Trusts are a fairly common structure that you can use to operate a business, own assets and distribute income. Although trusts can serve similar purposes as companies, they are very different structures and are therefore regulated differently. This article looks at how Australian company numbers (ACN)s, Australian business numbers (ABN)s and tax file numbers (TFNs) relate to a trust.

Does a Trust have an Australian Company Number (ACN)?

An ACN is a unique nine digit number that identifies an Australian company, much like a licence plate identifies a car. A company’s ACN is always used alongside a company’s name in any legal documents in order to clearly identify the company. 

For example, the documents could stateEndeavour Sailing Pty Ltd ACN 123 456 789’.

Unlike an ABN and TFN, you do not have to register an ACN for your company. Instead, an ACN is automatically assigned to your company when it is incorporated with the Australian Securities & Investments Commission (ASIC). 

Trusts are an entirely different type of business structure to a company and therefore cannot have an ACN. However, an ACN may still be relevant to a trust if it has a corporate trustee. A corporate trustee is where you incorporate a company to act as the trustee of your trust, instead of an individual person. 

Example:

Philip Burke inherits a large sum of money from his grandmother and plans to use the money to buy a number of investment properties. His accountant advises him to set up a discretionary trust to purchase the properties, so he can distribute the rental income to different family members. His accountant also recommends having a corporate trustee.

Philip’s accountant incorporates Burke Investments Pty Ltd with ASIC. ASIC automatically assigns the company an ACN of 123 456 789. Philip’s lawyer then sets up The Burke Family Trust for him and appoints Burke Investments Pty Ltd as the trustee.

When signing the contracts to purchase the properties, the purchaser will be identified as follows:

‘Burke Investments Pty Ltd ACN 123 456 789 ATF The Burke Family Trust’

Does a Trust have an Australian Business Number (ABN)?

Your trust only needs an ABN if you are using it to operate a business, in the same way that a company only requires an ABN for the same purpose. However, rather than the trust itself having the ABN, the ABN is actually attached to the trustee of the trust in their capacity as trustee.

Example: 

Andrew Ellis operates a jewellery business in Terrigal called Central Coast Carats as a sole trader, with a registered ABN of 98 765 432 101 that he uses when invoicing clients. Separate from his jewellery business, Andrew decides to start a new lawn mowing business called Terrigal Lawns, which after consulting his accountant he plans to operate through a trust. Andrew gets his lawyers to set up a trust called The Ellis Family Trust and appoints himself as trustee for the trust.

Because the trust will be operating a business, it will require an ABN. However, it is not the trust itself that has the ABN but the trustee, which in this case is Andrew. Andrew does not use his existing ABN from his jewellery business, as this is for him personally. Instead, he registers a new ABN of 12 345 678 910 for himself as trustee for the trust.

Whenever Andrew signs any legal documents for the lawn mowing business, the business will be identified as follows:

‘Andrew Ellis ATF The Ellis Family Trust t/as Terrigal Lawns ABN 12 345 678 910’

Whenever Andrew signs any legal documents for his jewellery business, the business will be identified as follows

‘Andrew Ellis t/as Central Coast Carats ABN 98 765 432 101’

Does a Trust have a Tax File Number (TFN)?

A trust should have its own TFN, which like an ABN is registered by the trustee of the trust in their capacity as trustee. If an individual is a trustee of a trust, they do not use their own personal TFN as trustee. Instead, they use the separate TFN that was registered for them as trustee for the trust. If the trustee changes to another person in the future, that person would continue to use the same TFN for the trust.

If you have a corporate trustee for a trust, that company should register a TFN for the trust in its capacity as trustee. The company then uses that TFN when submitting any tax returns for the trust or having any other tax dealings on behalf of the trust. Again, if the trustee changes to another company in the future, that new company will continue using the same TFN for the trust.

Example:

Sarah Wilde is employed as a nurse and receives pay slips from her employer that cite her own personal TFN. Together with her husband James, Sarah decides to set up a family trust with which to own their share portfolio and distribute dividend income between them and their three children. Sarah is appointed as trustee of the trust.

Sarah registers a new TFN in her capacity as trustee for The Wilde Family Trust, and cites this TFN when lodging income tax returns for the trust. 

10 years later, Sarah and James decide to appoint one of their children, Thomas, to replace Sarah as trustee for the trust. Thomas continues to use the same TFN that Sarah registered for the trust when lodging income tax returns for the trust.

Key Takeaways

Trusts can be used to run a business, own assets and distribute income. A trust does not have an ACN. If it has a corporate trustee, however, the corporate trustee will have its own ACN. A trust only needs an ABN if it is conducting business. If it does, then the trustee registers an ABN in their capacity as trustee. A trust should have its own TFN. The trustee registers the TFN in their capacity as trustee. If you have questions about trusts, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

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