Great video Davie! I recently landed a new role in a small finance firm made of a wealth management and accounting/tax team. Seeing these structures can be super confusing especially when you don’t have experience, and I found your video super helpful. Loving this channel right now - Thank you!
i think the answer to question 1 is that without family trust, you can't necessarily distribute the profit to the bucket company and trading company without deemed as tax evasion if his question is just receiving profits in the bucket company, then it's not a bucket company, but a trading company
following on your comment around min 52 on 50% CGT discount when selling assets bought in a company by distributing it to individuals, so we can do this case when for instance we buy an investment property using a bucket/trading company, then sell it for a profit in the company and get 50% CGT discount if we distribute it to our own names? so in a way we buy as a company but sell as an individual?
I think part of the question and convo got edited out to remove my clients confidential info. So it’s abit confusing in this video. The 50 % discount can only be used if you sell the business via the shares of the company. This will enable the capital gain to be in the family trust then allows for the distribution to individuals and access to 50 % discount. If you sell assets in the company the CGT is trapped in the company and companies do not get the 50 % discount.
Just a bit confused. Do you pay 30% tax on the money going into the bucket, as well as the 25% you've paid on profits in the trading company? Therefore you've paid 55% in total?
@DavieMach Thanks! Would another possible option to simplify things be to just pay fully franked dividends (25%) to shareholders directly from the trading company, as opposed to having a trust & bucket set up? Would I be wrong to assume that main benefits from having a trust & bucket company set-up is primarily for an extra layer of asset protection and flexibility in dispersing dividends to individuals (trading company limited to shareholders, whereas trust/bucket can distribute to multiple beneficiaries)?
Great video Davie! I recently landed a new role in a small finance firm made of a wealth management and accounting/tax team. Seeing these structures can be super confusing especially when you don’t have experience, and I found your video super helpful. Loving this channel right now - Thank you!
Thank you! Congrats on the new role :)
It’s surreal to know people are watching my videos and they are helping others 😊
Do you transfer shares from an individual to a new trust with a corporate trustee in order to get from scenario 1 to scenario 3?
i think the answer to question 1 is that without family trust, you can't necessarily distribute the profit to the bucket company and trading company without deemed as tax evasion
if his question is just receiving profits in the bucket company, then it's not a bucket company, but a trading company
following on your comment around min 52 on 50% CGT discount when selling assets bought in a company by distributing it to individuals, so we can do this case when for instance we buy an investment property using a bucket/trading company, then sell it for a profit in the company and get 50% CGT discount if we distribute it to our own names? so in a way we buy as a company but sell as an individual?
I think part of the question and convo got edited out to remove my clients confidential info. So it’s abit confusing in this video.
The 50 % discount can only be used if you sell the business via the shares of the company. This will enable the capital gain to be in the family trust then allows for the distribution to individuals and access to 50 % discount.
If you sell assets in the company the CGT is trapped in the company and companies do not get the 50 % discount.
Just a bit confused. Do you pay 30% tax on the money going into the bucket, as well as the 25% you've paid on profits in the trading company? Therefore you've paid 55% in total?
@@GS-zm1mm you pay 30 % but you get a 25% franking credit so only pay a top up tax of 5%
@DavieMach Thanks! Would another possible option to simplify things be to just pay fully franked dividends (25%) to shareholders directly from the trading company, as opposed to having a trust & bucket set up? Would I be wrong to assume that main benefits from having a trust & bucket company set-up is primarily for an extra layer of asset protection and flexibility in dispersing dividends to individuals (trading company limited to shareholders, whereas trust/bucket can distribute to multiple beneficiaries)?
Huge assumption here on my part; due to his experience with dealing with people; he would always recommend flexibility as life can be a bitch
If you have kids in childcare, u definitely don’t want to pay yourself big money until they are in school due to subsidy that you receive😊