Unlike a person or a company, a trust is not a legal entity that can own property. This is because a ‘trust’ is just a relationship between the legal owner (the trustee) and the beneficial owners (the beneficiaries). As such, documents including a house title, share certificate, or members’ register will list the trustee as the property owner.
Taxopia Trust Establishment
Are you looking for cheap company tax returns or cheap trust and partnership tax returns? Taxopia is a professional but affordable solution to comply with annual business tax and accounting lodgements!
Establish A Trust With Taxopia
Cost of a Trust
Taxopia is Australian owned and based in Melbourne.
If you’re looking to establish your own trust, you’ve come to the right place. At Taxopia, we have an online form to help you easily and quickly establish a discretionary (family) trust under Australian law.
PRICING
The cost to set up a standard Trust is $749 (which includes GST) + relevant State Stamp Duty. The package for a Trust together with a new Trustee company set-up is $1,547, including GST, plus relevant State Stamp Duty.
Current State Stamp Duty Prices:
- NSW = $750
- VIC = $200
- TAS = $50
- NT= $20
- All Other States = $0
- This cost is for standard Trust establishment. We reserve the right to review your submitted information and send you a quotation if the standard price does not apply. If this is the case, your card will not be charged until you accept the new quotation.
- This cost applies to orders for electronic copies of documents only. Hardcopies would be extra.
- This cost applies to orders completed via the online forms.
Please note that if you choose to pay via credit card, a surcharge of 2% will be applied to the total amount.
The price includes:
Taxopia is Australian owned and based in Melbourne.
- Trust deed documents – But no amendments allowed. Please see your legal professional for this.
- Required minutes for trustee appointment
- Unitholders certificates, where applicable
- Application for Trust Tax File Number (if applicable)
- Application for Trust Australian Business Number (ABN), if required
- Application for GST and PAYG withholding on wages, if required
The intention of this form is to gather most of the data required for us to complete the trust establishment process. The questionnaire takes approximately 10 to 15 minutes to complete, and you can save it and return at any time.
If you require help going through the form, you can email us so that we can assist you in completing the forms.
Whilst completing the form, please ensure that you have used capital and lowercase letters exactly as you would like them to appear on your paperwork.
Once we receive the submitted form, we will review your answers and may discuss with you where required.
If you have any questions, please feel free to contact us at info@taxopia.com.au or call us on 1300 829 674
To start, click on the “Start Now” button below.
Why Choose an Accountant vs. a Lawyer for Trust Establishment and Other Trust Matters
When it comes to establishing a trust and managing trust-related matters, both accountants and lawyers play crucial roles. However, there are specific advantages to choosing an accountant over a lawyer for these tasks.
1. Expertise in Financial Management and Taxation
- Accountants: Accountants specialize in financial management, tax planning, and compliance. They have in-depth knowledge of the tax implications of different types of trusts and can ensure that the trust is structured in the most tax-efficient manner. This is particularly important in 2024, as tax laws have become increasingly complex, with specific regulations affecting trusts.
- Lawyers: While lawyers are well-versed in the legal aspects of trust establishment, they may not have the same level of expertise in tax matters. A lawyer can draft the legal documents required to establish a trust, but they might need to collaborate with an accountant to optimize the trust’s tax efficiency.
2. Holistic Financial Advice
- Accountants: An accountant can provide holistic financial advice, considering not only the trust itself but also how it fits into your broader financial plan. This includes advice on investments, retirement planning, and estate planning. Accountants can help ensure that the trust aligns with your overall financial goals.
- Lawyers: Lawyers focus primarily on the legal structure and compliance of the trust. While they can provide legal advice on trust law and related matters, they typically do not offer comprehensive financial planning services.
3. Cost Efficiency
- Accountants: In many cases, working with an accountant for trust establishment and ongoing trust management can be more cost-effective than working with a lawyer. Accountants often charge lower fees for trust-related services, especially if the trust requires ongoing tax filing and financial management.
- Lawyers: Legal services can be more expensive, particularly for the initial establishment of the trust. Lawyers charge for drafting legal documents, providing legal advice, and handling any legal disputes that may arise, which can add up quickly.
4. Ongoing Support and Compliance
- Accountants: Accountants are well-equipped to provide ongoing support for trusts, including annual tax returns, financial reporting, and compliance with changing tax laws. They can help ensure that the trust remains compliant with all financial regulations, which is crucial for avoiding penalties and legal issues.
- Lawyers: While lawyers can provide ongoing legal advice and support, they are not typically involved in the day-to-day financial management of a trust. You may still need to hire an accountant for tax filings and financial reporting.
5. Access to Specialized Accounting Software
- Accountants: Accountants often use specialized software that streamlines the management of trusts, including tracking income, expenses, and distributions. This can provide a more accurate and efficient way to manage the trust’s finances.
- Lawyers: Lawyers typically do not use specialized accounting software for trust management. Instead, they focus on the legal documentation and compliance aspects, which may require manual coordination with an accountant.
