Distribution of dividend with trustee involved
Scenario:
My family trust holds shares in company A and at the end of the year, received $80,000 from company A as a dividend to the trust unfranked. The trustee is a company, can the whole family trust income less any expenses go to one beneficiary who is the director of the trustee and company A?
Explanation:
Yes, there is nothing to prevent the payment of such a dividend. Companies are separate legal entities from their individual directors (ITAA 1997 s 960-100, 995-1(1); Salomon v Salomon & Co (1897) AC 22; Interpretative Decisions ID 2002/823 and ID 2003/738).