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Working Capital for Family Discretionary Trust

Discussion in 'Introductions' started by Ganasan, 4th Apr, 2013.

  1. Ganasan

    Ganasan New Member

    Joined:
    2nd Apr, 2013
    Posts:
    1
    Location:
    Perth, WA
    Dear All,
    I recently registered a family discretionary trust for service business and my question is around the expenses and they are as follows:

    1. I as the trustee spent some money travelling on business trip using my credit card. This was due to the fact that I have yet to set up a bank account for the trust entity. How do I make this expenses the trust's expenses?

    2. The Trust will need some capital to pay for expenses, is a simple loan agreement between me and the trustee company suffcient? Can I stipulate interest payable to me?

    Thaks
    Gan
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    You probably could ask the trustee to reimburse you for the expenses incured.

    For asset protection reasons you should have a valid and binding loan agreement drawn up but first (You also said in 1 that you were the trustee, but in 2 there is a company as trustee??) consider the consequences if
    1. Trustee becomes insolvent,
    2. You become insolvent
    3. You die

    As for the interest think of the taxation consequences.