Trust account

Hi All

I am working as a doctor and my earning goes in a company account from where my wife get paid a salary.
Rest of the money I get at end of year. Company has to pay super on my income which is going over 25K.

My accountant suggested me to open a trust account for which company would be main trustee. So I can distribute the income between me and my wife to prevent excess money going to super.

Any thought shall be appreciated

Rob

Rob,


If your 9% is taking your compulsory SG contributions past $25,000 it suggests you are drawing as salary more than $277,777,78. However, SG is not required to be paid (in the 09/10 financial year) on salaries beyond $40,170 per quarter ($160,680 annualised). So one option may be to simply stop paying so much super.

Secondly a company can pay you dividends (franked or otherwise, at any stage during the year not just at the end) as an alternative to salary and not attract an SG liability. You could potential make extra Super contributions should you wish to as Non-concessional contributions attracting no tax.


You need to get some advice regarding the Super options from a licensed adviser if your accountant does not have a financial services license.

The trust solution may work to save you some tax but you need to be carefull of falling foul of part IVa of the tax act which discusses anti avoidance when you set up the trust. You will need to be carefull your restructuring does not look like it is being done for tax evasion.

Regards
Jason

www.dolfinwise.com.au

Note: This is general information only and not personal advice taking into accoutn all of your individual circumstances. You should seek professional advice before acting based on the information provided.