Bookkeeping & Management Reporting
For more information about TRUSTS / SELF MANAGED SUPER FUNDS / CORPORATE STRUCTURES / OFFSHORE COMPANIES / DISCLAIMER
We work with you to customise sophisticated strategies to protect your wealth today and for future generations to come.
Structures and Super Fund Options is a leader in asset protection advice to both individuals and businesses. We also specialize in establishing self managed Superannuation funds and consequent instalment warrant borrowing structures.
Structures and Super Fund Options can also assist you with corporate structure strategy and your offshore company advice and structures. We offer the following services to our clients:
Structures and Super Fund Options can also assist you with corporate structure strategy and your offshore company advice and structures. We offer the following services to our clients:
- Trusts
- Self Managed Super Funds
- Corporate Structures
- Off Shore Companies
TRUSTS AND ASSET PROTECTION
Structures and Super Fund Options is a leader in trust and asset protection advice to both individuals and businesses. We work with you to customise sophisticated strategies to protect your wealth today and for future generations to come.
A trust provides a valuable way of protecting the assets you have accumulated for the benefit of others.
An effective asset protection plan allows you to:
One of the most effective vehicles to use for asset protection is a trust. Trusts come in many shapes and sizes. And there is no ‘one size fits all’. The type of trust depends on many factors.
The most common type of trust is a family or discretionary trust.
So, what is a trust?
A trust is simply an agreement whereby a person or company agrees to hold an asset for the benefit of the others. The person who controls the asset is known as the ‘trustee’ and those who benefit are called the ‘beneficiaries’.
The assets held in a trust can vary – from property, shares, a business and business premise to works or art and so on. You, the creator of the trust sets out the specific terms as to how you want these assets managed in a document called the “trust deed”.
By transferring or buying assets in a trust, you don’t own the assets in your name. The assets are legally controlled by the trustee. However, you control exactly how they’re managed now and in the future. So regardless of what happens in life, your assets are protected from loss.
Types of Trusts
Enhancing your long term financial security requires careful planning and the type of trust appropriate to you will depend on a range of different factors
The 3 most common types of trusts are:
Discretionary or Family Trusts
A family trust (also known as a discretionary trust) is the most common trust used by small to medium size business owners, investors and medical professionals in Australia. They are generally set up to hold a family’s assets and/or business for the benefit of providing asset protection and tax planning for family members.
From a tax perspective the main advantage is that any income generated by the trust from business activities and investments, including capital gains can be distributed to beneficiaries in low tax brackets to significantly reduce taxes.
And the distribution is discretionary, which means, no beneficiary is entitled to receive income or capital, so in the example where one beneficiary was sued, the trustee can decide not to distribute income of capital to that beneficiary. Assets can also be transferred from generation to generation tax and duty free.
In most cases, from an asset protection perspective, assets held in a family trust cannot be attacked by creditors or lawsuits.
Other types of discretionary trusts are testamentary trusts, child maintenance trusts, property trusts, special disability trusts and charitable trusts.
Unit Trusts
A unit trust is like a company where the trusts property (business or investments) are divided into a number of shares called units. The number of units you hold will determine your entitlement to your share of income, capital gains and voting power. Units in a unit trust can also be categorised. For example you can have income units and capital units. Also unit holders can be individuals, companies or discretionary trusts.
The taxation benefits are generally not as flexible as a discretionary trust in that any income distributions must be distributed to unit holders as per their share of units. However if a discretionary trust was a unit holder you can achieve the same flow through tax benefits.
From an asset protection point of view, unit trusts don’t provide the same kind of asset protection as a discretionary trust. If a unit holder is made bankrupt, then that persons units will be treated like any other assets and sold to raise funds to pay creditors.
Hybrid trusts
A hybrid trust takes the best features of a discretionary trust and the best features of a unit trust and puts them into one. This means that the trustee has the discretion to distribute benefits to the beneficiaries of the trust – to beneficiaries who are on low tax rates, as well as have unit holders who are absolutely entitles to a portion of the benefits.
