Setting up trust in company?

My financial advisor recommended I set up a trust in our company to minimise tax payable. I intend to speak to our accountant next week. But in the meantime, Can someone please advise :

1. how long would this take to set up?

2. could it be done in the period after contract signing (for development site) and before settlement?

3. What are the ongoing costs and expenses of having a trust set up

 

What does trust in a company mean? Who is the trustee? What sort of trust? Who are the beneficiaries?

 

Mate, this is legal advice. You are getting advice from everyone but a lawyer.

What you say doesn't make sense. You probably mean a company as trustee of a trust.
it can be done after contracting, but there are a lot of legal issues such as stamp duty, asset protection, loans and more. It can be set up in a day, but you should allow a week for review of the deed and modification to suit your needs.

Ongoing expenses are just a tax return/financials - which is what the accountant can help with.

Only lawyers can set up trusts.

 

thanks Terry - that is what I mean! I will seek legal advice. I’ll sign the purchase agreement ‘and/or nominee’ so we can change it to the ‘company Pty Ltd’ on behalf of ‘family trust’ before settlement

 

Must be in vic as and/or nominee doesnt generally result in double duty in victoria

BUT your comment concerns me after after development. That may be dutiable in victoria. Need to get advice on that.

Are they saying the trust will hold the property ?

Have they advised you on the additional land tax ? Additional accounting fees per annum ?

Whats the reason for the property being in a trust ?

The costs might outweigh the benefits.

 

Don't do that

 

thanks for your post. I need to seek more advice this week but my intention is to have a discretionary trust so we can distribute profits. The company would own the property.

I’m in Vic. The intention is to put and/or nominee so we can have the right ownership structure on the contract before settlement - it will be a 60 or 90 day settlement so will be enough time to have the right structure in place.

the property will remain in the same ownership structure for 12 months, at which point it will be sold for profit and the proceeds distributed to trustees.

 

The insertion of and/or nominee in a contract does nothing really, in VIC it doesn't change the stamp duty outcome either.

My advice is don't sign a contract until you have the entities already in existence.
Nomination is also a CGT event so if you have a longish settlement and/or the property jumps in value when you nominate there will be a CGT even with CGT payable with no 50% CGT discount either.

Also issues with who pays the deposit and getting loan approvals - impossible basically.

See
Legal Tip 5: And/or nominee and stamp duty issues https://propertychat.com.au/community/threads/legal-tip-5-and-or-nominee-and-stamp-duty-issues.389/

Legal Tip 39: And/or Nominee contracts and Asset protection https://propertychat.com.au/community/threads/legal-tip-39-and-or-nominee-contracts-and-asset-protection.2032/

 

thanks Terry for your advice. I will consult a professional before signing.

 

ok make sure the adviser tells you about it probably being on revenue account so holding for 12 months wont mean you get a CGT discount. it sounds like a profit from an isolated transaction to me.

 

Set up everything before making any purchases or expenses.

Ongoing expenses are the annual ASIC fee for the company, plus the accountant's fee.