ABN & TFN - Family Trust & Corporate Trustee

Hi all,

I'm new here. I've been reading the forum for information about setting up my own family trust with company as trustee to do business. I'm just wondering whether some experts here can answer the following questions:

Essentially, this is what I want to setup:

ABC PTY LTD As Trustee For SURNAME FAMILY TRUST Trading As XYZ

I have done the following:
- Register ABC PTY LTD as a Proprietory Limited Company
- Create a discretionary trust deed with ABC PTY LTD as the only trustee and myself, wife and children as beneficiary.
- I have register business name XYZ with ABC PTY LTD as the corporation applicant.
- I have apply ABN & TFN for ABC PTY LTD
- I need to apply ABN & TFN for SURNAME FAMILY TRUST
- I need to register GST to trade using XYZ as a retail trading and possibly some property / shares investment in the future.

What I need know:
Q1. What is the procedure/requirements in creating bank account so that I can receive funds made payable to "XYZ"?

Q2. What is the relationship between XYZ and the FAMILY TRUST? Since the business name registration does not know anything with regards to the family trust.

Q3. Can ABC PTY LTD buy assets on its own right (without representating the trust, e.g buying shares / investment for the benefit for its shareholder but not for the family trust, but trading for trust?). I was informed by an accountant that because ABC PTY LTD is a trustee for SURNAME FAMILY TRUST, therefore, whatever it does, it will always does it on behalf of the trust. I think this statement is wrong, but if someone out that can clarify what is actually true.

Q4. When applying for ABN in ATO website, since I have to apply for 2 ABNs, in regards to Trading Name:

a. For Entity: ABC PTY LTD: Do I fill in XYZ as Trading Name or leave blank?
b. For Entity: Trustee for SURNAME Family Trust: Do I fill in XYZ as Trading Name or leave blank?

Q5. I intend to add a different corporation as a beneficiary in the future to allow distribution of tax to the another corporation, e.g. DEF PTY LTD which is owned by another family trust to limit tax threshold to 30% and allow distribution of income in the future when I no longer work full-time. Is this a correct way of doing this? OR can I create another Family Trust with ABC PTY LTD as a trustee and assign this as the beneficiary to save another corporation cost?

Thank you in advance for your help.

 

Some quick points
Q1 - Westpac require the final page (where it is signed by the trustee and appointor). The company should also have a page signed saying you can open a bank account. As its a business account it can be saved by a pro pack you have with the bank, so our monthly fee is $6.50.

Q3. What happens when you have ABC ATF Z Holding Trust and ABC ATF Z Trading Trust. Surely the corporate trustee can have more than one trust it looks after.

Q5. Best way might be getting another trust set up who owns the company. Corporate fees will be worthwhile if your close to retirement age (or even over 100k). However the question i thought about can ABC be the trustee (or will this cause a lack of independance amd therefore asset protection)? or should it really get its own seperate trustee?

 

Hi, I'm not an accountant, but the purpose of a trust is to protect assets. In Q3: why would you want to trade outside of it and not be protected? My accountant set up a company owned by ABC Pty Ltd atf XYZ Trust for trading purposes.

Q2: ABC Pty Ltd holds assets on behalf of the Trust, for the benefit of the beneficiaries.

Remember every entity you set up is a continuing cost - annual accounting and ASIC fees.

Buy or borrow a copy of "Learn About Family Trusts & Alternative Structures" by Nick Renton (WrightBooks 2005). It gave me a better understanding of what to ask my accountant!

 

Thank you. I borrowed the book from the local library and explained a lot. I highly recommended the book for people who is trying to understand the concept of family trust.

 

Q2 - there is no relationship as a trust doesn't exist in a legal sense. For practical purposes XYZ is simply the trading name of the trust. try substituting aka instead of t/a and you'll get what i mean.

Q3 - ABC can buy things in its own right, but I definitely recommend you don't do this. The whole idea of having a corporate trustee is so there are no assets that can be recovered, but you will be compromising this by having assets in the company's own name.

Q4 - are you sure you need an ABN and TFN for the company? I didn't think you did. Use the XYZ name for the trustee's application.

Q5 - ABC can act as corporate trustee for more than 1 trust, however you won't necessarily save tax this way, since the income still needs to be distributed to a beneficiary. If you want to save tax, and won't need the money in the business, or until you retire, your trust can make super contributions instead. Corporate beneficiary is also good if you want access to the money, just keep in mind Div7a/s109UB (or whatever its replacement is).

 

Bank account

Hi Folks,

I have set up a Family Trust, have a registered ABN and a Tax File number. I spoke to my bank who said tht I need two trustees to open an account, is this correct?
The other issue I have is I only want a basic account, ie without lots of fees and a check book. Can anyoine recommend none to me?

Thanks in advance.

63AJR

 

Bank account

Sim the issue is that I don't want a second Trustee and the bank seems to want two to create the account (they are confirming the requirement now).

I don't see the problem in only having one Trustee - maybe it;s a bank thing?

 

Ask the bank what they base this on as the Corporations Act requires only one trustee is needed as long as he is not the only beneficiary. Dont be intimidated by banks wanting their own 'regulations' fulfilled. Give it a go anyway. Speak to the manager not a teller.

 

The Corporations Act doesnt require 2 trustees as long as the sole trustee is not the only beneficiary. If this is our case, ask to speak to the manager to explain his reasoning. I would. Could be a bank thing but shouldnt be OK.

 

Are you talking SMSF?

There are millions of trusts with only one trustee. In fact it would be unusual to have two trustees where there is a company as trustee. Your bank is wrong on this one.

Try Bankwest for setting up fee free trust accounts.

 

ABN and new accountant

Hello,

I have set up a discretionary trust with corporate trustee.

I have set up a non trading company.

All suggested by my accountant. Who is starting to annoy me. He was really helpful (yes sucked me in I guess) at the start. But now he's fees and charges are over the top.


I have 2 questions.

1. Do I need an ABN for a non trading company?
2. Can anyone recommend an accountant in Perth, who I could deal with via email or phone. Who is upfront with his/her fees & charges. And is really helpful with investment properties and family trust funds.

Thank you.

 

Hi Sim,

No they don't need to be in Perth. Actually Sydney would be ok. Please let me know who you recommend.

Thanks.

 

Hi, I am new here. I have similar situation as the above.

- i have Registered ABC PTY LTD as a Proprietory Limited Company and created a discretionary trust deed with ABC PTY LTD as the only trustee and myself, husband and children as beneficiary.


Questions are:

1. I have both ABN and TFN for ABC Pty Ltd but I cancelled the ABN last year as it was not carrying on any business. Do I need to re-apply ABN for ABC PTY LTD as I am buying XYZ Cafe under the ABC Pty Ltd ATF Family Trust and start trading on 1/7/12?

2. I have not registered business name XYZ Cafe under ABC PTY LTD ATF Family Trust. How to create "AKA" instead of "T/A" XYZ Cafe?

3. Shall I use the ABN of the family trust for the invoices and cash receipts?

Your advice would be much appreciated.

 

One more question: Company trustee or Family Trust or Trading name will need to register for GST,PAYG and BAS?