Business Enterprise Trust™ (BET™)

The Business EnterpriseTrust™ (BET™) is specially designed for small to medium business operators.

Follow the links below or scroll down for more information on BET™

 

If you would like to discuss your asset protection requirements and how the  Business Enterprise Trustt™ may be a solution for you, then please:

 


What is BET™?

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.

Who can 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.

Who cannot use BET™?:

  • 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.

How BET™ 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

Advantages of BET™:

  • Flexible distributions to nominated beneficiaries
  • On sale of the business, the beneficiaries would be entitled to 50% CGT General Discount and 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.

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