QLD Company structure question

[Simi]

Hi, I have a question regarding liability in and trust.
My husband is the director of our company, a couple of years back our accountant set up a trust, that our company was trustee for. We trade under a business name. Now it looks like we need to liquidate, due to a unmanageable tax bill. My question is, does the debt become personal (my spouse as the director) or is it company? My accountant thinks it's personal however I need another option. I've viewed the trust deed and it clearly says the pty Ltd company as the trustee.
Thanks in advance

 

[Rob Legat - SBPL]

The question is, who has the tax bill: the company, the company as trustee or your husband?

If it's the company, as long as there has been no insolvent trading then the tax liability remains with the company.

If it's the trust, it gets complicated and you'll need to seek professional advice to look at the structure of the trust and how the dividends have been dealt with.

If it's your husband, it's his debt and he has to wear it.

 

[Rod]

Having a company as trustee does not absolve a director of their responsibilities.

It is likely your accountant is correct, though I am not a tax lawyer or an accountant..

 

[Rob Legat - SBPL]

Generally speaking, directors are not liable to tax debts incurred by a company so long as they were not insolvently trading - regardless of whether it's in their own right or as trustee. The issue with the trust can become the nature of the trust structure and how profits of the trust are distributed to beneficiaries.