The combination of the Bamford decision and the Tax Office’s attitude in relation to unpaid present entitlements have meant that we have spent a significant amount of time recently looking at optimal structures for business and investment purposes.
One approach that we have seen an increasing number of clients and advisers consider where a business is owned by a discretionary trust, is the licensing of that business to a trading company.
Obviously, there are a number of tax and stamp duty issues that need to be considered in relation to this approach.
A recent case however seems to confirm that at least in relation to the philosophical legal questions, this kind of approach is now available.
For those who are interested to learn more, a copy of the decision is at the link below. One of the most important paragraphs in the decision is number 42, which highlights the distinction between a goodwill licence and a business licence.
http://www.austlii.edu.au/au/cases/sa/SASC/2010/279.html
Until next week.
