Updated November 12th 2013

Particular attention needs to be paid to payroll tax thresholds when a business is conducted and employees paid through a discretionary trust.

When each family member has a business and they are also beneficiaries of a discretionary family trust conducting a business, they may be grouped for payroll tax provisions. Grouping occurs between any entities which have the same controlling interest, however with a discretionary trust, all eligible beneficiaries are deemed to have a controlling interest. The effect of being grouped is that the payroll tax threshold must be shared between the entities rather than each one being entitled to the full threshold. In order to avoid this potential issue it may be beneficial to exclude some family members from being beneficiaries of the family trust.