Selling Founders Shares to Trust

Discussion in 'Investment Strategy' started by macie, 21st Oct, 2011.

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  1. macie

    macie New Member

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    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. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    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

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    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. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    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.