TRUSTS have long been regarded as business structures and tax-planning vehicles for the wealthy. However, in fact there are a number of compelling reasons why ordinary businesses should set up trusts to protect their investments, to carry on normal trading activities, and to use trusts as vehicles to acquire property assets. The most compelling reason to establish a trust is to have a structure that has more business flexibility than traditional companies and partnerships. Discretionary trusts also have considerable taxation benefits in that the powers contained in the trust deed can specify that the trustee has the discretion to allocate income to each or any of the beneficiaries in accordance with the trustee's discretion. This creates substantial tax-planning benefits as income can be directed to beneficiaries who have lower rates of tax.
展开▼
