Hi All IP Experts or IP Accountants, i am very confuse when my accountant told me that I can't have my corporate trustee to be also the beneficiary under the same trust? Is this true? Can anyone confirm that? I am very confuse because all my reading seems suggest otherwise? The reason we wanted 2DT was because DT01 for running business & DT02 for IP purpose (asset protection) & both have same corporate trustee. The accountant spoken to doesn't seems to like the idea of 2DT because the loss in DT02 cannot be offset by income from DT01? I can understand where he is coming from. Would be happy to listen to the forumites opinion? Really appreciate if anyone out there can advice their experience. Many thanks!
Firstly, you are exactly right to want a separate DT for business and property holdings.
There seems to be two different points here.
1) A company acting as trustee CAN be a beneficiary of a trust, but it SHOULD not. It's sole objective should be to act as the trustee. Also, if Company trustee of DT01 is a beneficiary of DT 02, a 'trustee beneficiary' statement needs to be lodged with the ATO.
2) The TRUST can act as a beneficiary of another trust, to use up the tax losses. To do this, however, the trusts will need to lodge Family Trust elections, and interposed entity elections with the ATO. These elections basically limit who the trust can distribute to, once it has income to distribute.
Thanks Dan42, so it seems by naming DT01(IP) as beneficiary of Business Trust, we'll then be able to offset income loss from Investment Trust against the Business Trust? Are you aware of any implication by doing so? Is there any pitfalls to look out? If so how can these be explicitly deals with in the trust deed? Thanks for your advice.
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