Normal
The above are two good reasons why it might (in some situations) be good to just forget about the trust and just set up your trading vehicle as the incorporated company with the shareholders being "beneficiaries". Unlike trusts a incorporated company does not need to distribute all of its income each year but when it does it simply pays shareholders a dividend--which can be franked or unfranked. The incorporated company will of course pay the corporate tax rate on its profit (unlike a trust) but it does provide the franking/unfranking advantages. An incorporated company vehicle is not in Labor's sights so provides a level of certainty from Labor's desire to screw things up.People should not be fooled into thinking assets held within a discretionary trust are untouchable by greedy third parties. The courts have and will readily force the handover of assets in a trust to interested third parties--for example, divorces and bankruptcies. I think it is important to weigh up the pro and cons of using an incorporated company alone verse the corporate trustee and discretionary trust structures--the latter can add unnecessary complexity without any real benefits.
The above are two good reasons why it might (in some situations) be good to just forget about the trust and just set up your trading vehicle as the incorporated company with the shareholders being "beneficiaries". Unlike trusts a incorporated company does not need to distribute all of its income each year but when it does it simply pays shareholders a dividend--which can be franked or unfranked. The incorporated company will of course pay the corporate tax rate on its profit (unlike a trust) but it does provide the franking/unfranking advantages. An incorporated company vehicle is not in Labor's sights so provides a level of certainty from Labor's desire to screw things up.
People should not be fooled into thinking assets held within a discretionary trust are untouchable by greedy third parties. The courts have and will readily force the handover of assets in a trust to interested third parties--for example, divorces and bankruptcies.
I think it is important to weigh up the pro and cons of using an incorporated company alone verse the corporate trustee and discretionary trust structures--the latter can add unnecessary complexity without any real benefits.
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