Business Services - For many years we have supplied the highest quality services in Company, Trusts and Superannuation Fund formations. Our structures are designed to provide you with the ultimate in Asset Protection and Tax Minimisation.

Trusts

> Click Here to Order a Discretionary Trust
> Click Here to Order a Unit Trust
> Click Here to Order a Deed of Appointment

Our deeds are designed to operate within the field of asset protection and tax minimisation. Our deeds are of the highest quality and conform to relevant legislation and statutory requirements.

Discretionary trusts are drawn up to provide the maximum flexibility in the way the trust is run. Income can be streamed and you can establish a limited or extensive number of beneficiaries

Unit trusts offer a similar degree of flexibility, with four different unit classes included in the unit trust deed.

Each Register comprises:

• Easy to use tabbed sections for quick reference filing
• 3 bound and one loose leaf copies of deed
• Relevant minutes of meetings
• A bank account pack, including a letter to your bank manager, a bound copy of the constitution and copy of the ASIC form 201
• A tax and business pack, including forms to elect a public officer, ABN application forms, an information booklet to apply for tax and company letterheads
• Stamp Duty documentation together with cheque
• A PDF copy of the Trust Deed

Order a Discretionary Trust today to obtain the highest quality deed which conforms to all relevant legislation and statutory requirements.

Order a Unit Trust today to obtain the highest quality deed which conforms to all relevant legislation and statutory requirements.

TRUSTS FREQUENTLY ASKED QUESTIONS

What is a Trust?

A trust is a business structure that requires a trustee, a trust and beneficiaries. The trustee holds property and earns and distributes income on behalf of the beneficiaries. A trust is a cornerstone to Tax Minimisation. The trustee (usually a Pty Ltd Company) owns the property and distributes income to the beneficiaries of the trust, who are usually family members. In this way a person who would otherwise earn a large taxable income can split his or her income between beneficiaries who have low marginal tax rates Income is earned by the trust company. The trustee is empowered to distribute the trust income to the beneficiaries and in what proportions he or she chooses. In the case of a family trust the trustee could for example distribute income to the children of the family, thereby reducing the taxable income of the parents.

A trust in its simple form has a settlor, a trustee, and beneficiaries. The settlor sets up the trust. The trustee manages the trust property (investments, assets, etc.) and pays out any net income for the benefit of the beneficiaries.

We recommend several types of trusts, a Discretionary trust, a Unit trust and the Hybrid trust. While the characteristics of each trust are similar, their applications as part of your wealth creation program are different.

How long does it take to set up my Company/Trust Structure?

Generally allow 7-10 working days from when we receive your order during which time our qualified practitioner will be in contact to ensure that this is the most appropriate set up for your individual situation.

How does a Company/Trust Structure work?

Income is earned by the trust company. The trustee is empowered to distribute the trust income to any beneficiary and in what proportion he or she chooses.

What are the advantages of a trust structure?

The main advantage of a trust structure is tax minimisation and asset protection.

What are the main benefits of setting up a Company/Trust Structure?

Our clients will be able to achieve the ultimate asset protection strategy where the trust and not the beneficiaries own all assets. There is no tax at trust level provided profits are distributed and a 50% capital gains tax discount will apply and flow through to beneficiaries.

What are the elements of a discretionary trust?

It is fairly involved but to explain the main characters in a discretionary trust:
The Trustee is the legal owner of the trust property and not the beneficial owner. For example, when purchasing a property, while the property is registered in the name of the trustee, the trustee does not legally own the property. The property is held on trust for the beneficiaries. The trustee carries out all transactions of the trust in its own name and must sign all documents for and on behalf of the trust. The trustee's overriding duty is to obey the terms of the trust deed and to act in the best interests of the beneficiaries.

The Settlor is the person who creates the trust by "settling" the initial sum of money to be held on trust for the beneficiaries. This is usually a nominal amount such as $20 to keep stamp duty to a minimum.

The Trust Fund is all the money and property held in the trust. This includes the settlement sum, accumulated income and any other money and property held by the trustee pursuant to the terms of the trust.

The Beneficiaries are the people (including entities) for whose benefit the trustee holds the trust property. The beneficiaries do not have an interest in the assets of the trust. Beneficiaries are eligible to receive a distribution of income or capital at the trustee's discretion.

The Appointor is the person who calls the shots. The Appointor can hire and fire the Trustees. The Appointor is the really important player in the trust.

The Trust Deed defines the relationship between the trustee and the beneficiaries in a document setting out the rules and terms of the trust.

Some trusts also have a Guardian as well as an Appointor.

Do I need a trust to trade or buy property? Why not use a company?

In our view, there are only four situations where you should set up a company:

• To be a trustee for your discretionary trust;
• To accumulate income with a maximum tax of 30% (without drawing the money from the company; once you withdraw you pay the maximum tax anyway);
• To contract out your personal services for income (e.g. you are an engineering or roofing contractor who relies on your personal skill for income); and
• To comply with industry requirements (e.g. some network marketing companies require their product distributors to use either their own name or a company; a trust is not allowed).

Why would I set up a Trust?

Apart from the four situations above, trusts are the best structures to do business, especially stock market trading or property investing. Trusts have some wonderful advantages:

• A trust has no set tax rate. You can give the trust profits to the persons or charity who is paying the lowest tax rate. Or if everyone is on the highest tax rate, you can give the profits to your company.
• Discretionary trusts have great asset protection. Nobody owns the assets of the trust. The trustee holds the assets and the trustee decides who gets the profits and who gets the assets.
• Unlike companies, you are entitled to the 50% capital gains tax discount on any assets held for more than 12 months that you sell at a profit. This is a very important advantage for trusts that do hold real estate.
• Unlike companies, you can loan money out of your family trust. And you have no tax penalties.

Do Trusts have any weaknesses?

Yes, there are two general weaknesses:

• You cannot accumulate profits in a trust without paying tax. You must distribute the profits each year. However all you need to do is distribute the excess profits to a bucket company and cap the tax at 30%.
• A serious weakness is trusts that buy heavily negatively geared property. Any losses from negative gearing cannot be claimed as a deduction but must be carried forward to offset against future income.

Do Trusts protect my assets?

Yes. We can assist you to set up trusts that will protect Your assets. We have some great structures we can implement immediately to protect your assets and ensure that if your business does get sued, your personal assets remain secure.

Should I set up my Trust before Trading or Buying Property?

Yes. Once you start doing things a certain way, it becomes harder to change it later on. There are rules about changing Your business structure to avoid tax or stave off creditors. It can be done but it is more expensive and more risky.

I already have a Trust that I use for my Business. Can I just use that?

No. If someone sues you in your business, all assets in the trust are at risk. You must do your trading in a separate trust, otherwise all your trading capital is at risk if you get sued in your business.

If You have already started trading in Your business family trust, come and see us immediately and we will arrange a trust split, i.e.. we “cut” the trust in half to create two separate trusts, with minimal stamp duty and no capital gains tax.

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