Setting up a trading company

[McLovin]

True, but not a real tax in the sense that the money will still be sitting of to the side compounding for you.

trusts are the best for investing in my opinion, and if you are large enough you can have a company as one of the beneficiaries of the trust, so you can get the best of both worlds.

Which is why I said "for the purposes of this exercise". If you're running a relatively small trading company it's unlikely that you're going to view sticking $5k/year of your trading capital in Australian Super as a positive.

Can you expand on that please McL?

With a trust you can stream the income to beneficiaries with the lowest tax rate. Think of it like paying dividends except that you (the trustee) decide how much, or how little to stream to each beneficiary, and also whether or not you send them capital gains or ordinary income.

 

[bellenuit]

I don't know anything about trusts, but I think I read somewhere that IB doesn't provide margin to trusts that are in the name of an individual, just corporate trusts. Is there such a distinction in types of trusts? I maybe talking through my hat on this, but it is something I am sure I have read recently by someone trying to set up an IB account.

 

[McLovin]

I don't know anything about trusts, but I think I read somewhere that IB doesn't provide margin to trusts that are in the name of an individual, just corporate trusts. Is there such a distinction in types of trusts? I maybe talking through my hat on this, but it is something I am sure I have read recently by someone trying to set up an IB account.

Yes. IB won't provide margin to where the trustee is an individual, only if the trustee is a company.