Costs associated with trusts

You need the trust deed which can cost from $185 up to around $1000.
Company set up costs $412 at asic
Each state may also require you to pay stamp duty on the trust. Was $200 in NSW, but recently went up to $550 I think. QLD was Nil in the past. Not sure about VIC.
If you need some advice it will cost you a bit more on top of all this – and it a good thing to have cause if you set it up wrong you will be in trouble.

On going costs are $212 annual ASIC fee and accounting. The company will need a tax return which should be a nl return and should cost much, and the trust will need a tax return – as well as your own personal ones. The accounting shouldn't really cost that much more than if you put the asset in your own name as there is not really much more involved.

You cannot add beneficiaries later after the trust is formed or it will be a resettlement. That means the ATO considers a whole new trust is being formed and all the assets from the old trust are transfered to the new trust = stamp duty and CGT.

But you do not have to add beneficiaries usually because most relatives will be included automatically. Deeds are worded so beneficiaries include "all children, future children, step children…….." etc (or the good ones are).

Kids can earn up to $3000 pa in passive income and pay no tax. If they are actually working they can earn more – like adults I think.

not sure what a supplemental deed is, but the deeds can be modified, with great care, when need be. eg. the recent Bamford case regarding the definition of income made it wider. Deeds need updating ever few years as laws change. That is why it is probably best to just form a new trust every few years. Ideally have one proeprty per trust and when that property is sold don't reuse the trust but form a new one – works out cheaper if you live in QLD as no stamp duty on trust deeds there!

Adam

This is from last fin year
http://ato.gov.au/individuals/content.asp?doc=/content/20046.htm&pc=001/002/046/002/018&mnu=&mfp=&st=&cy=1

I should have added that people on low incomes can receive a tax rebate. Thats why the taxable income is lower but they can receive a higher amount and not pay tax – the rebate means that the government pays the first bit of tax for you.

I don't know how it is worked out for kids, but for adults the first $6,000 in tax free, but if you were to earn up to $15,000 the tax would be $1350 but the government will allow a $1350 low income rebate so the net result is no tax payable.