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  • #987588
    Mathewwriter
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    Hi all,

    I’m an author (writing ebooks under my name and a pseudonym) who currently operates as a sole trader.

    I write a book (say science fiction), upload it to Amazon/Apple/Nook/etc and then make royalties in USD/GBP/etc which are paid to me via Paypal and Payoneer (providing a USD bank account connected to a card that I use to take our AUD cash and then deposit into my AUD business account).

    I’ve recently had two great things happen – the first is my business has taken off incredibly (up to about $10,000 in royalties per month and growing) and myself and my partner have had a baby!

    So – I’ve been looking at setting up a Family Trust as we’ll soon be in the position of me making quite a substantial income and my partner making nil (so we can distribute the money between us and also to our daughter/future children).

    I have some queries about family trusts and intellectual property and also cash flow.

    1) The income-producing assets are copyrights to books. Can I put these into the trust? I believe I can but I’m having trouble finding info on copyrights specifically.

    2) As I am continually producing new assets (writing more books), how do they add to the trust over time? I write series books so I could produce, say, five books in six weeks. How do I add continually generating assets? (Last year I wrote 52 titles so I can’t be paying $$ to constantly update asset lists).

    3) Currently money lands in my business account, I put a percentage into another account for tax and then draw on the business account when I see fit (paying an illustrator for a cover, buying a new memory stick, paying myself money). When I have a trust how does that work in regard to cash flow and making payments? I’ve been trying to find info on this but I’m not sure how it works exactly. I need money to come in and for me to be able to take out, say, $1000 for myself and $1000 for my partner each week. Are there reporting requirements I need to adhere to? Does that money count as a distribution?

    We have an appointment with an accountant/tax planner soon but I wanted to get a bit of information from people operating businesses.

    cheers,
    Mat

    #1163461
    Peter – FS Administrator
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    Hi Mat,

    Welcome and thanks for joining Flying Solo! Congratulations on the success too.
    I think you’re making the right move seeing the accountant as well, but hopefully a few others with experience in this might jump in soon – a fair few people are taking advantage of the holidays and taking time offline!

    If you are game, feel free to add a post signature with a link to your website so we can learn more about your business :)

    Co-incidentally, Robert Gerrish just interviewed successful author Tony Parks on the topic of writing/business/creativity and you can have a listen to the podcast here: http://www.flyingsolo.com.au/coachingcouch (just need to be logged in).

    All the best,
    Peter

    #1163462
    victorng
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    Hi Mat,

    Good work on your books! One book a week is some effort.

    Financial / tax considerations will determine the best structure and asset ownership model for you, so your accountant should be able to help. But to answer a couple of your questions:

    1) Yes, you can assign the copyright in the books to the trustee. Or alternatively you can license the trustee to exploit the copyright but retain ownership yourself. Note that in order to be valid a copyright assignment must be in writing. Note also that the assignment of existing copyright will probably trigger a CGT event – as to what this actually means I can’t help but your accountant will be able to.

    2) The assignment document can deal with both existing and future copyright.

    Cheers,
    Victor

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