+ Asset Protection and Declarations of Trust

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Your adult child is becoming increasingly involved in your business, which is owned by a family company all the shares in which have been owned by you since before CGT was introduced (in 1985). You are advised to transfer all your shares to a family trust to be set up for asset protection purposes. Your child is to be a capital and income beneficiary but you will just be an income beneficiary. Stamp duty is paid on the transfer of shares into the trust but you are not told that any transfer of the shares out of the trust to your child after you retire will result in stamp duty being paid a second time.

If a declaration of trust over the shares had been made instead, s 57 of the Duties Act would apply where the shares are later transferred out of the trust to your adult child and the second round of stamp duty would have been avoided.

Make sure your lawyer fully advises you!

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