Hidden Risks in Old Trust Deeds—Find Out If You're Affected
Many older trust deeds lack essential provisions for tax-effective distributions. If your deed doesn’t allow income streaming, you could be missing out on significant tax benefits.
In this short video, Ross Millen explains how trust deeds impact taxable income and what you can do to ensure your trust is working in your best interest.
✔ Find out if you can stream income for tax advantages
✔ Simple amendments to make your trust more effective
Watch now to protect your assets and maximize tax benefits.
Need expert advice? Contact Ross Millen or any of the Millens staff for a trust review today.
VIDEO TRANSCRIPT
Ross Millen:
Hi. Last video I was talking about trusts, and I want to point out some of the other problems that can arise with trusts, particularly old trust deeds.
Now, old trust deeds just might say you can distribute income to beneficiaries, but what is income? Well, there's income according to ordinary principles, money that's generated out of a business or rent. But sometimes you can have income for tax purposes, which is a taxable capital gain. And sometimes old trust deeds don't distinguish between taxable capital gains and other types of income.
So as you know with a taxable capital gain, people are entitled to a 50% discount. Now, do you want to keep the character? How can you do a distribution where you distribute perhaps the capital gain out to one beneficiary who's got some capital losses and you want to distribute the other normal income out to another beneficiary? Now, if your trust deed allows what's called streaming, so you can send the different incomes down different streams, great, fine. But older trust deeds sometimes don't do that.
So if you've got some problem with your trust deed and you want us to have a look, we can let you know if it permits streaming or not. And if it doesn't, then we've got an amendment that you can amend your trust deed, after reading the trust deed and making you follow the amendment rules that are set out in that, to include streaming. So this means that one type of taxable income can go to one beneficiary and another type of taxable income can go to a different beneficiary, to give you a legitimate tax planning advantage.
So remember, if you've got particularly an old trust deed, let us have a look at it. We can let you know, obligation-free, whether it has streaming or not. And if it doesn't have streaming, we can give you the amendment you need to make your trust more tax-effective. So remember to contact me, Ross Millen at Millens, if you've got any questions about your trust deeds.