Trusts are a fantastic tool to protect your personal and business assets, while offering substantial tax planning opportunities.
Schedule a no obligation trust and asset protection consultation with one of our specialists, today.
We have extensive experience and so are able to offer specialist advice on Trust formation, ensuring that all statutory requirements are met. Obligations for trustees can often be onerous, and our assistance in Trust administration will also be invaluable.
A trust provides a valuable way of protecting the assets you have accumulated for the benefit of others.
An effective asset protection plan allows you to:
- Manage your assets more effectively during your lifetime
- Protect your financial interests as well as that of your spouse, children, siblings and other beneficiaries from unforseen risks and liabilities
- Significantly reduce taxes by strategically planning the distribution of income, capital gains and assets to your beneficiaries
- Create a legacy when you’re no longer around and ensure your assets are passed on from one generation to the next without paying taxes and duties
One of the most effective vehicles to use for asset protection is a trust. Trusts come in many shapes and sizes. And there is no ‘one size fits all’. The type of trust depends on many factors.
The most common type of trust is a family or discretionary trust.
So, what is a trust?
A trust is simply an agreement whereby a person or company agrees to hold an asset for the benefit of the others. The person who controls the asset is known as the ‘trustee’ and those who benefit are called the ‘beneficiaries’.
The assets held in a trust can vary – from property, shares, a business and business premise to works or art and so on. You, the creator of the trust sets out the specific terms as to how you want these assets managed in a document called the “trust deed”.
By transferring or buying assets in a trust, you don’t own the assets in your name. The assets are legally controlled by the trustee. However, you control exactly how they’re managed now and in the future. So regardless of what happens in life, your assets are protected from loss.
Types of Trusts
Enhancing your long term financial security requires careful planning and the type of trust appropriate to you will depend on a range of different factors
The 3 most common types of trusts are:
- Discretionary or Family Trusts
- Unit trusts
- Hybrid Trusts
Discretionary or Family Trusts
A family trust (also known as a discretionary trust) is the most common trust used by small to medium size business owners, investors and medical professionals in Australia. They are generally set up to hold a family’s assets and/or business for the benefit of providing asset protection and tax planning for family members.
From a tax perspective the main advantage is that any income generated by the trust from business activities and investments, including capital gains can be distributed to beneficiaries in low tax brackets to significantly reduce taxes.
And the distribution is discretionary, which means, no beneficiary is entitled to receive income or capital, so in the example where one beneficiary was sued, the trustee can decide not to distribute income of capital to that beneficiary. Assets can also be transferred from generation to generation tax and duty free.
In most cases, from an asset protection perspective, assets held in a family trust cannot be attacked by creditors or lawsuits.
Other types of discretionary trusts are testamentary trusts, child maintenance trusts, property trusts, special disability trusts and charitable trusts.
Unit Trusts
A unit trust is like a company where the trusts property (business or investments) are divided into a number of shares called units. The number of units you hold will determine your entitlement to your share of income, capital gains and voting power. Units in a unit trust can also be categorised. For example you can have income units and capital units. Also unit holders can be individuals, companies or discretionary trusts.
The taxation benefits are generally not as flexible as a discretionary trust in that any income distributions must be distributed to unit holders as per their share of units. However if a discretionary trust was a unit holder you can achieve the same flow through tax benefits.
From an asset protection point of view, unit trusts don’t provide the same kind of asset protection as a discretionary trust. If a unit holder is made bankrupt, then that persons units will be treated like any other assets and sold to raise funds to pay creditors.
Hybrid trusts
A hybrid trust takes the best features of a discretionary trust and the best features of a unit trust and puts them into one. This means that the trustee has the discretion to distribute benefits to the beneficiaries of the trust – to beneficiaries who are on low tax rates, as well as have unit holders who are absolutely entitles to a portion of the benefits.
Trusts are a fantastic tool to protect your personal and business assets, while offering substantial tax planning opportunities.
