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Very helpful mate! Many thanks for the insight :-)

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TechSF

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02/04/17

13:01

Post #: 23797527
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Very helpful mate! Many thanks for the insight

Originally posted by magpieagogo ↑

Hi TechSF. There are a few problems with your assumptions. You'll need to see an accountant to get proper advice.

Any income (be it realised gains or divs) will be taxed in the hands of those who receive it as a distribution. It can be beneficial to split that income over beneficiaries, but it depends on their other income sources. I can only make assumptions, but if your wife say was not working, you could probably distribute up to the threshold quite effectively. If she were to be on the same marginal rate already, then there maybe fewer benefits.

Corporate tax rate isn't really relevant if you're distributing to family. If you are distributing to a company you may be able to utilise the corporate tax rate - but you lose any CGT discount.

On kids, if the kids are under 18 you can't use the tax free threshhold, as it is not exempt income (basically because they haven't earned it). You likely could only distribute $416 before the highest marginal rate is applied. The ATO website is very good for this info.

Other considerations might be the extra expense or admin associated, and maybe higher borrowing costs if that's relevant.

Hope this helps and good luck!

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