Trading or holding shares under Trust? - Aussie Stock Forums

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  1. #1

    Question Trading or holding shares under Trust?

    Hi all,

    I'm new to shares, spent the last few years in residential investment properties. Alot of property investors hold their investment property in trusts (ie. Hybrid discretionary trust).

    I'm wondering is it advisable to also to trade or hold shares under a trust structure? Is the added paper work and admin costs associated with maintaining a trust worth the benefits it provides?

    Fu Bo

  2. #2

    Default Re: Trading or holding share under Trust

    Hey Fubo

    For most individuals there is no benefit for holding investment assets in a trust (except if it is a super fund).

    A trust is used primarily for asset protection purposes, such as keeping your assets out of the hands of litigators.

    There are no tax benefits, just as you said extra admin costs.

    As an ordinary shareholder, you cannot get sued by a customer of the company you buy and hold. With a direct investment property it is different - you are legally liable and your assets are open slather.

    It also depends on your individual circumstances of course, the more complex your finances get, the more likely it would be you would need one.


    A famous entertainer once said that ninety percent of success is showing up on time. Sorry I'm four hours late!!!

  3. #3

    Default Re: Trading or holding shares under Trust?

    With respect to share trading, the benefit of using a trust structure lies not in the protection offered but in the flexibility when it comes to profit distribution, capital gains and franking credit allocation.

    Note there a number of trust structures, most common is the discretionary trust.
    Most family trusts are set up as a discretionary trust.

    Basically it's up to the trustee of the trust as to how and to whom profits are allocated. Tax is then paid by the Individual or Entity that received the distribution, at their given tax rate.

    If used correctly genuine tax savings can be achieved.

    Bearing in mind , this kind of structure is not for everyone,
    the pros and cons must be evaluated on a case by case basis.

    You should really consult an Accountant/ Registered tax agent, to see if a trust structure can benefit you.

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