Friday, 25 January 2013

Maybe the Government should target family trusts

The ever interesting Michael Pascoe takes a look at tax avoidance via family trusts in Obeids' trust is the best ad for tax reform. He concludes with an interesting story:
A little while ago I had a chance social encounter with an accountant. As people will talk ailments with doctors, crime with police and scandal with journalists, chat fell to occupations and structures. The accountant was a little perplexed that I operate as a sole trader with no company structure, let alone a family trust.

He suggested I really should consider setting up a trust as I could save several thousand dollars a year in tax, after the initial set-up costs. He said I'd have no trouble meeting the three ATO legitimacy tests – the third of which was that the trust wasn't being set up to avoid tax.

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