Hi I setup a trust for investment purposes, and so far in this GFC all it's done is dwindle my cash to a teeny tiny speck. I'd like to take all money out of the trust in my personal name again. Will this have any tax implications? I'd also like to "freeze" my trust so I can use it in a few years time. Does anyone know how this is arranged? Thx MCM
Taking money out of the trust depends on how you put it in. Was it a gift to the trust, a loan from you to the trust, or some other mechanism? Generally taking money out of a trust will have tax implications - but there are exceptions (such as paying back a loan, etc). Depends on how things were set up.
Can you elaborate on the tax implications if it was gifted to the trust? Note: I'm not the thread starter
You really need professional advice about your deed and the best way to go about your plans. Cheers, Rob
I believe that if you gift money to a trust, you cease to have any "ownership" of that money. If it subsequently gets distributed back to you in some form, you will pay tax on that distribution. It would be unusual for this to happen, but it could conceivably occur. I'm not an accountant and I've never actually had to deal with this myself - so I'm not completely sure how it works. An alternative is to loan the money to the trust - but that has asset protection implications ... the loan is an asset you own and if you get sued, your creditors could make a claim against the trust to receive back the money it owes you.