- March 20, 2014
- Posted by: admin
- Category: Business Structure, Small Business Accounting
Do you feel you’re paying too much in tax? Many businesses do and aren’t sure what to do about it.
The Thing About Taxation
Legal tax avoidance is a complex field best left to expert Melbourne accountant. One interesting option is through the use of trust, an organisational structure that offers many benefits including tax savings.
Tax avoidance can take many forms. Obviously you need to make sure you’re taking advantage of any deductions available to you.
However, if you’re a business entity, the structure of your organisation has a major impact on your tax liabilities
Very often, a limited company may not be the optimal setup for your operations from a tax point of view. You might be better served by operating as a trust.
A trust is a legal setup whereby a trustee controls assets on behalf of a group of beneficiaries. The most common setup is a family trust.
The trustee has the power to decide who receives income and other monies, and also who is liable for losses. This way, the trustee is thus able to arrange matters for the maximum tax benefit.
Trusts allow some the use of some attractive wealth management strategies such as arranging for beneficiaries to make loans to each other in a way that offers maximum tax advantages. Another advantage of a trust is that tax reporting procedures tend to be less than for entities such as partnerships and limited companies.
Trust structures also allow a level of protection from creditors.
When it comes to matters of tax compliance and business structure, you need the advice of a Melbourne accountant with extensive experience and in depth knowledge of trusts. Trusts do add a layer of complexity to a person or company’s financial, fiscal and accounting matters, so be sure you’re getting qualified advice.
Trusts and companies have major differences in accounting and tax assessment requirements and only experts can make sure you remain completely legal while paying the minimum required amount of tax.