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Selling Founders Shares to Trust

Discussion in 'General Investing Discussion' started by macie, 21st Oct, 2011.

  1. macie

    macie New Member

    Joined:
    21st Oct, 2011
    Posts:
    4
    Location:
    bendigo, vic
    Hi All,

    I currently own a company and some property and I'm looking to set up a trust with a corporate trustee to start a new business under. I need to build up some trust assets and income to be able to start investing and I'm considering selling my current company to the trust.

    Is the only way to do this to sell my founders shares to the corporate trustee ATF my trust for current market value, therefore I would incur capital gains? (I've owned the company since 2009 if that helps).

    Macie
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    You could probably transfer the shares in the company to the trust. There may be stamp duty involved and CGT - but this could be reduced by transferring a few shares each year.
     
  3. macie

    macie New Member

    Joined:
    21st Oct, 2011
    Posts:
    4
    Location:
    bendigo, vic
    Is it just the most recent Balance sheet that determines the share selling price? Can I gift shares to the trust and if so, what value would they be determined to be?
     
  4. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    There are provision in the duties act and tax acts to make duty and cgt assessed at market value. however, it may be difficult to assess market value of a private company. depending on the state your company is set up in there may be no stamp duty too. i think Vic doesn't have stamp duty on share transfers.