Advanced Revenue Case Study (Case Study Sample)

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Question Two
Starting a company is termed as worthwhile and pleasing activity that an individual can engage in thus one need to protect his personal assets and the protection of personal assets has with time been advocated for as a major and necessary step in the formation of a new company or business. Trading trust has over the years been used and majority specialized consultants are gladly proposing their use to most of their customers as a substitute trading medium. A discretionary trading trust is typically formed by an action of agreement where a settlor offers an ostensible amount of money as the preliminary capital for the trust and hires a trustee to run the trust. Both the individuals and company are competent of acting as trustees however a business trustee is most preferred. The business operators have control of the trustee corporation and both its managers and the shareholders. A discretionary trading trust mainly generates its income from its trading activities.
The standard of asset protection is destined for an individual to separation himself or herself individually from the assets he posses, this is done in the aim of protecting the assets from been attacked by the creditors in future. Discretionary trust can consequently be applied as an asset protection technique in which the settlor can act as a protector and a recipient, but the settlor cannot be a trustee and a sole beneficiary. In such a scenario the settler is therefore viable gain from the trust possessions, with no actual ownership, and consequently with the possessions not been there for the creditors. In most cases trust are usually established and are given different names so as to safeguard anonymity.
Trusts are usually the most commonly used and applied assets protection techniques in the modern day business world. When assets are transferred into trust the title is consequently held by a third party. Discretionary trusts offer the trustees an option to pay or apply for a recipient benefit or no trust income primes in a way that they think is appropriate. The beneficiaries do not have a lawfully enforceable right to the assets; therefore the creditors are not able to attain the trust corpus. Thus in William Lee case a discretionary trust can be useful in protecting his personal assets and wealth.
The formation and establishment of a trust has been attributed to having certain tax benefits. The tax penalties associated with a trust are usually diverse from the tax penalties using another route. Therefore William is able to avoid paying a higher tax by development of the trust. Thus the aspect of tax avoidance is the tax benefit associated with the establishment of the trust.
A trading trust is generally defined as an association that is formed and one individual holds the asset as the lawful owner; nevertheless the lawful ownership is for the benefit of the other parties in the trading trust. The formation of a trading trust is commonly attributed to having various advantages. One of the major advantages of establishing a trading trust is that the business profits can be allocated to trust beneficiaries in any proportion. This flexibility enables efficient utilization of marginal tax rates. Another advantage is that it minimizes or shuns tax liability; this is mainly realized through a clear distinction between asset control and ownership. Another advantage of the trading trust is that it ensures a lifetime financial management: a trust has been found to efficiently consolidate all financial dealings in a single vehicle, thus contributing to simplicity of the management function.
Trading trust also aids in the protection of personal assets, with legal action and political instability one personal assets are at risk and an asset protection trust can help in easing the problem. An asset protection trust can do much to alleviate this problem. A trading trust also aids in the countenance of the business, corporate structures are efficiently run by a trust and at the same time the trust assists in the allocation of profits as desired. A trust has also been found to be a necessary tool in the creation of a pension scheme for workers, thus a trust is a useful medium for the accumulation and distribution of pensions amongst workers .a trading trust also make resources available for educational purposes even after death thus the family is not stressed up by find money to cater for their daily expenses. A trading trust also offers a creditor with protection and an elastic ways of distributing the income of the trading.
A service trust offers services to a specialized practice and to business units. The owners are the one having the major control of the activities of service trust and it is mainly used in the planning of tax to transfer earnings from the professional’s side or the business unit side to a third party thus attracting a lower tax rate.
A service trust is mainly attributed to having a lot of benefits. One of the benefits of a service trust is that it attracts a lower interest rate. This is achieved through the rerouting of earning from the business unit to another person and thus a lesser interest arte is charged. Another benefit of a service trust is that it ensures a long tie financial management. By the use of a trust almost all the financial management functions are combined into one location this aids in effective management. By using a service trust it helps in protecting the business assets from the creditors.
Another benefit of a service trust is that it enhances privacy upon death since a service trust is not subject to public probate. A service trust also offers a future administration of personal assets so as to protect against future inability. A trust also makes the administration if assets possible for the beneficiaries who are not able of the proper management of the assets due to certain aspects such as age, sickness or the mare lack of business skills.
Question Three
A self managed superannuation fund which is also abbreviated as SMSF is generally defined as a minute superannuation fund which is comprised of about one to four members who are related or not related and the fund is mostly administered by the trustees or executives who are also the associates in the named SMSF. The members have the full control and they make decisions on how the fund will be run and the kind of investment that will be made by. Most SMSFs permit individuals to run their personal super investment for them to use during their old age days. Most SMSFs are designed in such a way to convene the precise investment requirements of members and superior management over investment tactics. There are certain requirements which are set under the super laws that a fund need to meet for it to be termed as a SMSF. The requirements tend to be diverse depending on whether the fund has one of the following types of members: individual trustees, a single member and, a corporate trustee.
A basic necessity of a SMSF is a clear and concise investment strategy. The strategy is set in such a way that the funds are solely invested for the full advantage of the fund members. The investment strategy ought to take into account the dangers which are mainly associated with investments, the expected profits, asset allotment, diversification and the funds liquidity. The trustees of the fund have a responsibility of making investment decisions. The trustees also have a right to choose the most appropriate investment for the fund. The superannuation industry (supervision) ACT clearly articulates the requirements that must be followed by the fund trustees when making nay kind of investment. There is a wide variety of investments that can be made using the SMSF fund. Such invest includes: one, invest in shares. Most individuals tend to invest their SMSFs fund in direct shares. Shares at times bought from the fund members either at current values in the market or sometimes from the stock exchange by the use of a broker or in some instance the shares can be bought online.
Another investment that can be made using the fund is investments in residential property. Fund from the SMSFs can invest in residential properties for example vacant land, houses, units and town houses. Real estate has been associated with certain benefit such as one can be able to by far borrow money, thus enlarging the potential profits. Investment in properties has for a long time been confirmed to be a major and noteworthy investment in Australia, nevertheless it was cumbersome to procure due to the tight limitations which had been placed on loans related to SMSF trusts. Over time these limitations have been lifted and thus many individuals have opted to invest their trust by buying property.
Another invest is the investing in commercial property. Most stylish investors that are conversant with the dangers and rewards associated with invest opt to invest their funds in commercial properties. Typical offices, shops or storehouses investment are among the widespread due to the ease to finance thus presenting noteworthy gearing reimbursements. Some properties such as planking houses and service stations have been proved to take a large amount of money and such large amounts of money may not be available in the SMSF. Thus when one is choosing the investment to make one should choose an investment that suits the preferred danger profile and targeted amount of profit.
SMSF can also invest in managed funds. Managed funds offers entrée to investment bazaars that are hard to be accessed directly, a good example of such bazaars is the international stock markets. SMSF also offers an extensively expanded range for comparatively small investors. Prior to making any investment decision it is vital to comprehend the regulatory limitations that are placed on SMSF; for instance, a fund cannot...