As a medical professional in Australia, you’re always looking for ways to manage your finances effectively and minimise your tax liabilities. One tool that can help you achieve this goal is a family / discretionary trust.
Here are the top 5 reasons why medical professionals should consider setting up a trust:
When is a family / discretionary trust best used?
It can be particularly beneficial if you have a family business or investment portfolio, as it allows for tax-efficient income distribution. A family / discretionary trust can be a powerful tool for medical professionals looking to manage their tax liabilities and protect their assets.
It’s important to note that there are also tax implications to consider when setting up a family / discretionary trust. While income distributed to beneficiaries is taxed at their individual tax rates, any income retained in the trust is taxed at the highest marginal tax rate.
Some Tax implications to watch out for:
Operating through a company doesn’t automatically lead to lower taxes. Many doctors mistakenly believe that operating through a company will result in reduced tax payments. However, this assumption is not necessarily true. Below are some implications that you need to watch out for:
While there are many benefits to setting up a family / discretionary trust, it’s important to keep in mind that they can also be complex and require ongoing management and compliance. If you are considering setting up a trust, it’s important to seek advice from a professional accountant or financial advisor who can help you navigate the complexities of trust law and taxation and ensure that it is the right approach for your individual circumstances.
At Aero Accounting Group, we specialise in helping medical professionals setup and manage their family and discretionary trusts. Contact us today to learn more about how we can help you achieve your financial goals and manage your tax liabilities effectively.
Not sure if your current accountant is a good long-term fit? Contact us at Aero Accounting Group today and we’ll help you minimise your taxes and maximise your profits