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- What is a trust?
- Negative Gearing with a Trust
- Why should I use a trust?
- Hybrid discretionary trusts
- Testamentary/will trusts
- How to set up a Unit Trust
- How to set up a superfund
- How to set up a Discretionary Trust
- How to negative gear with a trust
- How to structure a rental property
- How to Avoid Poisoning Property
- The trustee of a trust is personally liable for trust debts if the debts exceed the trust assets.
- A company should be used as the trustee of a trust if the trust will be conducting any type of business.
- Discretionary trusts offer the most amount of asset protection & flexibility for taxation.
- A unit trust/discretionary trust combination should be used when investing in residential or commercial property.
Trusts are by far the greatest vehicle for investment assets and running a business. Many people avoid them because they believe they are complicated and hard to manage. Nothing could be further from the truth. The benefits they can be achieved by structuring assets through a trust are significant and before deciding what structure to use have a look at the benefits of a trust. They include asset protection, flexible distributions, tax advantages and succession planning.
Overview
A trust is a relationship that exists between two parties, the trustee(s) and the beneficiaries.
Trusts offer the most flexibility as well as asset protection. There are many variations however, the basic, are unit and discretionary trusts.
Superannuation Funds
Superannuation funds are still a very liable option. Unit trusts are a popular means of investing super monies as they are not subject to the same guidelines as super funds.
Unit Trusts
Unit trusts provide less flexibility as far as distributions are concerned however, offer flexibility as far as establishing certain entitlements especially where there are unrelated parties. Very popular as a combined structure with superannuation funds, there still needs to be care taken, as undercapitalised unit trusts have the same problem when returning non-assessable capital as companies.
Discretionary trusts
With the ability to distribute at the discretion of the trustee, assets protected against creditors and ability to refinance in certain cases, discretionary trusts should always be considered as an investment vehicle. Advantages of investing through a discretionary trust include:
- Income can be distributed between beneficiaries at the trustee's discretion.
- Capital gains can be distributed between beneficiaries at the trustee's discretion.
- The assets of the trust are protected from litigation against beneficiaries.
- New beneficiaries can be added at ease and usually without any capital gains tax liability.
- The return of non-assessable capital problems associated with companies and unit trusts do not apply to discretionary trusts.