A trust is a structure that you have likely heard of. It’s sometimes described as a ‘family trust’. In fact there are two main types of trusts; a discretionary trust and a unit trust. A trust is a type of business structure that appoints a trustee to operate the business on behalf of its members. A trustee can be a person or company and the members of the trust are called the beneficiaries of the trust. They are a very effective structure for tax and asset protection purposes.
Taxation for Trusts:
Trusts offer a lot of flexibility for tax purposes. The key advantage of using a trust as a business structure is the ability to decide who will benefit from the income of the trust. This means you can ‘split’ the income in the most tax effective way allowed by the trust deed and the tax law.
Trusts have their own ABN and tax file number and must lodge a trust tax return each year. Generally speaking, trusts do not pay tax. Instead, a trust will distribute profits to its beneficiaries, and the beneficiaries will pay tax on their share of the profits at their own marginal rate of tax.
Similar to a company, a trust is a complex business structure and its administration and compliance costs are more expensive than a sole trader or partnership. However, the benefits of using a trust as a business structure do outweigh the costs.
Consult us to know more about a trust structure and if it suits your business needs and trust tax implications.
Our services include but are not limited to:
Tailor made trust deed to meet your business needs
Applying for ABN for trust
Trust profit distribution to beneficiaries in most tax effective manner
Tax return for trust
Preparation and Lodgement of Business Activity Statement
Accounting for Trust