Expected cost for Trust Tax return

Wondering if anyone can give me there thoughts or based on experiences how much you would expect to pay for a tax return and financial statement for a family trust. I understand there are many variables but I will give some details below on what sort of activity it conducts and would be interested in anyone's thoughts on even a ballpark figure of what they believe is fair fees.

Discretionary family trust with a corporate trustee.
Assets / activity: Investment income from 1 resi property. A share portfolio of a few individual shares and rest in managed / index funds. All on a BT platform so you get a annual tax statement that outlines all the figures for tax purposes. 15-20 holdings in different property trusts. Again each comes with an individual tax statement outlining the type of income received.

So there is a few different income streams flowing in but all come with detailed statements that should be fairly straight forward to extract all the figures from to prepare the return.

Interested to hear what others think something like this should cost for the tax return and the company financial statement even if its an estimate of between $x and $x per year.

Cheers

 

I pay $700 + GST. Discretionary trust with corporate trustee and consists mostly of share portfolio. Includes financial statements as well as tax advise during course of the year.

Accountant does other tax return work for me as well.

Cheers
Oracle

 

does the trust have any loans to associated entities ? eg a loan from a company ? an unpaid present entitlement to a company ?

 

Good questions.

So we have recorded there is a loan from us personally to the trust as the investment capital. And there is also a second loan from a related entity to the trustee / trust also for investment purpose. The second loan is a written loan with terms to ensure div 7a compliance.
No UPE recorded or should need to be recorded in the future.

 

Wow that's a great deal. Obviously mine having the 1 resi plus a number of different property trust holdings would be somewhat more work. But not sure how much more as my accountant of many many years now is charging me significantly more than you have mentioned. I feel like as my portfolio balance grows my accounting fees seem to be growing with it.

 

PM me if you wish contact details and then you can contact him directly to see what quote he gives you.

I am happy with the service and quality of work.

Cheers
Oracle

 

Thank you @oracle . Will do a little more homework before making a decision. Its just a little disappointing as I have been utilising his service as my personal and business accountant for over 10 years now. But over the years I have had to question the increases in fees a number of times.
After so many years working together our relationship has become a little more personal than just professional and he has been very helpful over that time. I have lost count of the amount of personal and business clients I have sent his way over the years. But now I feel like I am paying over and above for that relationship and am starting to question it.

 

20 odd managed funds will mean a range of issues. ETFs and Managed Trusts issue a tax statement and so unlike divs its like its accrual based not cash based. Property fairly easy. The annual tax stmt also will have costbase adjustments (up and down) etc. Then tax credits etc for pass through to beneficiaries. This is where a FTE (Family Trust Election) comes in and is critical. And also advice re distributions and resolutions and so on. How the trust accesses it sources of funds etc may also impact issues such as Div 7A.

What seems simple wont actually be with so many investments eg The CGT, Trust income and non-resident income becomes messy. Each category of trust income may be important for streaming and final taxable income. eg Net Rental loss may be $1 less than investment income and mean the trust CAN distribute a loss (people tell me a trust cant but thats not correct) . Are all beneficiaries resident ? Any other related entities ?

I would probably not recommend a DT own property AND shares. There are merits to maintaining these in different trusts sometimes. There can be duty and CGT impacts in some cases. Does the present accountant also act as asic agent for the corp trustee. A small extra annual cost but very necessary when changes are needed. Others DIY and avoid that charge.

We have a number of these trusts where we also maintain CGT records and tax elements etc eg Unrealised CGT ? That could be important to a lender for example but isnt reflected in the financials. Accounting software isnt always user friendly for investments

I'm always happy to give a cost estimate by phone. It provides opportunity to ask questions and usually means a cost estimate range is useful. I just finished off two trusts like this each with 25+ investments and CGT issues etc and annual costs are in the range $1850-3000

 

This would be adding to your costs.
If you think the accountant is costing too much you could see what it costs to put them in the BT portfolio.

 

Income of different types from the funds? Probably cost base adjustments too. Not simple record keeping.

Why arent there upes? Because distributions are paid out in cash?

 

@Big A, we have a number of trusts. Our accountant charges us between $1,500 and $3,000 per year.

The more expensive ones have multiple properties, some properties have loans, ...

The above costs were for last FY. They include financials, tax returns, all communications throughout the year, etc.

I don’t really know whether they are cheap or expensive - I am very happy with our relationship and the service I receive.

 

BT reporting can range between decent and just terrible. Since we changed SMSF software a few years ago I often find myself telling BT clients about unpaid income that is missing or which fails to reflect TFN withholding. Sometimes a wrap can reduce total fees too....Some wrap reports are good and others just terrible.

 

So yes many different funds on the equities side. But all of the info is captured on the BT platform and there is a single annual tax statement issued that captures all that info. I assume that simplifies the process as that is one of the key benefits of using a platform.

Some of the unlisted property trusts could be moved on to the platform as well. But I didn't think that would make much difference. Each property trust provides a detailed statement with taxable income and deferred income portion. So not that complicated.

They are not advising on that. Just straight tax return and financial statement.

No beneficiaries are non resident.

Don't believe he does that. I have never seen it and probably don't need it anyway. With the equities the platform does all that for me.

I don't believe he is doing the cost base adjustments for the financial statement purpose. Only for the tax return purpose and that all comes from the annual tax statements.

Some distributions are paid out in cash then lent back to the trust from individual for investment. Then there are some investments that are set to DRP. So I guess there are UPE. But for tax purpose I believe we record them as distributed and taxable as per normal then just re lent back to the trust to be re invested. Is that an issue?

Thank you @Paul@PFI . I will do a little more homework and will get in touch over the phone to discuss further. And your range seems reasonable as that's where we originally started with the current accountant and its slowly crept up to now be over that range.

 

If you distribute and no cash goes out its a upe?

dont know if its a problem or not, just wondering why you think there is no upe.

 

If there is a div7A loan there must be extra work involved as the accountant would need to make sure compliant payments are made etc.

 

Division 7a advice would be the biggest issue and ensuring compliance. Thats usually the area I've seen done incorrectly in many reviews i've done.

 

Yeah well he is not making sure of anything. I am doing all that and providing him with the information. He just then records it in the tax return and financial statements. So it looks like I am doing the extra work and also paying for it.

Because there is no where on the financial statement that states the UPE's. They are being recorded as paid out. Then they are captured as loan back to trust from individual beneficiary.
From a tax perspective there should be no issue as the income is captured and tax paid by the beneficiary.

 

how would you know you are complying with Division 7a ? the rules aren't all that simple.

the accountant would be negligent by simply using your information.

 

Thank you @kierank . I have no complaints about the relationship or service. Though maybe I should about the service after some of the stuff I am being told in this thread. But I feel like as the value and income grows the fees are climbing with it but not reflective of the growth in workload.

 

Because I consulted with @Terry_w and got advice regarding my structure and Div7a.
But that doesn't mean I am getting it right. I could still make mistakes and the accountant should probably be double checking it. Though half the time I have more faith in my calculations then half the accountants I have worked with. Pick up mistakes by accountants all the time.

But the topic is not about whether the tax return is correct or not. I am interested in knowing if I am paying a fair price assuming he is doing everything he should be, which according to the feedback he is obviously not.