Characteristics of a Trust
- Unlike a company ,a trust is not a separate legal entity – It’s a relationship between a person (called a Trustee) that holds property/make investment decisions/trade for the benefit of another ( a beneficiary/s)
- Unlike a company (where one person can form it and be the sole director, shareholder, secretary etc.), a trust cannot be formed if there is only one person involved, that is the true is a the beneficiary
- Trust structures are very popular in Australia because it offers more flexibility in distributing profits, here’s a few statements that makes trust structures more appealing to many of our clients:
- Superannuation guarantee contribution doesn’t apply to trust distribution
- Bank interest income is only taxed at 10% for non resident beneficiaries
- Fully franked dividend is not taxed in the hand of non resident beneficiaries
- Access to the CGT discount is still available (unlike companies)
- Limited liability is still possible if a corporate trustee is appointed
- The structure provides more privacy than a company (unlike shareholders, beneficiaries are not easily traceable)
- There are many types of trusts, the most frequently used are:
- Fixed Trusts
- Unit trusts
- Discretionary Family Trusts
- Bare Trusts
- Hybrid Trusts
- Testamentary Trusts
- Superannuation Trusts
What services included in the cost of forming a company
At Haz Accountants our services include:
- Advising on the most suitable structure and forming the trust (trust deeds etc.)
- Registering your Trust with the Office of State Revenue and paying the stamp duty.
- Apply for an ABN (Australian Business Number) with the ATO along with a TFN (Tax File Number)
- Advice onto wether you will need to be registered for GST, PAYG withholding tax, Fringe benefit tax , along with other general advice such as opening bank accounts, keeping your records, dealing with subcontractors/employees etc.
How long does it take?
- If all necessary information are obtained and agreed upon, it’s formed within 1 hour
- ABNs are usually issued within 28 days
- Physical Business location and postal address
- Type of business activities
- How many Trustees, Beneficiaries will the entity have
- Full legal name, date of birth, addresses of Trustees and beneficiaries.
- Place of birth and TFN of the trustees if individuals or
- The Estimated business ’s sales/turnover during the first year of operation
Contact Us Now, for further disccussion.