Corporate Trustee - Shareholder Structure

[Terry_w]

If you each own 50% of the shares then the chairperson of the shareholder meeting would probably have the casting vote. If you were bankrupted this could be the trustee in bankruptcy. If you are incapacitated it could be your attorney (which may be your wife). If you are dead it may be your LPR (which may be your wife, or a professional).

Consider the same for your wife - what if she leaves the shares to someone else in her will or she appoints X as her LPR.

Principal may be the same as Appointor. So if you die, bankrupt, or incap she would take over. What happens if you are both in an accident and die together or are in comas? Uncle harry may milk the trust?? Courts can appoint trustees or it could be your LPR.

Also what if you die and your wife remarries....

 

[Terry_w]

Thanks Terry,

In my case I believe they could be "Identical"/Cloned Trusts, as from my understanding, as I am the trustee and the beneficiaries are the same.

What I am not certain about is the "(b) the interests of the beneficiaries of 2 or more of the trusts are, when the taxpayer's liability for land tax arises, the same."

Is this saying, if the interests of beneficiaries are ever so slightly different in the two trusts (like 49%-51% and 45%-55%) does this make them "not identical"??

If this is the case, then I can avoid all this garbage. Still not sure how I'd convince the OSR they "different" though.

This is why I am going down the corporate trustee path, in that it will prevent these issues occurring.

Cheers,

You should get some legal advice on this. Varying the interests may result in the land holdings of the trusts being assessed separately. But will varying result in a resettlement - stamp duty, CGT (maybe not).

This is all going to be costly and complex and just shows why you should get proper advice when setting up. It will be cheaper in the long run and much simpler.

 

[WilliamB]

Mate, the sad/frustrating thing is, I thought I was getting appropriate advice. I had nothing to indicate to me this accountant wasn't all over this, plus I didn't understand the gravity of the legal side, as for me initially it was all about tax minimisation. Also, admittedly, I move quickly generally so any mess I have caused I really have no-one to blame but me.

I guess you don't know what you don't know when you begin, and simply relying on an accountant to assist with this stuff is just not enough.

Worst case scenario is a few extra k land tax bill, but in the long term will be looked back at as a valuable lesson.

Cheers,

 

[Terry_w]

Yes, sometimes you know you don't know something, but other times you have no idea of what you don't know.

At least with the forums you can post something and get a broad range of replies.

 

[WilliamB]

Exactly right Terry. Wish I had come across this joint sooner

Mate yourself, along with a couple of others here, including Paul and some of the other brokers, have been exceptional help.

Thanks,