Distributing Funds to Children

Thats great

Just surprised it didn't come up earlier, thats all.

 

I think in part communication breakdown.

My daughters don't get him to do their tax returns? perhaps this needs to change.

Also, I am relatively new to trusts I am still learning along the way so I don't know what I don't know, which is not much..hehe

Agree with you though.

 

I'd be interested to know how.

 

Some trustees happen to find resolutions in their bottom drawer

 

A resolution can be oral, but ATO says must be reduced to writing as soon as practical.

 

If your children have skills that could be employable in your business you could pay them as employees of your business. This could get a whole lot more to them at an act tax rate that is quite low I.e $17k on $80k of income.

What are they studying?

 

Has to be a bit of communication between yourself & your accountant around May/June so they can prepare a resolution that'll be effective for you. Strange that it would have been overlooked.

Good to hear the situation could be resolved - amazing how these documents turn up when you search for them!

 

This is the key. In our family (couple with adult children and several trusts) we have a yearly routine that consists of doing all our taxes at the same time with the same accountant. This is done around Jan-Feb at which time we have a good idea of next year’s financials and the strategies that will be required.

The accountant works out the best combination for us collectively and we just sign on the dotted line.

 

Can you share a bit on these strategies? That is if you don't mind sharing.
I have a trust set up, but my kids are still minors. It will be good to know so I can plan ahead. I'm one of those paranoid people that like to plan waaaay ahead of time lol.

 

Basically distributions to the most efficient structures – best to ask your accountant, this is common knowledge for them.

The key however is to have discussions with the accountant well ahead so that the resolutions are ready to go before the June deadline. In our case we have only one meeting with the accountant every year, around Jan-Feb, when we sign off our tax returns for the past year and draft the resolutions for the following year. When June comes it’s just a matter of confirmation.

 

@truong
Thanks for that. First meeting with my accountant, I had 0 knowledge. I think most of his explanations went over me n the husband's head. It is only this past year that I'm sort of understanding bits n pieces.
Have a meeting planned this July with him, hopefully I can 'get' his explanations this time round. This topic of distribution will be one of the things I will surely bring up.
Will keep in mind to schedule future meetings around Feb.

 

id recommend seeing him before, not much tax planning can be done after the financial year is over. july is kind of pointless for previous financial year, no different to august or whatever.

 

Don't have much choice at the moment as I work overseas. I will keep that in mind for the next meetings though.
My accountant is also a keen investor, as well as being quite a lot older, so the chat will be quite informative for me.

 

Phone conference will do

 

I was always suprised at how often clients would either
a) consider their tax position in July - then wonder why the accountant cant resolve their issues.
b) try to meet with the accounant on the 28th June, then come to the bank because they need to tranfer/borrow/change/open (whatever) before 30June.

30th June was always a nightmare for banks, accountants, FA's etc. Probably same for brokers as well.

Blacky

 

This tax year we have started to become 'better' clients for our poor accountant. We now do interim financials at Dec 30th (so half way through year) to begin the plan of how best to manage the second half of the tax year and distributions etc.
Our PM simply runs his EOFY for 6mths instead of 12 to cover that side of the business and we meet with accountant to catch him up on what we have been doing as well.
Proactive rather than reactive is always best - I feel like a real grown up some days