Kim wishes to claim GST credits on the business lunches and car expenses. Kim earns $150,000 (net of deductions) from her sole trading business. She wishes to change her business structure from sole trader to another structure commencing on the 1 July 2022. She has provided you with the following financial and other family details. Thi Kim Nguyen has the following family members living with her: Ahn Nguyen: Kims spouse who is 42 years old. Ahn is a school teacher, earning $70,000. Duc Nguyen: Ahns father who is 70 years old. He retired from his job as a sales manager at Sun Super Ltd on 10 July 2021 (at the time of retirement, his gross income was $2,000) and has not earnt any income since his retirement. Annabelle Nguyen: Kims 20-year-old daughter. She is a full-time university student, who currently has no income. Clare Nguyen: Kims 16-year-old daughter. She is a high school student. Kim is considering one of the following options: A partnership with Ahn, Duc, Annabelle and Clare Nguyen in an equal profit-sharing ratio of 20% each. Annabelle and Clare will not be involved in the partnership business at all, but Kim thinks this is a sound tax planning strategy, as the profit will be divided by five partners. An Australian registered private company; A discretionary family trust. Case A Questions With reference to the relevant legal principles, advise Kim Nguyen on the following issues in your draft business letter of advice:

1) Can she claim GST on business lunches?

2) Can a GST credit be claimed on her car expenses? Provide strategies for Kim to claim GST credits regarding recording requirements.

3) Would having a partnership with all family members be considered tax planning or tax avoidance? Advise her with examples to distinguish between tax planning and tax avoidance.

4) Which of the above-mentioned business structures would best minimise her overall income tax? Comment on the tax implications of each business option considered.