Practical Book-keeping for Discretionary Trusts

Hi, can anyone shed light on the book-keeping side of a DT with a corporate trustee after the set up stage?

I am planning to set up at DT to invest in shares, buy and hold long term. For simplicity say I gift to the DT to purchase shares 2 times a year and never sell.

The company (trustee) will do no business, have myself and partner as director and shareholder.

1. What do DT records ‘look’ like (eg. Is it a hard copy journal or diary type entry, excel spreadsheet, online software, Manila folder with separate papers?)
2. What sort of things do you record? I am imagining a transaction statement incomings, outgoings with diary comments (intentions)
3. If someone makes a gift to the DT, is there a typical Deed of Gift memo or “form” with particular wording required to be an eligible gift
4. Does the trustee handle/ file the Deed of Gift form themselves?
5. What paperwork is needed for Tax returns
6. Does the Trustee Company need to file a tax return or do any paperwork if it does no business at all

Any help is appreciated. Thank you,
Jello

P.s I found these 2 articles to have very useful information for the set up stage

Guide to completing a Family Discretionary Trust Deed

Creating a Company for your Family Trust

 

1. the trustee should follow what the deed requires
2. all decisions a trustee makes, both financial and non-financial
3. a trust is not an entity so the gift will need to be given to the trustee and this should ideally be recorded in a deed
4. not sure what you mean
5. download the trust tax return instructions. also consider the financial statements of the trust
6. depends if it has a TFN then it should file a nil return.

 

Terry, thanks for your reply. It is much appreciated.

With item 4 I was wondering if anyone else would be involved or need to be made aware when someone gifts to the trustee. Or if it is solely carried out between the gift giver and trustee (no other parties involved).

I’m meeting with the Solicitor soon so hopefully they will ensure the deed covers the relevant requirements.

Jello

 

You have to consider the consequences of the gift especially in relation to
bankruptcy
incapacity
insolvency
death

An interest free loan is often better.