All Topics / Legal & Accounting / contracting work using DT???
Hi guys,
My next IP will be in a discretionary trust, but in the mean time, can I use my DT to contract IT work?
Do my DT have to have a company component? I plan to have my wife, 2 kids and mother in-law as trustee. Will this complicates the process?
Thanks
Kind regards
PtnOriginally posted by ptn:Do my DT have to have a company component? I plan to have my wife, 2 kids and mother in-law as trustee. Will this complicates the process?
Did you mean trustee or benificaries?
You should be able to do contracting from your trust but the distributions will be affected by the 80/20 rule. If more than 80% of the income is earned by you, the distributions will go to you only (check your personal circumstances). Most DT’s are able to do business.I would keep the IP’s and contracting in seperate entities to limit your liability. A seperate trust would be better for this.
Hope this helps
CATA
Asset Protection Specialist
[email protected]Thanks Cata,
I like to put some IP into the same trust to dilute the 80/20 rule.
Also, if I add my sister as trustee into the trust with her contracting income to further offset the 80/20 rule, how hard would it be in 2 years time to remove her from the trust ?. Assuming an IP exist in the trust.
Thanks
PtnPtn
Get some proper advice on this first.
You should not be holding property in the same trust that have traded in. What would happen if something you did contracting goes wrong in a years time and you get sued?
Also be careful on putting in too many trustees. This increases risk, and also can cause problems with loans down the track.
Terryw
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