re:correction on trust & tax
Just on trust the following point is incorrect and misleading. ___________________________________________ "It is common for trusts to make a company "presently entitled" to trust income without actually paying out the money. In this way, the trust can accrue income taxed at the 30 per cent corporate rate, which can be distributed via an asset revaluation to individuals who can avoid paying the 48.5 per cent marginal rate." ______________________________________
There is no problem with a trust making unpaid ditributions to a corporate beneficiary and individuals can withdraw funds that have resulted from the profit out of the trust to the extent that any loan account they have in the trust remains in a Credit Balance. As soon as the loan account goes into Debit balance there are tax consequences for the person receiving the funds.
As for having an unpaid distribution from operating/investment profits to a corporate beneficiary and distributing funds to individuals as a result of profit on asset revaluations - the ATO take a very dim view on this practice and has recently introduced measures to stop this practice, not to mention the potential of breaching the Part 4A anti avoidance provisions of the tax act
