All Topics / The Treasure Chest / Company vs. Entity tax deductions

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  • Profile photo of Most excellentMost excellent
    Member
    @most-excellent
    Join Date: 2003
    Post Count: 100

    What are the tax implications should I choose to begin a company and trade under it’s trust fund.
    Have I many more tax deductions that I can claim?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    There are generally more deductions available to a company or a business than an individual.

    For some unusual ones (eg alcohol) see
    http://www.gatherumgoss.com/business.htm

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of trishatrisha
    Member
    @trisha
    Join Date: 2003
    Post Count: 15

    Terryw

    Had a look at th sight, theres some interesting deductions to keep in mind.

    Can you clarify the advantage of setting up an IP in a trust
    Trish

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Using a trust allows you to distribute any income at your (or the trustee) discretion to any beneficiary of the trust. If you buy in your name only, you are stuck with all the income. Beneficiaries are usually listed vaguely such as any current, future or past spouse, any children or future children, step children and grandchildren. So you may have potential beneficiaries that aren’t even born yet! You never know how your circumstances will change.

    eg. Say you were working and your spouse wasn’t. If you had $6000 in positive rental income, you could simply distribute all of this to your spouse and no tax would be payable.

    Another major benefit is asset protection. Holding assets in Trust means they are not really yours, so if you are sued, those assets are protected (to a certain degree).

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of trishatrisha
    Member
    @trisha
    Join Date: 2003
    Post Count: 15

    Terryw

    Thanks for your answer. They are different to Tennant in common contracts cause you have to stipulate the breakup percentage, is that right whereas trust guess you can see how the year has gone and distribute any money according to you incomes.
    Are trusts espensive to set up

    Ta for your help
    Trish

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