Hi i am in the process of doing my due diligence for a business which has been in operation for about 3 years. I am wondering should i set up a family Discretionary Trading Trust first before i purchase the business? I have a family and 1 PPOR and 1IP want to purchase further IP's also but want to make sure business can sustain profits. My question is should i use a corporate Trustee for my Trading Trust as i also want to set up a HDT with Corporate Trustee also for future purchases.
Anyone heard from the ATO about the deductibility of interest from HDT. I am reading in the somersoft forums that there is a problem with the DEEDS and the ATO are not allowing deduction of interest 100%
any comment?
or should i hold back until ATO has ruled on HDT it could take a long time though!
A discretionary trust may be the ideal structure, and if so, yes you need to have it established prior to purchasing the business. Definitely need a corporate trustee to provide protection of your IP's & PPOR.
Interest deductibilty on HDT depends upon the deed and your accountants opinion…for certainty, get a private ruling.
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