Trusts, trusts, trusts.
It’s all we talk about here at Paris Financial.
Despite the fact that they can get very complex with trustees, laws, beneficiaries and appointers, we continue to love them.
And there are definite reasons why we recommend trusts over companies, individuals and partnerships.
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Asset protection.
If you own a small business, you will either have growth assets now, or you will sometime in the future. These assets should never be held in your own name.
When you hold your growth assets in your own name, you risk losing all of their worth if something goes wrong in your business. It is not a risk worth taking.
Put your assets in a trust, and you can be completely safeguarded.
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Capital gains tax.
All small business owners know that they are likely to sell their business sometime down the line. Planning ahead for that day is crucial.
If you sell a small business in a trust, there is a good chance that you will pay no capital gains tax. Other structuring alternatives could see you paying hefty dollars for the sale.
This is a major advantage of using a trust.
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Income tax.
With trusts, you can distribute to lower income earners in the family. This can include personal partners, kid over 18, and kids under 18.
It is a good way to spread the love around, and it is best done within a trust structure.
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Land tax.
Finally, property investors will reap major benefits from a trust. If it is all managed correctly, land tax within trusts can actually reduce your overall tax.
Our tax champions will never stop advocating for trusts. As small business accountants, we can fully appreciate their value for hard-working business owners. Regardless of whether you do or do not have investments, trust structures are the best way to safeguard your wealth and set you up for a strong future.
All signs point to a trust!
If you still need convincing, you can join one of our tax champions at Paris Financial for a free initial consultation.
