Tax Savings Strategy 205 | Company Shares Owned by Family Trust
This strategy involves having a company’s ordinary shares owned by a family trust structure (instead of the individual directors). This applies irrespective of whether the company operates a business or holds investments. The advantages of this strategy include:
- Provides asset protection – If the directors personally go bankrupt then the company is protected as the shares in the company are owned by the family trust.
- Enables the company to pay fully franked dividends to the family trust which can then be streamed to beneficiaries in the most tax effective manner. Beneficiaries in low tax brackets will have some (or all) the dividends franking credits refunded to them.
- Ability to distribute fully franked dividend income to adult children (aged over 18 years) who are either studying or working part-time and are in low tax brackets. If $18,200 is distributed to a child studying fulltime then they benefit from having the franking credits refunded.
Similar posts you may like
- Tax Savings Strategy 224 | Employee Remuneration Trusts
An Employee Remuneration Trust (ERT) arrangement involves a trust being established to facilitate the provision of payments and/or other benefits to employees of an Read more
- Tax deductible holiday working spaces
Holiday working spaces are work spaces in holiday destinations. The working spaces can be located literally anywhere in the world; including your favourite beach, Read more
- Tax Planning Strategy 188 | Child Maintenance Trust
Tax planning strategy 188 A Child Maintenance Trust (CMT) is a special type of trust set up and established with income earning assets (typically Read more
- Tax Savings Strategy 216 – Managed Investment Trusts Investing in Affordable Housing
From 1st July 2017, managed investment trusts (MITs) are able to invest in affordable housing, allowing investors to receive a 60% CGT discount on Read more
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2