+ A Partnership of Trusts

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A partnership of trusts

Having a partnership of trusts is the flavour of the month in relation to business structures for businesses being set up in the current commercial environment.

A partnership of discretionary trusts with a company as manager ('the representative') is a useful business structure for the following reasons:

1. the use of the trust (when compared with a company) enables a flexible income distribution and potential access to the capital gains tax concessions determined by reference to the circumstances of each individual trust;

2. as each trust is a discretionary trust, it may be controlled by one family group (this can be contrasted with a business owned by multiple families in a hybrid or unit trust) enabling the trustee to make a family trust election ('FTE') which is important in relation to various taxation purposes such as obtaining a deduction for tax losses or accessing franking credits; and

3. it has the commercial advantage of only one person being the public face of the partnership to the customers and suppliers (namely the representative, instead of the business owners).

We prepare these structures from $1,500 plus GST. Please call us for further input.

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