Schedule a no obligation trust and asset protection consultation with one of our specialists, today.
We have extensive experience and so are able to offer specialist advice on Trust formation, ensuring that all statutory requirements are met. Obligations for trustees can often be onerous, and our assistance in Trust administration will also be invaluable.
SELF MANAGED SUPER FUNDS
Once you have decided to set up a self-managed super fund (Whether it is to unlock your Super to invest in property or to take it away from large investment houses so you can control where your funds are invested and limit the large fees charged by some of the commercial superannuation service providers) there are a range of steps that need to be taken to get it started. You also need to make some important decisions about how to structure and operate your fund.
What is an SMSF ‘Trustee
When setting up a self-managed super fund, you take on the role of either a trustee or director of a company that acts as the trustee of your fund. A trustee is a person or company that holds and invests the fund’s assets for the benefit of each member’s retirement.
You have the choice when establishing a self-managed super fund to have individual trustees or appoint a company to act as the trustee. Structures and Super Fund Options always recommend the appointment of a Corporate Trustee as our experience with lenders is that they always prefer to deal with a Corporate Trustee.
SMSF Trustee Responsibilities
As a trustee or director, you are responsible for running the fund and making decisions that affect your retirement interests and that of each member of your self managed super fund. Therefore, you must act in the best interests of all fund members when making decisions, ensuring that the fund is managed separately from your own affairs and that the money in the fund is only accessed when the law allows you to do so, such as in retirement.
There are some important considerations when setting up a self-managed super fund, including deciding on whether each member will act as individual trustees or a company act as trustee in which you and the other members will be directors.
You also need to ensure that you are eligible to act as a trustee, therefore you can’t be a bankrupt, and someone charged with a dishonesty offence or have been subject to superannuation law penalties. Furthermore, you must ensure that the fund meets the residency requirements to be a complying fund and receive tax concessions.
How many members can a Self Managed Super Fund have
A self managed super fund is allowed up to 4 members, with each member required to be a fund trustee or director. This requirement is to promote engagement and equal responsibility amongst all members of the fund. In addition:
- NO member can be an employee of another member, unless they are related and,
- NO trustee can be paid for their duties or services as being a trustee.
It is possible to setup a self managed super fund as a single member fund. Where the fund has a corporate trustee, you can also be the sole director of a trustee company. Alternatively you must be only one of two directors ensuring that the other director is either related to you or is not employed by you. Where you wish to have individual trustees, you must have two trustees in which in addition to you, must include a person you are related to or is not employed by you.
The Process to setup an SMSF
The setup of a SMSF requires a range of steps to be completed to start operating your fund.
Trust Deed:The first step is to arrange for a Trust Deed to create the fund. This is the book of rules that will govern its operation and will include rules around acting as a trustee, membership, contributions, benefits and anything else to do with the fund. The preparation of the book of rules is done by a lawyer who will draft the necessary rules for you.
Fund Trustees: The fund will also be required to appoint fund trustees, which must be consented to in writing. You as a trustee will need to sign a trustee declaration within 21 days of becoming a trustee or director, stating that you understand your duties and responsibilities as a fund trustee or director of the corporate trustee.
Tax Requirements: Various registrations with the Australian Taxation Office are needed to become regulated. These applications must be done within 60 days. The fund will also need to apply for a Tax File Number, Australian Business Number, along with potentially requiring additional registrations including GST and Pay-As-You-Go withholding. Tax & Accounting Options Pty Ltd (link) a member of the Options Group is a Professional Accounting Practice we recommend to carry out these tasks.
Fund Membership: You must apply to become a member of the fund and once accepted have the fund record your tax file number to ensure that it can accept certain contributions. You will be required to setup a bank account for your self-managed super fund to manage the fund’s operations including accepting contributions, making investments, receiving investment income and pay all fund expenses and liabilities. It is important that the super fund bank account is kept separate to any individual or business bank accounts that you may have.
