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ABN 78 106 239 758

DISCRETIONARY FAMILY TRUST DEEDS

INTRODUCTION;

One of the best methods of distributing income and tax liabilities for the family and better than a partnership.

'How it works; A person outside of the trust decides it is a good idea for the trust to be formed. He/she is called the 'Foundor or Settlor'. He provides the initial money to be held in Trust usually $10.The trust is formed around Beneficiaries and Trustee's which can be both. The trustee's are appointed by "Appointee's", or guardians.(usually the 'appointees' ie self controlled) The Trust comprises the original $10 and every other 'asset'you or other members brings into the Trust. The Trust is taxed at the corporate rate of 30%. So accumulating funds is advised because tax is only paid by way of distribution. However if the rate of tax of an individual paying tax above 30%, then any distribution is saving tax; Then any surplus is allocated to those members who do not attract a rate of the 30%,Say young Family Members.The distribution to the fund is also after say a business pays tax to the salary earners, the owners.

The Trustee's are indemnified out of the assets of the trust. this is much like a director of a company as long as personall guarantees are not in place; The trust is allowed to borrow not like a Superannuation Deed.

The Discretionary part is that dividends etc can be channelled to a low income beneficiary,franked amounts(from Shares) are credited to this person and tax releif is accorded.The trust can also accumulate this income and not pay anybody until it is convenient.

There is also apart in the trust fund deed that allocated 'dividends' are not liable to be paid even if declared. Therefore its called "Discrectionary"

The Role of a Company; Of couse this is the best vehicle to manage a Fund which will last over many lifetimes. The Benefit arises in that the assets are held in the company name so that no Capital Gains Tax applies,any transfers do not attract fees or stamp duties for changes in ownership etc.The Company can also hold 50% of its income and not declare it so enabling investment etc, (a simple view) The benefits are also apparent when you consider the naming rights. Trust only bank accounts must be started with .."The Jones Family Trust" or "Trustee for the Jones family" Whoever the Company when registerd as a Trustee for the "Jones family Trust has its own indivudal name.(say ABC Company.) Its own ABN and Tax Numbers.. Its constitution allows it to do anything a normal person could do in dealing with the income of a normal company;. When Income is obtained by the ABC Company, it is held for distribution at the Directors discretion,( to the Trust) its distribution along the shareholders. The Trustees of the Fund then impose their discretion as to the best outcome of distribution. Taxation is also only 30%, so fully franked dividends are possible for the beneficiaries if share dividends are involved.

I have included the Index and the Front Page of our Discretionary [Family]Trust Deed so you will grasp the topics contained in it;We will send/E-mail you a draft deed if you request, Ring or Mail me.

Our Service of applying for and receiving the Australian Business Number, Tax File Numbers and GST Registration, for the DEED. Is the only way we provide these Deeds, There is a lot of work and includes all banking minutes and requirement with a 'high' presentation binder to file all documents for some time to come.

COSTS: Deed Complete with ABN, GST Etc.$375 . Posted 'Overnight Express'