Home – New Forums Money matters Utilising my Family Trust

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  • #982595
    sonoflaw
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    Hi,

    I was hoping to get some assistance with and understanding of how I can use my Family Trust.

    I have some trailing commission that I was thinking of running through my Family Trust. The trust was originally in place to hold the shares of a company I owned and disbursement of income. It has pretty much been dormant for some time.

    Effectively I want a mechanism to receive the commissions then disburse the funds. Hoping someone may be able to explain the pros and cons of this approach over any other.

    Thanks.

    #1137641
    PRO
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    sonoflaw, post: 156961 wrote:
    Hi,

    I was hoping to get some assistance with and understanding of how I can use my Family Trust.

    I have some trailing commission that I was thinking of running through my Family Trust. The trust was originally in place to hold the shares of a company I owned and disbursement of income. It has pretty much been dormant for some time.

    Effectively I want a mechanism to receive the commissions then disburse the funds. Hoping someone may be able to explain the pros and cons of this approach over any other.

    Thanks.

    Have a read up on personal services income and if what you are doing does not get classed as PSI then you should be able to utilise the trust. You would need to get specific advice and suggest you see an accountant.

    #1137642
    Jodie McLeod
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    Hi Sonoflaw,

    Welcome to the Flying Solo forums! I’m sure the helpful accountants that hang around these traps will be able to help point you in the right direction.

    In the meantime, please feel free to introduce yourself over here and let us know a little more about your business. Also, you can flesh out your signature by clicking “control panel” in the grey bar above.

    See you around!

    jodie

    #1137643
    AdvanTax Group
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    Hi there!

    The net income of the trust (so income less all of the expenses – ie, office expenses, bank fees, accounting fees, etc) is distributed to the beneficiaries of the trust and is then assessable to them at their marginal rates of tax. Feel free to ask any further questions, I enjoy talking trusts.

    Alysha

    #1137644
    James Millar
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    sonoflaw, post: 156961 wrote:
    Hi,

    I was hoping to get some assistance with and understanding of how I can use my Family Trust.

    I have some trailing commission that I was thinking of running through my Family Trust. The trust was originally in place to hold the shares of a company I owned and disbursement of income. It has pretty much been dormant for some time.

    Effectively I want a mechanism to receive the commissions then disburse the funds. Hoping someone may be able to explain the pros and cons of this approach over any other.

    Thanks.

    The problem is that if you have an existing trailing income stream, transferring it to a trust would probably trigger a capital gains tax event. The “right” to an income stream is a CGT asset.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1137645
    MH08
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    What is the trust structure?

    If its discretionary, you can pay who ever you want and they would pay PSI at their own MTR level. Unless you have the trust pay tax, but this will only be beneficial if you have a “company” as the trustee.

    Cheers,

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