Formation of your Trading Trust

As with a family trust, your trading trust allows you to protect your assets and can be used for income splitting which provides you considerable tax savings. A trading trust differs from a family trust however, in that it has a corporate (company) trustee.

If you would like a tailored consultation with Garth Melville (the managing director) to gain valuable beneficial advice for your personal or company structure, trusts and/or tax options to suit your circumstances, please complete the simple form below and we will get back to you ASAP.
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CORPORATE (COMPANY) TRUSTEE
Rather than having several named trustees, the sole trustee of a trading trust is a limited liability company. Instead of taking trustee positions in their own name, the trustees of your trading trust become directors of your trustee company. This links your trust structure with a company structure, providing the advantages of full limited liability protection for your business and also personally for the individual trustees. In addition to tax advantages, you also gain the ability to trade with your company using a name that is completely different from your trust. ASSET PROTECTION AND INCOME SPLITTING
Setting up your trading trust allows you asset protection and income splitting.

When you put your business assets into a trading trust, you effectively reinforce the limited liability that comes with a business structure, the benefits of which include:

• Increasing your asset protection.
• Further limiting your personal liability.

When you pay your principals - i.e. the directors of your company - by way of salary, you attract levies on that salary such as ACC. Your trading trust allows you alternatives such as the ability to pay all profits by way of beneficiaries’ income; thus you avoid such levies. Note: it may be preferable to independently insure against this risk. Depending on your company and trust structure, your trading trust can often allocate income to various beneficiaries in a more effective way than the example above. IS A TRADING TRUST RIGHT FOR YOU?
While a trading trust suits most types of trading businesses and services, some business types (such as those in which income is from an individual's own personal exertion) may not suit a trading trust structure. This precludes you, for example, if you are a sole practitioner using your own personal exertion and selling time rather than selling goods. There are however business structures available that may be of use to people trading in these circumstances. Whatever your trading trust or business structure needs, Company Solutions Ltd. are the experts to turn to for friendly and effective guidance.

For more information or to further discuss your requirements, please feel free to contact us.