You are commencing work after successfully graduating from QUT. You have a job in a small suburban accounting firm which specialises in providing tax structuring and personal tax planning advice to micro-businesses. Your partner has provided you with the following information.

John and Xina have both been operating as sole traders for a number of years and have decided to go into business together. They have provided you with a summary of their proposed business operations and their personal circumstances.

Business

• The business is high risk adventure sports directed at businesspeople who want to see themselves as athletes. The activities include rock climbing, bungee jumping and power yoga.
• John has a number of assets that will be contributed to the business and Xina has generated a lot of goodwill in her past endeavours and will attract a lot of clients to the new business.

John

• Married for over 20 years. He owns his main residence with his spouse and also has a large parcel of EastBank shares that he acquired in 1980.
• Three Children: Alpha who is fifteen years old, Gamma who is 19 years old and Beta who is 25 and has been living in London since early 2019 with no intention to return to Australia. Alpha and Gamma both live at home with their parents.
• Total superannuation balance of $145 000.

Xina

• Has a number of investments, the income derived from these investments varies greatly. Some years she earns $10 000 and other years it can be greater than $200 000. (Excluding any profits from this current venture).
• Is single and has no known living relatives.
• Total superannuation balance of $1 900 000.

REQUIRED

Prepare an internal briefing note for your partner advising of the most appropriate structure and any other tax planning strategies for your clients.

Make sure you explain your reasons.