SMSF Investment Strategy: Once the fund is legally established, it is important that an SMSF investment strategy is prepared that sets out the investment objectives and how you plan to achieve them, having regard to issues including diversification, risk and likely return from investments, liquidity of fund assets, the ability to pay benefits as and when they fall due, such as in retirement and generally meeting the member’s needs and circumstances.
You may wish to engage a licensed financial adviser to help you prepare an investment strategy, but you and the other trustees are responsible for managing the fund’s investments. It is important that an investment strategy is documented to ensure that you can evidence you investment decisions and show that they comply with the law.
Management:Setting up a self managed super fund gives you the opportunity to actively manage your own super and make your own investment choices, but with it comes responsibility. Regardless of whether someone takes a more active role within the fund, each trustee or director is equally responsible.
Instalment Warrant:Instalment warrant arrangements under superannuation law are lending arrangements that enable an SMSF (or any super fund) to acquire an asset through a series of agreed instalment payments.
Under the instalment warrant arrangement, an SMSF:
For the period of the loan, the SMSF obtains an interest in the underlying asset and is entitled to all income from the asset. The lender is entitled to interest on the loan and is protected by security over the asset being acquired through the instalment warrant arrangement.
If the SMSF defaults on the borrowing, then the lender may have recourse to the underlying asset only — that is, the lender will have no recourse to any of the SMSF's other assets.
Instalment warrant arrangements:
If you want to apply for to a bank or other lender for an Instalment warrant you need to ensure the documents including the bare trust and warrant documents are compliant so the Bank and Finance broker can properly assess the documentation and if satisfied ensure the loan proceeds without delay.
If you want to control your own super fund, unlock it for property investment or put in place the necessary structure so the fund can apply for a loan to purchase property through the installment warrant process Structures & Super Fund Options can help you.
What is an SMSF ‘Trustee
When setting up a self-managed super fund, you take on the role of either a trustee or director of a company that acts as the trustee of your fund. A trustee is a person or company that holds and invests the fund’s assets for the benefit of each member’s retirement.
You have the choice when establishing a self-managed super fund to have individual trustees or appoint a company to act as the trustee. Structures and Super Fund Options always recommend the appointment of a Corporate Trustee as our experience with lenders is that they always prefer to deal with a Corporate Trustee.
SMSF Trustee Responsibilities
As a trustee or director, you are responsible for running the fund and making decisions that affect your retirement interests and that of each member of your self managed super fund. Therefore, you must act in the best interests of all fund members when making decisions, ensuring that the fund is managed separately from your own affairs and that the money in the fund is only accessed when the law allows you to do so, such as in retirement.
There are some important considerations when setting up a self-managed super fund, including deciding on whether each member will act as individual trustees or a company act as trustee in which you and the other members will be directors.
You also need to ensure that you are eligible to act as a trustee, therefore you can’t be a bankrupt, and someone charged with a dishonesty offence or have been subject to superannuation law penalties. Furthermore, you must ensure that the fund meets the residency requirements to be a complying fund and receive tax concessions.
How many members can a Self Managed Super Fund have
A self managed super fund is allowed up to 4 members, with each member required to be a fund trustee or director. This requirement is to promote engagement and equal responsibility amongst all members of the fund. In addition:
- NO member can be an employee of another member, unless they are related and,
- NO trustee can be paid for their duties or services as being a trustee.
It is possible to setup a self managed super fund as a single member fund. Where the fund has a corporate trustee, you can also be the sole director of a trustee company. Alternatively you must be only one of two directors ensuring that the other director is either related to you or is not employed by you. Where you wish to have individual trustees, you must have two trustees in which in addition to you, must include a person you are related to or is not employed by you.
The Process to setup an SMSF
The setup of a SMSF requires a range of steps to be completed to start operating your fund.
Trust Deed:The first step is to arrange for a Trust Deed to create the fund. This is the book of rules that will govern its operation and will include rules around acting as a trustee, membership, contributions, benefits and anything else to do with the fund. The preparation of the book of rules is done by a lawyer who will draft the necessary rules for you.
