- Business Taxes
- Business Terms and Conditions
- Company Registration
- Discretionary Trusts
- Shareholders Agreement
5 things you need to know about Discretionary Trusts
- Many business people, and individuals, set up discretionary trusts in order to protect assets and increase their tax efficiency. A discretionary trust gives discretion over what income is paid to what beneficiary. A discretionary trust can be an effective structure for achieving both of these goals.
- Setting up a discretionary trust doesn’t need to be overly complicated. First you will need to select a trustee, then you’ll to have a trust deed drafted, the trust will need to be settled, the trustee(s) need to sign the deed, and then stamp duty must be paid (if applicable).
- Stamp duty is only payable in certain states; your lawyer or accountant will be able to advise you on whether stamp duty is payable in your circumstances.
- Once you’ve set up your trust you will have ongoing taxation and regulatory obligations. Make sure you work with a good accountant and lawyer to ensure you’re keeping up to date with those obligations.
- Finally, make sure you only set up a discretionary trust if it makes sense for your particular business. It may not make sense for you to set up a discretionary trust – seek advice before making any decisions.
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