Do I pay tax if I take money out of my business bank account?

Firstly, a bit of background. Family trusts are a way to protect assets, either for your own benefit or for the benefit of your family or others beyond your lifetime. The assets may be cash or other types of assets such as real estate, life insurance, vehicles and securities. Trusts work by transferring the ownership of the assets to trustees. For example, a family that lives in a family home transfers the legal ownership of their asset, the family home, to the trustees. The family can continue to use and enjoy the assets (as long as allowed by the trust deed) even though they no longer personally own the home. A trust may be useful to: • Protect assets against future claims and creditors, such as if a business failed • Put aside money for a special purpose, such as a child's education • Ensure children, and not their partners, receive their intended inheritances • Reduce the risk of unintended claims on an estate in the event of death. While trusts can have benefits, they can also involve a considerable amount of resources in administering them properly. This needs to be weighed against any possible advantages a trust may have. Although a trust is normally given a name and is often referred to as if it is a separate entity, like a company, it is not. A trust is a relationship between trustees and beneficiaries which imposes duties on the trustees to deal with the trust property in the interests of beneficiaries. I'm a Trustee - what are my obligations? The trustees are responsible for managing the trust for the benefit of the people (or organisations) named as the trust’s beneficiaries. In practice, this can often involve some fairly time consuming obligations. Trustees can also be held personally liable - so tread with caution! Specifically, the legal duties of trustees are to: • know the terms of the trust, as recorded in the trust deed, and act according to those terms; • act honestly and in good faith; • act for the benefit of the beneficiaries; • exercise their powers as a trustee for a proper purpose; • keep copies of the trust deed and any variations; • give basic trust information to every beneficiary (including the fact that they are a beneficiary; the names and contact details of the trustees; details of the appointment, retirement or removal of trustees, and their right to trust information.) Unless the trust deed specifically excludes it, legal duties also include: • using reasonable skill and care when managing the trust, using any special knowledge or expertise they have eg, as a lawyer, accountant; • investing the trust assets prudently; • acting unanimously; • not using their power as trustee for their own benefit; • acting impartially between beneficiaries; and • not taking any reward for their duties (it is acceptable to be reimbursed for costs). Additional obligations may be set out in the trust deed. A trustee may be personally liable for debts incurred by the trust, especially if the loss was a result of an intentional breach of trust, dishonesty, or negligence. How can we help? We regularly help to advise clients on whether a trust is right for them. For clients that are trustees, we can help them meet their obligations. Some trusts are relatively simple to administer properly, while others that are more complex require a great deal of time and care from the trustees. A trust with one asset, such as a mortgage-free family home, with all outgoings paid by the family, would generally only need minimal administration. On the other hand, a trust with a range of assets, including income-producing investments, would require a lot of administration. On top of completing an annual tax return, the trustees would need to undertake, for example, periodic reviews of investment strategies and continuous maintenance of the assets themselves. We are experienced in advising on such issues and are always available to assist. Disclaimer: This post is a general discussion and does not constitute specific advice. Any concepts or ideas raised in this post should be discussed with your accountant and/or solicitor to ensure that all relevant matters are considered.

If you haven’t joined the hordes of readers yet – an estimated 2 million copies have sold – now is the time. Title: This is Going to Hurt: Secret Diaries of a Junior Doctor Author: Adam Kay Published: 2017 Adam Kay is a British writer and comedian who used to be a doctor before life in the NHS made him reconsider his career choice. He now says he would advise any children he has in future against going into medicine. The book is superbly written as a part hilarious, part horrifying insight into the day-to-day life as a training doctor in the UK. I laughed many times and was devastated when it was over, both because of how brutally Kay portrayed his experiences and because I didn’t want the book to end. It is difficult for someone who has never worked in a hospital setting to comprehend how one person could encounter so many hilarious, shocking and eye-popping instances of humanity. Is this guy for real? But it seems it is all true. Kay takes great pains to write honestly and openly about his experiences. It is not a highly technical account. Kay spends his first few years encountering the full spectrum of health issues and then trains in obstetrics and gynaecology as a specialty. It is here that the toll of an overburdened, under-resourced and unsupportive system becomes too much. If Kay hadn’t quit his career there’s no doubt he would have refrained from publishing such a scathing account of his experience in the NHS. Reading this book begs the question: what would a New Zealand version look like? Kay’s subsequently published companion book, ‘Twas the Nightshift Before Christmas, is also highly recommended. It is a much slimmer volume but well worth it for the inclusion of the stories which Kay said he’d been told by his publishers were too rude to put in his first book. Rating: 9.5/10 When to read or not to read? Not in public. I agree with one review which said the book “will make your eyes water…and it may well make you choke on hot tea”. It’s also not for the closed minded or squeamish; I refrained from sharing our copy with my parents. Rachel Irwin