Compare documents

TA 2003/1currentchange

Distribution to Superannuation Fund from Interposed Fixed Trust This Taxpayer Alert describes an arrangement where a taxpayer establishes a fixed trust to distribute business profits to the taxpayer's superannuation fund. This is done in an attempt to access the concessional tax rate of 15% on the distribution and at the same time avoid the age based deduction limits and superannuation surcharge.

DESCRIPTION

An existing business is operated under a trust, partnership or company structure, or a new business is established within a trust structure. 2. For an existing business, modifications are made to the trust deed and a fixed trust is established as a beneficiary of the trust. Alternatively, the partnership or corporate business structure is replaced so that the business is now operated through a trust. 3. A fixed trust is also then established as a beneficiary. 4. The operating trust distributes a substantial amount of income to the fixed trust. 5. The fixed trust then makes an equivalent distribution to a superannuation fund. 6. The superannuation fund is purported to be taxed at the concessional rate of 15% on the distribution from the fixed trust. 7. The members of the superannuation fund are the owners of the business and other family members.

Choose document B