Here’s a reply to a question that came through from the contact form From Grant
“Can you explain what family trusts are about and how/if they can benefit a small family (no kids)?”
There any many variables you will need to consider but I’ll give a general overview.
To make a family trust it costs around $1000, so if your your not going to save more than that, there’s really no point.
To be effect the income source needs to be over about $30,000 as long as only one person is making money. A vital factor is Personal services income or PSI which must be below 80% meaning that all the income has to come from more than 80% from one source.
A family trust is ideal for a service skill such as a plumber or lawyer as they serve many different clients and do not work for a company.
The benefits are that is the husband earns $50,000 and spouse earns 0 than they can split the income between the two.
EG. Person on $50,000 would pay $8850 in tax.
Where as two people on $25,000 each would pay $2,850 each or $5,700
Thus a saving of 8850 – 5700 -$1000 for the trust costs = $2150 saving per year.
If you did have kids, it can help the situation even more saving an each $400-$600 depending on your tax bracket.
If this sounds like you, see your tax agent to get more advice.
If anyone picks up that i have missed something above comment below or contact us.