A discretionary trust is a structure established to hold property for the benefit of other persons commonly known as beneficiaries who have no fixed entitlement or interest in the trust funds. A discretionary trust is governed by the terms of the trust deed and the trustee is the legal owner of the trust property.
Discretionary trusts generally have the power to determine which beneficiary will receive payments from the trust. In addition, the trustee can select the amount of trust property that the beneficiary receives.
Discretionary trusts still serve a useful function
> Asset protection – as no one individual is the owner of the assets held in a discretionary trust then property held by a trustee cannot be taken by a creditor
> Estate Planning – to hold assets for future generations of the same family
> Tax Planning – under current laws beneficiaries pay income tax at their marginal rates and since the trustee has the power to choose which beneficiary should be paid they may select the beneficiary with the lowest marginal rate
A discretionary trust is required to a tax file number (TFN) and where relevant an Australian Business Number (ABN) or GST registration. The trust deed specifies the powers of the trustee which are generally sufficient to manage the trust in an orderly manner.
As the legislation that governs discretionary trusts is often subject to parliamentary review a regular review of trust deeds is warranted to ensure that the structure is adapted to changes that effect business and family circumstances.
Please note: Prepared by Leigh Barker Tangible Assets, MWC Group, Accountant, Portfolio Finance, Gordon and West Pennant Hills. Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.
A bookkeeper is the person who records day to day financial transactions such as sales, purchases, recepts, and payments for individuals or organisations. The bookkeeper is responsible for making sure that all transactions are properly recorded in the general ledger, the sales ledger, the purchases ledger, the inventory ledger and the asset register.
A bookkeeper requires accounting and mathematical skills to carry out the task of balancing financial records. The bookkeeping process records the financial effects of transactions. As a document is procedures each time a transaction occurs, the bookkeeper records the details of all source documents into the various ledgers and brings the books to the trial balance stage.
At the end of a designated period each journal is totalled to provide a summary for that designated period. The bookkeeper will check that all posting have been done correctly and balanced. Thus the bookkeeper will maintain a complete set of books, retain records of accounts and verify the procedures used to record financial transactions.
The duties of a bookkeeper include establishing and maintaining accounting records through a bookkeeping system, posting general journal entries, reconciling accounts, the preparation of a trial balance, running the payroll, paying supplier invoices, completion of workers compensation documentation, completion of regulatory documentation.
A capable bookkeeper can handle a constant stream of data and deal with unexpected issues or events. As a bookkeeper is required to interact with others in the business they must also have people skills.
A bookkeeper is an integral part of every business.
Please note: Prepared by Leigh Barker Accountant at MWC Group, Tangible Assets, Portfolio Finance, Gordon and West Pennant Hills. Note that all content of this blog is general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.