Family trust business structure

When choosing the best structure for your business, it’s important that you consider what might happen in the future.

If you want to build a business that you can pass down to other members of your family, then a family trust structure could provide you with an ideal tax-effective, long-term solution.

We believe that family trusts are extremely useful entities. Many people create them to manage assets and investments, but they often overlook the fact that a family business can be one of the most valuable assets they own.

This is where setting up a trust business structure can be highly beneficial, not only to the current business owner, but also the generations to come.

Utilising a family trust as a business structure can offer significant advantages. In terms of flexibility, trusts offer effective tax planning opportunities.

The trustee can use their own discretion to distribute income to beneficiaries with the lowest marginal tax rates.

This enables them to reduce the trust’s tax rate. Another common situation is if one beneficiary has incurred capital losses, the trust can allocate any capital gains to that individual.

There is also additional asset protection within the trust environment, as no individual family member legally owns trust assets. Assets are the responsibility of the trustee.

This means that the trust’s assets are protected from a beneficiary’s third party creditors.

Setting up a family trust business structure is a complex undertaking. There are many considerations to take into account, and we recommend seeking professional advice to make sure that it will suit your needs.

Here at North Advisory, our team has extensive experience working with family trusts, and we are here to help you through the process.

If you’d like to find out more or speak to one of our business specialists, please contact us today.