Why you should get I Merhi & Co to lodge your trust tax returns
Trusts are widely used for investment and business purposes. A Trust is an obligation imposed on a person or other entity to hold assets for the benefit of beneficiaries. The trustee is responsible for managing the trust’s tax affairs, including registering the trust in the tax system, lodging trust tax returns and paying some tax liabilities. Beneficiaries include their share of the trust’s net income as income in their own tax returns.
Establishing a trust brings huge benefits:
- It can help pass and preserve wealth efficiently and privately.
- It can help reduce estate taxes.
- It helps gain control over distribution of your assets and income.
Australia recognizes the following different types of trusts:
- Family trust: Family trusts are relatively easy to set up and give trustees the discretion to decide who receives distributions, and how often payouts occur.
- Unit trust: Unit trust divides the trust property into units. Each beneficiary owns a given number of those units, and at the end of each year, he or she receives a distribution from the trust, based on the number of units held.
- Hybrid trust: Hybrid trust combines characteristics of both Family and Unit Trusts, whereby the trustee has the right to distribute trust income and capital among beneficiaries – like Family Trusts. However the income and capital is proportionally distributed – like Unit Trusts, based on the number of units each beneficiary holds.