What is a Public Officer?

The rule that a company must have a public officer doesn’t come from the main company law, which is the Corporations Act 2001. Instead, it’s a tax rule. According to Section 252 of the Income Tax Assessment Act 1936, every company that does business in Australia or makes money from property in Australia needs to have a public officer. This public officer represents the company for all tax-related matters. The company itself, or someone with the proper authority from the company, must appoint this public officer.

Is it necessary to have a ‘Secretary’ within a company in Australia?

a company is not required to have a secretary, but it if it does, then that secretary (or at least one of them if there is more than one secretary) must ordinarily be a resident of Australia. Refer S.204A.

Can I set up a company in Australia with only Foreign Directors?

No. At least ONE director has to be resident in Australia. Refer S.201A of the Corporations Act 2001.

What is Director ID Number?

A Director ID Number is a unique number given to an existing or intending director who has verified their identity with the Registrar. It is available via the Australian Business Registry Services (ABRS) website.

A director ID is issued to a person forever.
A person will keep their director ID even if they stop being a company director, change their name or move interstate or overseas.
Director ID is being introduced to provide traceability of a director’s relationships over time, and across companies, to assist regulators and external administrators to investigate a director’s involvement in what may be repeated unlawful activity, including illegal phoenix activity.
Both existing and new directors will need to apply.

What are the Tax Benefits of an Account Based Pension (ABP)?

Tax Benefits of an ABP

Typically, any investment income or capital gains accumulated in a pension account, such as an Account-Based Pension (ABP), are not subject to tax. This means that the returns generated from the assets within the ABP are tax-free.

However, it’s important to understand that there are exceptions. Certain types of income, including taxable contributions and dividends from some private companies, remain taxable even when they are earned through a pension fund.

What should individuals consider when planning for tax implications with a Testamentary Trust?

To maximize tax benefits in Testamentary Trust, individuals should:

Structure the trust to legally reduce generational wealth taxes.

Structure the trust to legally reduce generational wealth taxes.
Carefully select beneficiaries to optimise capital gains tax distribution.
Work with an accountant well-versed in trust tax outcomes.

How does a Testamentary Trust impact Centrelink benefits for beneficiaries?

Maximizing Centrelink Benefits: Testamentary Trust Impact

If a beneficiary has control over the trust, Centrelink may consider both the trust’s assets and income as belonging to the beneficiary, potentially affecting their eligibility for Centrelink benefits. The trust’s control and the “control test” are factors in this assessment.

What are the disadvantages of setting up a Testamentary Trust in terms of costs?

Costly Pitfalls: Testamentary Trust Setup Downsides

Establishing a Testamentary Trust typically incurs higher initial costs compared to a simple will, ranging from $2,500 to $5,000. While there are no ongoing costs until the Testamentary Trust is activated upon the will-maker’s death, it is important to be aware that there will be associated administrative costs for preparing annual tax returns once it is activated.

What are the tax advantages associated with Capital Gains Tax (CGT) and Testamentary Trusts?

Maximize Wealth: CGT & Testamentary Trust Tax Benefits

Testamentary trusts offer potential benefits related to CGT. Capital gains can be distributed to beneficiaries with a potential 50% CGT discount, even if the assets were held for less than 12 months by the trust, provided the original owner held them for at least 12 months.