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Trust Set Up

Trust

There are many different types of trust structures including discretionary family trusts, unit trusts and hybrid trusts. The most common type of trust is the discretionary trust. If you’re the trustee of a discretionary trust, you have the power to decide how the profit will be distributed among the beneficiaries. All trusts operating as a business must hold an Australian Business Number (ABN) and Tax File Number (TFN). 

Elements – Discretionary Trust Consideration 

Ownership Structure:  Number of beneficiaries governed by the Trust Deed.  Control and Management:   Trust Deed governs the Trust;   Trustee has control over assets and management.  Legal Liability and Risk:  Strong asset protection. More protection if Trustee is a Company. Taxation: Discretionary trust does not have to pay tax. Instead, the trust beneficiaries pay tax on their share of the trust’s net income. As a trustee, you can use your    discretion to decide which beneficiaries will receive income each year. Compliance:   Compliance can be onerous.  Paying superannuation:  Your trust must make superannuation contributions for any eligible workers it employs.     This includes you if you’re employed by the trust. Business Wind Up/Sale:  Dependent on Trust Deed. 

CPA TTI TPB NTAA PWC MYOB XERO ANZ