Summary Table
| Factor | Accountant | Lawyer |
|---|---|---|
| Expertise in Financial Management & Taxation | Specializes in tax-efficient trust structuring and financial management | Focuses on legal aspects, may lack deep tax expertise |
| Holistic Financial Advice | Provides comprehensive financial planning services | Focuses on legal structure, not on broader financial advice |
| Cost Efficiency | Generally more cost-effective for trust establishment and management | Typically higher fees, especially for legal documentation |
| Ongoing Support & Compliance | Offers continuous support, tax filings, and compliance | Provides ongoing legal advice, but not day-to-day financial management |
| Access to Specialized Software | Utilizes accounting software for efficient trust management | Relies on manual coordination with accountants for financial management |
Choosing an accountant for trust establishment and related matters offers significant advantages, particularly in terms of tax efficiency, cost savings, and comprehensive financial management. While lawyers are essential for legal compliance, an accountant can provide the holistic financial support needed to manage a trust effectively.
EASY 3-STEP PROCESS
Fill up the form
Complete our simple online form with the necessary details to establish your new trust — it only takes a few minutes.
We prepare and set up your trust
Our expert team will draft the Trust Deed and all required documents to legally establish your trust structure.
Receive your trust documents
After finalisation, we deliver the complete trust documentation package to you, ready for execution and use.
Company Tax Returns Packages
We have 4 different Company and Corporate Tax Return packages for you to choose from. Scroll down or click above to see the options.
What is a Trust?
A Trust is an obligation imposed on an individual or company to hold property or assets for the benefit of others. The holder of the trust is called the Trustee and the others are Beneficiaries. Trusts are not at a separate entity therefore liability lies with the Trustee. The Trustee is responsible for all business operations and there are yearly administrative tasks to complete. All transactions are undertaken by the Trustee and all are therefore a personal obligation.
A Trust is a more expensive business structure to set up, but there are benefits to working within this model. The Trustee can be employed by the Trust, and there can be employees. Income Tax doesn’t need to be paid for this structure as an entity but is passed on to beneficiaries however, GST may be applicable. Tax-free capital gains and tax incentives can be claimed by the beneficiaries should the structure be set up to allow this. A Trust requires an official Trust Deed to be completed by a qualified accountant or business lawyer.
Benefits of Establishing a Trust
There are many varied benefits and plenty of uses for trusts, so thinking about your specific goals and your beneficiaries is key to choosing the right type. For example, having assets in a trust ensures the professional ongoing management of those assets. From a cost standpoint, trusts can be a good way of reducing tax liabilities and probate fees. Trusts are also established to keep assets out of a surviving spouse’s estate while also providing lifetime income. Individuals with special needs may also benefit from trusts especially if the provisions within them are designed to use the assets in funding their needs. Furthermore, by putting assets inside the legal boundaries of a trust, individuals are protected from poor investment decisions or being taken advantage of by others.
Types of Trusts
There are many types of trusts that individuals and businesses can apply for, but there is no one-size-fits-all type of solution. Choosing the right one depends on numerous factors pertaining to the applicant’s conditions and their overall end goal. Below are three common types of trusts that are usually dealt with.
Discretionary (Family) Trust
Discretionary or Family trusts are established when there are family assets which include shares, personal property, or a business that have to be managed by, protected by, and passed on to the next generation. Distribution of income and capital gains to any family member that is deemed fit, is at the discretion of the trustee. The coverage of Family Trusts may include a client’s own family lineage, children, grand parents, siblings, nephews, nieces, and spouse.
Minor’s Trust
When a family member has legally set aside funds or assets for a child under the age of 18 to for future educational, medical, or recreational expenses, a Minor’s Trust ensure the protection and management of those receivables until the child, in this case a beneficiary, becomes an adult. There can be multiple beneficiaries under the one trust and trustees under this category may be a parent, sibling or friend of the minor as long as they are 18 years of age and residents of Australia.
Testamentary Trusts Through Wills
A person may write a will with instructions that can pave way to the establishment of a Testamentary Trust once the said person has passed away. When this happens, the deceased person’s assets are held in trust on behalf of the beneficiaries rather than distributing the assets directly to them. The rules in the Testamentary Trust, as written by the deceased, will dictate the way the assets are distributed to the beneficiaries. This trust also can protect the assets a beneficiary may receive in the event of bankruptcy or business lawsuit among many other instances.
Your Trust Establishment Questions answered
What is a Trustee?
A Trustee is an individual or entity responsible for managing the assets held in a trust on behalf of the beneficiaries. In Australia, the trustee has a fiduciary duty, meaning they must act in the best interests of the beneficiaries. This includes managing trust property, ensuring proper distribution of income or assets, and adhering to the terms outlined in the trust deed. The trustee’s actions are governed by the Trusts Act and common law principles, ensuring they exercise their duties with care, diligence, and integrity. Trustees can be individuals or corporate entities, and their responsibilities can vary depending on the type of trust and specific provisions in the trust deed.
What is a Beneficiary?
A Beneficiary is a person or entity entitled to receive benefits from the trust, as specified in the trust deed. These benefits can include income distributions, capital, or other assets held by the trust. In Australian trusts, beneficiaries can be specific individuals, companies, or even charitable organizations. Beneficiaries have a right to be informed about their entitlements and can request financial accounts from the trustee. It’s important for beneficiaries to understand that their rights and interests in the trust are determined by the terms of the trust deed and the discretion of the trustee, especially in discretionary trusts where distributions are not fixed.
