A trust is an obligation imposed on a person – a trustee – to hold property or assets (such as business assets) for the benefit of others. These others are known as beneficiaries. Setting up a trust can be expensive, as a formal deed is required and there are formal yearly administrative tasks for the trustee to undertake. A trust deed outlines how the trust is to operate.

If you operate your business as a trust, the trustee is legally responsible for its operations. A trustee of a trust can be a company, providing some asset protection.

A trust must have its own TFN to use when lodging its annual tax return. If you are the trustee of the trust, you must apply for a tax file number for the trust.

If you carry on an enterprise as a trust in Australia, you need an ABN for the partnership and use it for all the trust’s business dealings. ABN is a single business identifier that allows businesses to deal with the Australia Taxation Office ( ATO) and other government departments and agencies with one identifier.

Goods and services tax, often known as GST, is a broad -based tax of %10 on the most goods, services and other items sold or consumed in Australia. GST applies to most Australian business and it’s highly likely that your business will be affected by tax. As a member of a Trust, you can apply for GST registration for the your business if it is carrying on an enterprise. if your business is registered for GST, you’ll have to pay to collect some extra money (one-eleventh of the sale price) from your customers and pay it to the Australian Taxation Office when it is due.
You must register for GST if:
• your business has a GST turnover of $75 000 or more
• your non-profit organisation has a turnover of $150 000 per year or more
• you provide taxi travel for passengers in exchange for a fare as part of your business, regardless of your GST turnover. This rule applies to both taxi owner drivers and people who just rent a taxi
You can register for goods and services tax (GST) if you carry on an enterprise.

Whether or not a trust is liable to pay tax depends on what type of trust it is, the wording of its trust deed and whether any of the income the trust earns is distributed to its beneficiaries.

Where the whole of the net trust income is distributed to adult resident beneficiaries, the trust is not liable to pay tax. The trust may be able to access some tax concessions.


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