Fund Trustees: The fund will also be required to appoint fund trustees, which must be consented to in writing. You as a trustee will need to sign a trustee declaration within 21 days of becoming a trustee or director, stating that you understand your duties and responsibilities as a fund trustee or director of the corporate trustee.
Tax Requirements: Various registrations with the Australian Taxation Office are needed to become regulated. These applications must be done within 60 days. The fund will also need to apply for a Tax File Number, Australian Business Number, along with potentially requiring additional registrations including GST and Pay-As-You-Go withholding. Tax & Accounting Options Pty Ltd (link) a member of the Options Group is a Professional Accounting Practice we recommend to carry out these tasks.
Fund Membership: You must apply to become a member of the fund and once accepted have the fund record your tax file number to ensure that it can accept certain contributions. You will be required to setup a bank account for your self-managed super fund to manage the fund’s operations including accepting contributions, making investments, receiving investment income and pay all fund expenses and liabilities. It is important that the super fund bank account is kept separate to any individual or business bank accounts that you may have.
SMSF Investment Strategy: Once the fund is legally established, it is important that an SMSF investment strategy is prepared that sets out the investment objectives and how you plan to achieve them, having regard to issues including diversification, risk and likely return from investments, liquidity of fund assets, the ability to pay benefits as and when they fall due, such as in retirement and generally meeting the member’s needs and circumstances.
You may wish to engage a licensed financial adviser to help you prepare an investment strategy, but you and the other trustees are responsible for managing the fund’s investments. It is important that an investment strategy is documented to ensure that you can evidence you investment decisions and show that they comply with the law.
Management:Setting up a self managed super fund gives you the opportunity to actively manage your own super and make your own investment choices, but with it comes responsibility. Regardless of whether someone takes a more active role within the fund, each trustee or director is equally responsible.
Instalment Warrant:Instalment warrant arrangements under superannuation law are lending arrangements that enable an SMSF (or any super fund) to acquire an asset through a series of agreed instalment payments.
Under the instalment warrant arrangement, an SMSF:
- Makes an initial upfront payment of part only of the purchase price of an asset (say 20%- 35%);
- Borrows the balance of the purchase price from a lender; and
- Progressively repays the borrowing (plus interest) through instalments until the asset is paid for in full.
For the period of the loan, the SMSF obtains an interest in the underlying asset and is entitled to all income from the asset. The lender is entitled to interest on the loan and is protected by security over the asset being acquired through the instalment warrant arrangement.
If the SMSF defaults on the borrowing, then the lender may have recourse to the underlying asset only — that is, the lender will have no recourse to any of the SMSF's other assets.
Instalment warrant arrangements:
- Are an effective means of SMSFs leveraging the purchase of an asset; and
- Enable the SMSF to use its capital to acquire several assets rather than committing to the purchase of a single asset.
If you want to apply for to a bank or other lender for an Instalment warrant you need to ensure the documents including the bare trust and warrant documents are compliant so the Bank and Finance broker can properly assess the documentation and if satisfied ensure the loan proceeds without delay.
If you want to control your own super fund, unlock it for property investment or put in place the necessary structure so the fund can apply for a loan to purchase property through the installment warrant process Structures & Super Fund Options can help you.
CORPORATE STRUCTURING
Structuring is the corporate management term for the act of organising the legal, ownership, operational, or other structures of a business whether it be sole trade, partnership, trust or company for the purpose of making it more profitable, protected from creditors and/or better organized for its present needs.
Of all the decisions you make when starting a business, probably the most important one relating to taxes is the type of legal structure you select for your company. Not only will this decision have an impact on how much you pay in taxes, but it will affect the amount of paperwork your business is required to do, the personal liability you face and your ability to raise money.
Structuring & Super Fund Options are specialists in the provision of advice to business owners about the appropriate structure for a client’s specific business needs.
