We love a good trust story and this one is one of the best examples we can think of. 

Background

Our clients (in their 70's) had been running their trust for years for share investment.  The husband (let's call him D) decided on 10 September 2001 to sell his entire share portfolio as he was concerned that the share market could not keep increasing.  We all know what happened on September 11 and he is the only client in the 30 June 2002 (FY02) financial year that had a massive capital gain.

Solution

We met with them prior to the end of FY02 to resolve tax planning actions for the year.  During the discussion, we ascertained that they had one granddaughter that was at university full-time, and we resolved that by distributing a certain amount to her in that year they would save $22,000 in tax.  D discussed the situation with her and received her consent to make the distribution to her.

They then wrote out a cheque for $22,000 and gave it to her to buy a new car, a win-win for everyone.  This is a great example of the use of family trusts for the benefit of the family.

Disclaimer: This information is general in nature, and this is a complex area of law, and you should examine your eligibility for these concessions carefully under the criteria set out in the legislation, so before acting it is important to seek professional advice related directly to you and your circumstances, contact your Primarius team leader, or email us at info@primarius.net.au if you require assistance.