Hi All,

I think the confusion around the 30% tax capping in a trust has to do with the beneficiariess, ie.are they individuals or a company. If the beneficiaries are individuals, the profits of the trust are distributed to the beneficiaries who then pay tax at whatever their marginal tax rate is. In a discretionary trust, you would channel more income to the lowest income beneficiary. However if the beneficiary is a company, then a flat tax rate of 30% applies. In this case, appreciating assets do not attract the 50% CGT discount when sold.

Steve – the spiel for Wealth Guardian mentions that you should not put appreciating assets in a company structure. Does this include company as beneficiary in a trust? My understanding that to achieve true asset protection in a trust, you should have a company (non-trading shelf company) as trustee of the trust, rather than an individual, but the beneficiaries can be individuals. Why do some people have a company as beneficiary? especially now that you need to earn more than $75K per annum to pay more than 30% tax anyway.

Thanks, Luisa