Hey all. I'm looking at earning some significant passive income via business investments and also lining up a positive cashflow property investment but I don't have a business structure to minimise tax.
From what I hear, a trust with a company as a trustee is a good idea, particularly if you have a family member who is over 18 and doesn't earn much. However I'm not really sure.
I'd be interested to hear what has worked well for others? Also, comments on any pitfalls or tricks for any particular structure would be good too. Cheers.
Discretionary trusts allow the greatest tax flexibility as the trustee can choose who to distribute to each year (from a range of beneficiaries). To save tax they usually distribute to the lower income tax payers first, so that less tax is paid overall. Children can also earn about $2600 pa each in unearned income each year before they have to pay tax.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Michael
We use a discreationery trust with a corporate trustee as one of our business structures. You mentioned the idea of a campany as tustee and I've got to agree with you.
We ensure that the corporate trustee (i.e. company trustee) is a $2 company with a single director and we ensure the company's only reson for existance is to be trustee for this particular trust, i.e. for best asset protection we don't let it "do" anything else.
Also we try to make sure that the the director of this corporate trustee has minimal assets in his/her name.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
