Chan & Naylor BusinessEnterpriseTrust ™ (BET ™)

Chan & Naylor are pleased to introduce the Business Enterprise Trust for business Operators. 

1. What is it:
   The Business Enterprise Trust ™ was established to provide more efficient and effective operational and functional support for people operating a business. In essence the BET™ comprises of:

• A business specific Discretionary Trust
• No vesting date
• Lineage clause
• Individuals or partners running a business
• Business operators wanting improved Asset Protection and Estate Planning
• Business operators with multiple Clients and Staff
• Business operators working solely within one family group
• Business operators who may or may not have or are considering business partners.

2. Who can use it: 

• Individuals or partners running a business
• Business operators wanting improved Asset Protection and Estate Planning
• Business operators with multiple Clients and Staff
• Business operators working solely within one family group
• Business operators who may or may not have or are considering business partners.

3. Who cannot use it:

• Business operators who cannot show they are in a true business and cannot pass either the Personal Services Income Test or the Personal Business Income Test. 

4. How it works:

• The BET™ operates the day to day business operations
• Any assets would normally be owned outside of the BET™ and leased to the BET™
• The BET™ would pay expenses, purchase goods, and services, employ staff and lease any premises and/or plants and equipment and operate the bank account etc.
• The BET ™ is registered for tax (TFN) and GST (ABN) and would prepare necessary compliance in relation to Tax Returns, Business Activity Statements and Employee Payments.
• The BET ™ would have a corporate trustee
• The BET™ would distribute trust income at the end of each period to nominated beneficiaries who would be taxed at their individual marginal tax rates.
  
  
  • Flexible distributions to nominated beneficiaries
  • On sale of the business, the beneficiaries would be entitled to 50% CGT General Discount

5. Advantages:

• Flexible distributions to nominated beneficiaries
• On sale of the business, the beneficiaries would be entitled to 50% CGT General Discountand Small Business Concessions after meeting normal taxation rules.
• An effective structure to pass income trapped as working capital to a corporate beneficiary if at a lower tax rate than beneficiaries with some benefits in relation to Division 7 A issues on these distributions.
• Allows for the entry of a new business partner. They would set up their own BET™ and then the two would operate under a Partnership of Trust Agreement (which Chan & Naylor can arrange).
  Benefits include:
• Passing down of any trading losses
• Access to Family Trust Election provisions
• Flexible allocation of business partners rights and distributions 
• Ability to pay partners distributions ( when a Partnership Of Trusts is in operation ) to another trust with losses via a Family Trust Election
• Chan & Naylor provides full documentation including the Business Enterprise Trust™ , completion of the various Registrations, full compliance reporting including accounting and taxation.

General Disclaimer: Each business’s circumstances differ and the BET ™ may or may not be appropriate for your circumstances. Please do not act on this information paper without first seeking specific advice which you can receive by contacting Chan & Naylor on 1300 250 122 or email info@chan-naylor.com.au . We will be happy to schedule an appointment with one of our consultants to review the appropriateness of the BET ™ for your circumstances.

The Business Enterprise Trust ™ is copyright and Trade Marked to Channay Pty Ltd

www.chan-naylor.com.au