Trusts and Structuring
You set this up years ago and haven't looked at it since. Neither has anyone else.
A trust is only doing its job if it still matches the business you actually run today, not the one you had when it was first set up. As the business has grown, changed direction, or taken on new risk, the structure underneath it may not have kept pace, and that gap is usually invisible until it costs you: at tax time, in a dispute, or when it’s time to sell. We review, build, and manage trust structures for business owners who want to know their setup is still doing what it’s supposed to, not just sitting there because nobody’s revisited it.
Family Trusts
A family trust isn't just a tax structure. It's a decision about who controls the business, and when.
Most business owners who set up a family trust did it for the tax flexibility, splitting income across family members, and stopped thinking about it there. But a trust also determines who has control if something happens to you, how the business gets divided if a marriage breaks down, and what happens to the business assets when you’re no longer the one making the decisions. If nobody’s walked you through those parts, you’re relying on a structure you don’t fully understand to protect the thing you’ve spent years building.
Types of Trusts in Australia
Discretionary, unit, or hybrid: the wrong one doesn't just cost you tax efficiency, it can lock you into decisions you can't undo.
Different types of trusts in Australia serve genuinely different purposes, and the one your business ended up with often depended more on whoever set it up first than on what actually suited your situation.
Discretionary (Family) Trusts
The most common structure for family-run businesses, giving the trustee flexibility to distribute income and capital among beneficiaries each year. That flexibility is valuable, but it also means the structure needs active management, a trust that’s never had a properly reviewed distribution resolution is a trust with an unnecessary tax risk sitting inside it.
Unit Trusts
Used where beneficiaries hold fixed, defined entitlements rather than a discretionary share, common in joint ventures or where unrelated parties are investing together and want clarity on exactly what they own.
Hybrid Trusts
Combine features of both, offering flexibility for some beneficiaries and fixed entitlements for others. These are less common, more complex to administer, and worth a genuine conversation before choosing this route rather than defaulting into it.
Structuring for Where the Business is Going
The structure that worked when you started might be quietly costing you now.
A trust set up for a single-owner business with one income stream doesn’t automatically still fit a business with employees, multiple revenue lines, or a partner who’s since come on board. As the business changes shape, the structure around it needs to change with it, not get patched around the edges every time something new comes up. This overlaps closely with the accounting and tax structuring work we do more broadly, since a trust review rarely happens in isolation from the rest of your business’s tax position.
Our Process
1. Structure Review
Different types of trusts in Australia serve genuinely different purposes, and the one your business ended up with often depended more on whoever set it up first than on what actually suited your situation.
2. Identify Gaps
The most common structure for family-run businesses, giving the trustee flexibility to distribute income and capital among beneficiaries each year. That flexibility is valuable, but it also means the structure needs active management, a trust that’s never had a properly reviewed distribution resolution is a trust with an unnecessary tax risk sitting inside it.
3. Ongoing Management
Used where beneficiaries hold fixed, defined entitlements rather than a discretionary share, common in joint ventures or where unrelated parties are investing together and want clarity on exactly what they own.
Discretionary Trusts
The flexibility that makes a discretionary trust useful is the same thing that makes it easy to get wrong.
A discretionary trust gives the trustee the power to decide who receives income and capital each year, which is exactly why it’s the default structure for so many Australian businesses. But that discretion has to be exercised properly and documented correctly every single year, a distribution resolution that’s late, vague, or copied from last year’s template without review is a trust exposing itself to ATO scrutiny it doesn’t need to invite. We manage that annual process properly, not as an afterthought squeezed in before June 30.
Taxation of Trusts
A trust doesn't pay less tax by existing. It pays less tax when it's managed properly.
Trusts themselves aren’t taxed the way companies are, income gets distributed to beneficiaries and taxed in their hands instead. That’s the appeal, but it only works as intended when distributions are resolved correctly, on time, and reflect what actually happened financially during the year. Get any of that wrong and the tax office can tax the trust itself at the top marginal rate, which defeats the entire point of having one. We handle the trust’s tax position as part of the same ongoing relationship we handle your business accounting, not as a separate box ticked once a year.
