If you are starting a new company or restructuring, a trust may be a great option.
At Carters Tax Advisory we can take an in depth look at your business and help you choose the correct corporate structure. 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).
As a general rule, trusts are a more tax effective structure as a holding entity for investment and commercial real estate and other fixed assets.
Often used for tax minimisation.
Limited liability for each beneficiary (Asset Protection).
Tax – Income splitting
Can assist with transfer of assets to the next generation.
The structure is complex.
The trust can be expensive to establish and maintain.
Difficult to make changes to a trust or dissolve it.
The powers of trustees are restricted by the trust deed.