Most businesses are now or should have a Corporate Structure. Let Structuring & Super Fund Options explain the various corporate structures available and make a recommendation of the most suitable for your specific needs.
We have access to a fully electronic incorporation service which can usually see a Corporate Body established and an Australian Corporate Number (A.C.N.) available in less than 2 hours of receipt of a fully funded order form.
Companies are regulated in Australia by statute and the general law. The Corporations Act 2001 (Corporations Act) allows for the registration of four types of companies:
When a company is registered under the Corporations Act it is automatically registered as an Australian company. This means that it can conduct business throughout Australia without needing to register in individual State and Territory jurisdictions.
The most common type of company is a company limited by shares, which may be either a proprietary (private) company or a public company. A proprietary company is most common because it has the advantage of being simpler to manage and less expensive to administer.
Changing business needs often lead an organisation to consider restructuring. A successful restructure involves not only the creation of a sound strategy, but the effective implementation of that strategy.
The type of corporate structure you require depends on your specific needs – Call and speak to Structuring & super Fund options today to discuss your specific needs.
Of all the decisions you make when starting a business, probably the most important one relating to taxes is the type of legal structure you select for your company. Not only will this decision have an impact on how much you pay in taxes, but it will affect the amount of paperwork your business is required to do, the personal liability you face and your ability to raise money.
Structuring & Super Fund Options are specialists in the provision of advice to business owners about the appropriate structure for a client’s specific business needs.
Most businesses are now or should have a Corporate Structure. Let Structuring & Super Fund Options explain the various corporate structures available and make a recommendation of the most suitable for your specific needs.
We have access to a fully electronic incorporation service which can usually see a Corporate Body established and an Australian Corporate Number (A.C.N.) available in less than 2 hours of receipt of a fully funded order form.
Companies are regulated in Australia by statute and the general law. The Corporations Act 2001 (Corporations Act) allows for the registration of four types of companies:
- A company limited by shares (Exempt Proprietary, Public and Unlisted Public Companies)
- A company limited by guarantee
- A company with unlimited liability
- A no liability company (typically used for mining purposes)
When a company is registered under the Corporations Act it is automatically registered as an Australian company. This means that it can conduct business throughout Australia without needing to register in individual State and Territory jurisdictions.
The most common type of company is a company limited by shares, which may be either a proprietary (private) company or a public company. A proprietary company is most common because it has the advantage of being simpler to manage and less expensive to administer.
Changing business needs often lead an organisation to consider restructuring. A successful restructure involves not only the creation of a sound strategy, but the effective implementation of that strategy.
The type of corporate structure you require depends on your specific needs – Call and speak to Structuring & super Fund options today to discuss your specific needs.
OFFSHORE COMPANIES
Structures & Super Fund Options provides a full range of cross border wealth management services to high net worth individuals and their families and businesses.
Our clients include professionals, expatriates, entrepreneurs and businesses of all sizes.
Our core business is the formation and management of onshore and offshore companies, to meet the specific personal or business objectives of our clients.
Our network of globally based agents gives Structures & Super Fund Options a global reach which enables clients to access the whole spectrum of international structures from a local point of delivery.
For a full briefing and quote to meet your current and specific needs please contact Structures & Super Fund Options Pty Ltd for an obligation free consultation without delay.
Our clients include professionals, expatriates, entrepreneurs and businesses of all sizes.
Our core business is the formation and management of onshore and offshore companies, to meet the specific personal or business objectives of our clients.
Our network of globally based agents gives Structures & Super Fund Options a global reach which enables clients to access the whole spectrum of international structures from a local point of delivery.
For a full briefing and quote to meet your current and specific needs please contact Structures & Super Fund Options Pty Ltd for an obligation free consultation without delay.
DISCLAIMER
Please note we are not financial planners and are not offering any type of finance product.
Nor are we lawyers and we are not offering legal advice.We are Strategic Business Consultants.If you require the services of a financial planner or lawyer we are happy to refer you to one.