Unit trust is taxed at the hands of the receipients, which gives you flexibility in shuffling the tax burden - whereas a company is simply taxing income equally and distributed to shareholders without consideration for their individual tax situation. So for example, you could distribute overseas income to your non-Australian business partner and avoid tax legally (as it's a non-resident deriving non Australian sourced income; under a company this would be taxed as it's a resident for tax purposes and therefore the income is assessable) and you could distribute up to 6k to several people in your family who don't work as that will be tax free due to the personal threshold (again, under a company, that'd receive the post taxed dividends). In terms of capital gain, this is included in an individuals personal tax situation (CGT does not occur at a partner level for example; it occurs at the marginal rate of tax at the individual level). So going on the above example, you can distribute overseas gains to non-Aussie residents to avoid paying tax, etc.
Also, with CGT on individuals & trusts they get a better discount (50%) than companies when calculating the gain (companies don't get the discount). There's another method called indexation when determinining what the capital gain is, but this only applies to assets pre 1999, and which is equal across the board - so no difference between trusts and companies under that method. I wouldn't point this out for startups as it's more a case for longer term businesses, but for completeness of knowledge, small businesses get a series of discounts on CGT. http://www.ato.gov.au/businesses/pathway.asp?pc=001/003/089/001/007&mnu=&st=&cy=1&mfp= I hope that helps. Elias Bizannes Mobile: +61 412 338 508 E-mail: [email protected] DataPortability.Org - SiliconBeachAustralia.Org Chat: Skype: elias.bizannes [image: Linkedin] <http://www.linkedin.com/in/eliasbizannes>[image: Facebook] <http://www.facebook.com/profile.php?id=501903123>[image: Flickr]<http://www.flickr.com/photos/liako/>[image: Twitter] <http://twitter.com/liako>[image: del.icio.us]<http://delicious.com/liako>[image: Blogger] <http://liako.biz> On Tue, Dec 23, 2008 at 12:26 AM, Simon Gilligan <[email protected]>wrote: > > Hi all, if you were setting up a new company tomorrow, would you > setup as a unit trust or company? Recent advice I've had is that a > unit trust is a better vehicle with better tax control over capital > gain. Is there any experience out there regarding this? > > > > -- Elias Bizannes http://liako.biz --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
