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confusion options cfd & fx trading and company/trusts

Discussion in 'Accounting, Tax & Legal' started by aceyuko, 10th Jan, 2011.

  1. aceyuko

    aceyuko Member

    Joined:
    10th Jan, 2011
    Posts:
    5
    Location:
    Brissy
    Hi all

    Any help is greatly appreciated.

    I am fairly new to the world of the financial markets but have been trading in my personal name for about a year with reasonable success. Now that my income has grown, I need to reassess my structure and I am looking at a PTY/LTD company as trustee for a disgretionary/family trust. I understand most of the benefits and the pitfalls.

    I am told that as I trade CFDs Option and FX the US markets I need the trust to be written in a particular way in order for it to work effectively.

    Is this correct ar are they a standard document?

    Also the pricing varies considerably from $1500 ish to $3200 ish. Brings me to the dilema of who to use as my accountant.

    Am I really getting more for my money with a more expensive setup fee?

    Thanks in advance
     
  2. Superman

    Superman Well-Known Member

    Joined:
    6th Nov, 2007
    Posts:
    343
    Location:
    Gold Coast, QLD
    Hi aceyuko,

    Please refer to my other post response in regards to a referral to a Brisbane accountant.

    When it comes to trust deeds - for any kind of trust or SMSF, then cheap is not the best. Cheap is cheap and it is cheap for a reason!

    That said, there is no need to be paying top dollar for a deed either. There is no need for a 'special' family / discretionary trust deed simply because you are trading options. Who told you that?

    It is good to see you are going to use a corporate trustee.

    I hope you are sure that by using a trust it will save you tax (i.e. you can split the income to other people / family who are on a lower marginal tax rate).

    As an accountant I have been involved with a number of clients who have been trading CFDs and FX successfully. Initially I have always recommended they trade in their own name, and once they can prove that they are consistently making money, then we look at a more appropriate structure that will save them tax.

    I have seen some people be sold into a structure before they actually make any money from trading - which seems a waste.

    To answer your question of "am I getting more for my money" depends on whether any other service or advice is provided with the structure. The lower price might simply be for the documentation / company with no advice.

    Also, I can refer you to another accountant in Eight Mile Plains on the south side if that is better for you? If so send me a private message.

    Hope this answers your question.

    SM
     
  3. aceyuko

    aceyuko Member

    Joined:
    10th Jan, 2011
    Posts:
    5
    Location:
    Brissy
    Thanks for the tips Superman
    the special trust refered to it being written to include the international markets and what i am trading.
     
  4. Hillview

    Hillview Member

    Joined:
    1st Nov, 2010
    Posts:
    9
    Location:
    Perth, WA
    CFD's and trusts

    Aceyuko, first of all well done for making good money from cfd's and fx. Definately not easily done.

    Trusts definately a good way to go when your dealing alot of income. Remember FX and CFD's are extremely risky, and so now that you have made the money, protect it and dont bet to big, in my opionion. Also if you do happen to reverse your good fortune (playing the devils advocate) then trust becomes not as fantastic, as the losses are likely to be trapped.

    That said, a fairly standard trust would enable you to trade CFD's and FX and distribute. Just keep in contact with your accountant and upgrade the trust if anything major occurs.