Family trust with company as beneficiary

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wyl
Member
@wyl
Join Date: 2010
Post Count: 1
May 6, 2010 - 1:36 pm
Hi all,
is it good to have my own operating company as a beneficiary of a family trust?
My company is new AND need cash to get it running.
are there any tax benefits doing this?
Cheers
Steve
Paul Dobson
Participant
@pauldobson
Join Date: 2003
Post Count: 1,196
May 7, 2010 - 12:24 am
Hi Steve
We always check that our Trust Deed list of beneficiaries includes our associated companies. Then, when we don't want to make a distribution to any individuals for tax reasons, we can distribute to a company and only pay the company tax rate (currently 30% and possibly reducing to28%).
The ATO has recently tightened up on this movement of funds out of a Discretionary Trust into a "bucket" company but, from my reading of the new rules, it still looks worthwhile.
As always, don't rely on this information. Check with your accountant or other appropriate professional..
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
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Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
May 7, 2010 - 9:09 am
Often the wording of the deed means that any coompany in which a primary beneficiary has shares, is an office holder of etc, is also a beneficiary of the trust – without actually needing to be named.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au