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Benefits of having a Discretionary Trust as sole Share Holder of Comany

Discussion in 'General Investing Discussion' started by scooty090, 3rd Apr, 2011.

  1. scooty090

    scooty090 New Member

    3rd Apr, 2011
    Sydney NSW
    I am currently in the process of establishing a new private company. I currently have a Discretionary Trust.

    My main reasons for having all shares of the company in the name of my discretionary trust were for the following:
    Tax Benefits

    Although I do have a brief idea of the tax benefits of a trust, can anyone break down the actual benefits of having the shares in my trust rather than my own name?

    Any advice would be greatly appreciated.
  2. Tim Somerville

    Tim Somerville Member

    10th Jun, 2007
    North Sydney, NSW
    The reason for having shares held in a trust is tax. It enables you to split the dividend income between the members of your family, depending on which members are in the lowest tax brackets. It also allows streaming on different types of income and even of franking credits, so long as the trust deed is drafted so as to allow this. Eg, if you sell the shares and make a capital gain, you may have a family member who has had capital losses. By distributing the gain to that beneficiary, the losses are set off against the gains.
  3. Terryw

    Terryw Well-Known Member

    9th Jun, 2006
    There are also asset protection benefits. Assets held in a discretionary trust do not generally form part of your personal estate.

    This also means control is easier to transfer in the event of death. Trust assets do not come under your will.

    And privacy as you mentioned. The name of the trustee will be one all share certificates and ASIC registers etc.