Employee Shares paid into Discretionary Trust – Reducing Future Capital Gains
Benefit of Discretionary Trust
Regardless of the structure receiving the shares, the ESS statement (discount on market value) is always provided and taxed to the individual.
This means – that the income could be distributed without consequences:
Your Lower Earning Partner/Spouse
First Step: Email your Employer to find out if they will allow a Family Trust
The below article provides an idea of how the process works -but my accountant is happy to provide more assistance.
Your associates can be your spouse, child, company or trustee of a trust (other than the trustee of an employee share trust)
The term Employee Share Trust is an “Employer operated Trust” – which is different to a “regular” discretionary trust that we are suggesting.
Non-Australian Companies may not allow Discretionary Trusts
If you work for a Non-Australian company, they may not allow this.
Example response below from on of our clients who works for a USA based employer.
Unfortunately, they have come back to confirm that EMPLOYER does not have the ability to grant stock to anyone other than EMPLOYER employees and so cannot offer any assistance in line with the suggestion below. USABroker1 and USABroker2 serve as our plan brokers, and EMPLOYER is unable to directly deposit shares into any other account.
Second Step: Book a meeting with us to help grow and protect your wealth
Even if your employer doesn’t allow the discretionary trust for payment of your ESS interests – there are reasons that it still may help your family wealth growth to create one.
Please book a time with me via www.calendly.com/ipas to discuss.