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US 12 | Australian Trust Holds LLC
Manage episode 322166149 series 3321676
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For an expansion into the US is it best if your Australian trust holds LLC interests directly? Rather than going through a C-Corp?
Australian Trust Holds LLC Interests
When you expand into the US, you very quickly look at significant tax leakage and double taxation. And this despite potentially enjoying zero withholding tax (WHT). And despite potentially having NANE income under s768A ITAA97 or s23AJ / s23AH ITAA36. The reason for this tax leakage is two-fold.
1 – The tax you pay in the US doesn’t go into your Australian companies’ franking account and,
2 – The withholding tax you pay might give you a foreign income tax offset (FITO), which gets lost as the income is distributed to shareholders.
And so for that reason setting up a trust who holds your US business within an LLC might be a way to avoid this double taxation since the trust beneficiaries can claim a FITO for the US federal income tax the trust paid in the US.
To find out more let’s listen to Bryan Kelly of Withers in Los Angeles.
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