Family Trust vs. Company - Aussie Stock Forums

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  1. #1

    Default Family Trust vs. Company

    Hey guys, i want to know the advantages and disadvantages of starting a family trust/company to invest in property and shares, or is just better to do neither?
    thx in advance

  2. #2
    Pigs In Space GreatPig's Avatar
    Join Date
    Jul 2004

    Default Re: Family Trust VS Company

    If you intend to invest, as opposed to operate a share trading business (or property development business), then a company structure should generally be avoided as they don't get the 50% CGT discount for shares or property held longer than 12 months.

    A trust is a trade-off between operating cost and the tax and asset protection benefits it provides. Whether or not one is worthwhile would depend on things like your personal income level, the number of beneficiaries you might have and their income levels, the amount of funds you intend to invest, the likelihood of your being sued for some reason (eg. because you're a director of an active business), and your investment goals.

    Property is higher risk than shares, in terms of being sued for some reason, but that alone may still not make it worthwhile to form a trust.

    You really need to discuss this with a good trust-savvy accountant.


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