Formation of trust

A is an arrangement where A owns something for B. A parent opening a bank account for a child for example. Cost nil.

If you want a more complex trust, then you will need a deed. Deeds can cost from about $100 up to $10,000 depending on the type of the deed and the person drafting it.

In many States there is stamp duty payable on the deed. In NSW this is about $550, depending on the inital settled sum.

If you want a company as trustee, then you will need to pay the company set up costs and the ASIC fee of $400. There is an annual ASIC fee of $212 as well.

Companies and trusts will need tax returns, accountants fees usually depend on how complex it is – the more properties the more costs invovled (but you will pay this anyway with owning in your own names).

By 'join' do you mean beneficiary? if so anyone can be a beneficiary, even people who don't exist yet – future grandchildren etc. To be a beneficiary they have to be named, or fall into a class – such as grandchild.

Foreigners can be beneficaries – but there are tax implications. Certain incomes have withholding taxes which vary depending on the type of income (royalties, dividends etc), and the recipient may also have to pay tax in their home countries as well

I just set up a discretionary trust for investment purposes through a conversation with my Accountant and Solicitor, cost me $385.

cheers

Shane

Terry
Can you tell us what form of structure you would set up for your average wage earner investing in residential property and development?  What downfalls have you heard of with some trusts-there are lots of negative comments around regarding Chan and Naylor PITs.  And in your experience do the main banks lend to this form of Trust?  Cheers for your insight, mrs p

I will have to agree with Terry here, it seems as though it is not only the banks who are not overly happy with the Hybrid Trust structure at present, after a discussion with my accountant last week she advised me that the ATO were becoming increasingly aware of their use.

Discretionary Trust is my recommendation also.

cheers

Shane

I have one of the SMSF trust deeds in my office. This company has been around for a long time and the deeds have been vet by many banks and accountants alike. To say any deed is a sure thing would be suicide, but from all accounts this firm has been and will be around for the long term.

Further, The owner is also very giving of his time. I have talked to him on several occasions.

I should receive royalties for this plug….

http://www.birchcorp.com.au

Hi Terry,

If I set up a trust ahow does the $2 company come into it.
Is it the following:

1. Trust
2. Company – Trustee
3. Directors of the company the beneficiaries

???

If the directors are seperate beneficiaries are they paying company tax before funds are dispusred?

What is the most tax effiecient set up.

I think Terryw points are very valid.  How would you know that the trust is tailored to fit your circumstances.  Also stamp duty and registration would need to be paid in each state.  There is more to it than meets the eye.  I haven't had a good look at the sight and I believe your trust may be setup legally but how do you know that it fits your situation and who provides the understanding of how it operates.  The trustee….being yourself I imagine would have to be quite up with the duties and responsibilities of a SMSF.  Who provides this technical knowledge and updates and what cost does that come at ?

Thanks

Just regarding the Discretionary Trust- if losses through neg geared properties are trapped in the trust what other options are there for investors in this situation? 
mrs p