Does a Trust need an ABN, ACN or TFN?

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Using a Trust and Trustee for your business may be the way you need to go to protect your personal assets as well as your businesses assets. However, determining how to set up your business Trust for the benefit of yourself and your named beneficiaries requires knowledge and expertise. Therefore, before embarking on setting up a Trust for your business, it is imperative you seek legal counsel.  And, in order for your counsel to properly advise you, it is important that you are able to provide all of the financial and tax responsibilities of the business you are trying to create a Trust for. 

Before any conversation regarding the particulars of your corporate Trust you first must register your company. Sans registering your company, you cannot form a Trust in its name. Once you have registered your company you can proceed with deciding what the contents of the trust will be, who the beneficiaries of the trust will be and who will be the named Trustee of the Trust. 

Initially, there tends to be a significant amount of confusion as to what type of tax identification numbers a business Trust needs in order to function properly. There are three acronyms that are used in conjunction with setting up a Trust. Those acronyms are:

  • TFN: Tax File Number – used for when the Trustee is filing tax returns for the Trust 
  • ABN: Australian Business Number – required if the Trust is carrying on as a business, in and of itself. 
  • ACN: Australian Company Number – only required if the entity is a company, not a Trust. 

If your Trustee will be engaging in business activities, including investments or trades, then your Trust will need both a TFN and an ABN for purposes of paying taxes and filing tax returns on behalf of the Trust and the beneficiaries.

It is the responsibility of the Trustee of the Trust to secure and register these numbers on behalf of the Trust and the beneficiaries. The Trustee is also responsible for making the tax payments for the Trust and for filing tax returns for the Trust. It is important to keep in mind that these numbers are not associated with the Trustee, but instead belong to the Trust itself.

Since the corporation you built can stand separately from any Trust you create, at this point you could create a Family Trust for the benefit of your family; including your spouse and children. This would allow you and your spouse, or your children (eventually) to be appointed as the Trustee or as Co-Trustees of your Trust. Many people choose this form of Trust to allow for greater protection of their assets. However, we do not advise on embarking on the complications of this form of Family Trust without the advice of a solicitor. 

If you find yourself in need of assistance with this or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.

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