What is an Appointor?
An Appointor is an individual or entity with the power to appoint or remove the trustee(s) of a trust. This role is crucial as it ensures the trust can operate effectively and adapt to changing circumstances. The appointor holds significant influence over the trust’s administration by being able to replace a trustee who is not performing their duties satisfactorily or if there is a need to change trustees due to legal, financial, or personal reasons. The powers and limitations of an appointor are detailed in the trust deed. In Australia, appointors must act in good faith and in the best interests of the beneficiaries when exercising their powers.
What's the Difference Between an Individual or Company Trustee?
The choice between an individual or company trustee can significantly impact the administration of the trust:
- Individual Trustee: An individual trustee is a natural person who personally manages the trust. They may bring a personal touch and understanding to the beneficiaries but may also face challenges like incapacity or death, which can complicate the continuity of trust management. Additionally, individual trustees can be held personally liable for their actions.
- Corporate Trustee: A company acting as a trustee provides perpetual existence, meaning it can continue managing the trust despite changes in directors or shareholders. Corporate trustees offer limited liability protection, as the company’s assets are separate from those of its directors or shareholders. This structure can provide greater legal and financial safeguards. However, corporate trustees may incur additional costs, including setup and compliance expenses.
Why Pay the Extra for a Company Trustee?
Opting for a corporate trustee often incurs higher initial and ongoing costs, such as incorporation fees, annual ASIC charges, and compliance costs. However, the benefits can outweigh these expenses:
- Limited Liability: Corporate trustees limit the personal liability of individuals involved in the trust, protecting personal assets from claims against the trust.
- Perpetual Succession: A company can exist indefinitely, ensuring continuity in trust management even if individuals involved change over time.
- Professional Management: Corporate trustees often bring a higher level of professionalism and consistency in managing the trust’s assets and obligations.
- Flexibility in Ownership: Changes in company ownership or control do not affect the trust’s continuity, providing stability in governance.
Trust vs. Company
The primary differences between a trust and a company in Australia revolve around structure, taxation, and legal status:
- Structure: A trust is a relationship where one party (the trustee) holds assets for the benefit of others (the beneficiaries). A company is a separate legal entity that owns assets, incurs liabilities, and is responsible for its actions.
- Taxation: Trusts are generally treated as pass-through entities for tax purposes, meaning the income is taxed in the hands of the beneficiaries. Companies are taxed at the corporate tax rate, and any distributions to shareholders (dividends) may be subject to additional taxation.
- Liability: Trustees (particularly individuals) can be personally liable for the trust’s debts and obligations, whereas company directors are generally protected by limited liability.
- Flexibility: Trusts offer flexibility in distributing income and capital, particularly through discretionary trusts. Companies are more rigid, with profits typically distributed according to shareholding.
When is a Trust Better Than a Company?
A trust may be a better choice than a company in several scenarios:
- Asset Protection: Trusts can provide a higher level of asset protection, as the trust’s assets are not owned personally by the beneficiaries or trustee (especially with a corporate trustee).
- Income Splitting: Discretionary trusts offer flexibility in distributing income to beneficiaries, which can be advantageous for tax planning, allowing distributions to be made in a tax-efficient manner.
- Succession Planning: Trusts are often used for estate planning, enabling assets to be passed down through generations with specific conditions or protections in place.
- Privacy: Trusts can offer more privacy compared to companies, as they do not have the same public disclosure requirements.
- Philanthropic Goals: Trusts are ideal for charitable purposes, providing a structured way to manage and distribute funds for charitable activities.
Can I Transfer Property I Already Own Into a New Trust?
If you set up a new trust, you can transfer property that you already own into it. You should know that the transfer of property into a trust will generally be classed as a sale. This can be an expensive exercise as, in addition to the appropriate sales contracts/agreements, this can incur Capital Gains Tax and stamp duty. Ensure that you speak with an accountant if you’re looking to establish a trust and transfer existing property.
Can People Under 18 Be a Beneficiary?
Yes, but you should be aware that if a trustee distributes income to someone under 18, they will be subject to a substantial amount of tax.
Can a Trustee Also Be a Beneficiary of a Trust?
Yes, a trustee can be one of the beneficiaries of a trust. For example, an individual could set up a trust, appoint themselves as trustee and distribute income to their family. However, a trustee cannot be the sole beneficiary of a trust. This is because they would legally own property for the benefit of themselves, which is problematic from a legal perspective.
Can Beneficiaries Claim Distributions?
Beneficiaries do not have a claim to any trust distributions. Rather, there is a ‘mere expectancy’ that the trustee may distribute income if they choose. Hence, the term ‘discretionary’ trust.
A beneficiary can request that the trustee act in a particular way through a document known as a memorandum of wishes. This document can outline an arrangement that the beneficiaries may like to have in place. However, as the name suggests, it is merely a ‘wish,’ than an order that the trustee acts a certain way. This is another important reason why you should only appoint a trustee that you trust.