Hi All,
As the title, I don't know whether it's legal and possible for:
A family trust owns all shares of a company, also the company is a beneficiary of the trust
As a family trust, you need to distribute all taxable income to beneficiaries otherwise the trust will be taxed on the top tax rate.
If the beneficiary is me only, when the taxable income is over $37,000, I need to pay 34%(32.5%+1.5% medicare) income tax...
To avoid paying too much tax, most accountant will suggest you put a company as beneficiary, so I registered a company A as beneficiary as company pay 30% tax.
To get the money out from I company, the only way is dividend(any other method rather director fee?), however, only shareholders can receive the dividend, if you family members are not shareholder, you can not give them dividend...of course you can transfer some share to them but maybe trigger stamp duty(nsw) and CGT
I am thinking to let the family trust owns all shares of company A.
Once the dividend was paid to the family trust, you can distribute the dividend(with franking credit) to any of your family members...
Is this structure legal? or any advices regarding this structure?
All comments welcome, thank you
As the title, I don't know whether it's legal and possible for:
A family trust owns all shares of a company, also the company is a beneficiary of the trust
As a family trust, you need to distribute all taxable income to beneficiaries otherwise the trust will be taxed on the top tax rate.
If the beneficiary is me only, when the taxable income is over $37,000, I need to pay 34%(32.5%+1.5% medicare) income tax...
To avoid paying too much tax, most accountant will suggest you put a company as beneficiary, so I registered a company A as beneficiary as company pay 30% tax.
To get the money out from I company, the only way is dividend(any other method rather director fee?), however, only shareholders can receive the dividend, if you family members are not shareholder, you can not give them dividend...of course you can transfer some share to them but maybe trigger stamp duty(nsw) and CGT
I am thinking to let the family trust owns all shares of company A.
Once the dividend was paid to the family trust, you can distribute the dividend(with franking credit) to any of your family members...
Is this structure legal? or any advices regarding this structure?
All comments welcome, thank you