By David Harland – Family Business Advisor
Family trusts are a critical succession and estate-planning tool for family businesses, which often use them to avoid large tax bills. However, current laws (in most states) cap the age of family trusts at 80 years. On the vesting day of the trust, beneficiaries may be hit with large capital gains taxes. This complicates business planning and structures for families with existing trusts.
Most family business advisors agree that the current limitations on family trusts are arbitrary and lack logic. One of the goals of the current Senate Inquiry into Family Business in Australia is to explore this issue (among many others) and gather information.
For more information on the current debate surrounding family trusts, we recommend this article by BRW.
While trusts and tax planning are important issues to be considered by family businesses, they are only part of an integrated business strategy. Ultimately, what matters is that families are working in an integrated way with the next generation to build wealth, harmony and durable family businesses.
To find out more about Family Trusts and Succession Planning, contact FINH today 07 3229 7333