Trusts Act 2025
The rules changed. Has anyone told you what that means for your trust?
Trust legislation doesn’t stay still, and a structure that was compliant and effective five years ago can be sitting on outdated assumptions today. Recent legislative changes affecting how trusts operate mean older deeds and structures set up under previous rules may need a genuine review, not just a rubber stamp, to confirm they still do what they were built to do. If your trust deed hasn’t been looked at since it was first drafted, that review is overdue.
Benefits of Family Trusts
Asset protection, tax flexibility, and succession, in that order, is usually the wrong way to think about it.
Most conversations about family trusts start and end with the tax benefit, but that’s often the least important reason to have one. A properly structured trust protects business assets from risks in other parts of your life, gives you flexibility to manage income as the business and family circumstances change year to year, and can be the mechanism that makes it possible to hand the business to the next generation without triggering a tax event that undoes years of planning, work that connects directly with how we approach succession planning when that transition is on the horizon. Tax efficiency is real, but it’s a byproduct of getting the structure right, not the reason to have one.
Common Structuring Scenarios
Accountability isn’t a personality trait, it’s a system. Here’s what that system actually needs.
Growth
Outgrowing the current structure
Adding Partners
New ownership, new questions
Succession
Structured for a clean handover
Asset Protection
Knowing what's exposed
Growth
As revenue and complexity increase, the structure that worked for a smaller business can start creating more admin and more tax than it needs to. We review whether it’s still fit for purpose.
Adding Partners
Bringing in a partner or co-owner raises real structuring questions: how ownership is split, how decisions get made, and what happens if someone wants out later. Getting this right upfront avoids disputes down the track.
Succession
Handing the business to family or an internal successor works best with a structure built for it. We review yours alongside our Succession Planning service.
Asset Protection
Trusts and structuring decisions play a direct role in protecting personal and business assets from risk. We help you understand exactly what’s protected, and what isn’t.
Frequently Asked Questions
How do trusts work in Australia?
A trust is a legal arrangement where a trustee holds and manages assets or income on behalf of beneficiaries, according to the terms set out in a trust deed. For businesses, this usually means the trustee (often a company you control) manages the business and its income, and distributes that income to family members or other beneficiaries each year. The trust doesn't own itself in the way a company owns itself, it's a relationship and a set of obligations documented in the deed.
What are the different types of trusts in Australia?
The main types used by businesses are discretionary (family) trusts, which give the trustee flexibility over distributions, and unit trusts, which give beneficiaries fixed, defined entitlements. Hybrid trusts combine features of both but are less common and more complex to run. The right one depends on who's involved and what you're actually trying to achieve, not just which one a template defaulted to.
Is a family trust still worth it after the recent legislative changes?
For most businesses, yes, but "still worth it" depends on whether the trust is actually being managed properly under the current rules, not just left as-is. A trust that hasn't been reviewed since the Trusts Act changes may be relying on assumptions that no longer hold, which is exactly the kind of gap worth checking rather than assuming it's fine.
Do I need a trust and a company, or just one or the other?
Many businesses use both, a corporate trustee (a company) that controls the trust, giving you the liability protection of a company structure with the tax flexibility of a trust. Whether that's the right setup for you depends on the size of the business, the risk involved, and what you're trying to protect, which is exactly the kind of question worth a proper conversation rather than a default answer.
How much does it cost to set up or restructure a trust?
Costs vary depending on whether you're setting up a new structure or restructuring an existing one, and whether that involves establishing a corporate trustee alongside it. We provide clear, upfront pricing once we understand what you actually need, rather than a flat one-size-fits-all fee.
Take the Next Step
Get Started With a Trust Structure Review
If your trust was set up once and never looked at again, that’s worth changing before it becomes a problem rather than after. Book a free strategy session and we’ll talk through what your current structure actually looks like and whether it still fits the business you’re running.