After receiving his trade certificate and gaining some valuable experience as a sub-contractor, Les decided to start his own plumbing business …..

Les is a plumber

Les seeks advice from his accountant and decides to set up a trust to allow for future tax planning and splitting of income.

To save costs associated with the setup, Les chose himself as trustee instead of a company, or corporate trustee.

A trust structure provides greater scope

After 2 years of independent contract plumbing work Les is offered a substantial plumbing contract for a unit development with 70 units. The contract would require him to supply all plumbing materials and engage a team of plumbers.

A trust structure also provides greater scope for further tax planning by interposing other entities, eg company or trust, as a beneficiary.


Les immediately realises that he needs to review his trust structure and replace himself as trustee with a company.

In doing so he can retain all his current ATO registrations, bank accounts and other business related contracts.



A Bit Messy

By Resolution – The schedule in the deed still shows the original trustee. A minute records the resignation and appointment. Any future financial or contractual arrangements must include the original deed and the minute – A bit messy.

A Cleaner Method

Deed of Variation – This is a separate legal agreement that varies the original trust deed. The deed of variation forms part of the documentation of the family trust and details how the trust deed has been changed.  This is a cleaner method and one that most businesses will understand.



Stories From The Trenches – Business Principles

Today I want to share a brief story of a young couple operating a business. It is a real story about real clients that highlight planning principles in small businesses. Case Study Some years ago, a young couple operating a business asked me to look after their tax...

Small Business Statistics and Activity In Australia

Each year, the Australian Small Business and Family Enterprise Ombudsman (ASBFE ) release a statistical report that helps "...create a picture of small business in Australia and its contribution to our economy." The ASBFE says "Small business and family enterprise in...

Business Partners Non Related Parties Case Study

BUSINESS PARTNERS CASE STUDY THE PARTNERS ARE NON RELATED PARTIESJoe and Adam are plumbers who have both worked together on various construction sites....Long Term Friendship Joe and Adam have been building a great long term friendship over the years and decide to...

Trust with Corporate Trustee Incorporating Corporate Beneficiary Case Study

TRUST WITH CORPORATE TRUSTEE CASE STUDY INCORPORATING A CORPORATE BENEFICIARY   Steven is self-employed in the civil construction earth moving industry and he is operating as a sole trader....     Steven is a Single Dad   Steven is single and has...

Tax Benefits of FBT For Companies and Trusts

Fringe Benefits Tax (FBT) legislation was introduced in 1986 to capture tax revenue on certain employee "non cash" benefits. For example, FBT will capture the private use by employees/directors/associates of a “company” non-commercial vehicle. However, tax savings can...

Tool Kit For Starting a Business

Companies Direct has developed a kit for starting a business that has helped thousands of people. It covers topics like: What steps are involved; What business structure to use, How to get started on the right foundations; and It will potentially save you from costly...

Pin It on Pinterest

Call Now ButtonCall us