Family trusts being stimulated by lower contribution limits

With the continuation of low limits on amounts that can be contributed to super, notwithstanding the pleasing but small increase taking effect for some clients from 1 July 2013, family trusts might be a useful alternative structure for longer term investing.

Although not as tax effective as superannuation, family trusts trade tax efficiency for far greater flexibility. 

In addition to their asset protection benefits, particularly useful to business owners or professionals, family trusts offer more options for managing tax bills across a family unit compared to the traditional approach of owning assets in the name of the lowest rate tax payer. 

Family trust deeds typically provide the trustee wide discretion to pay out income and capital to different beneficiaries of the trust from year to year, taking account of the different situation and needs of the family members from year to year.

For those who desire the flexibility to access to funds earlier than permitted from super but wish to build their family wealth over the long-term in a tax effective manner it may well be worth considering using a family trust in addition to super.

If you think you might benefit from advice on ways to protect and build your wealth, please don’t hesitate to give us a call.  Our Partner – Wealth Consulting, Michael Rees-Evans CFP®, can be reached on our office number at top right of this page, or by email at michael.rees-evans@lockwood.com.au.

Important note: this information is of a general nature and has been prepared without taking account of anyone’s financial situation, objectives or needs. Before making any investment decisions based on the contents you should obtain professional advice.

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