As a tax agent, I often advise clients on the importance of choosing the right investment structure. This decision can have significant implications for tax efficiency, asset protection, and estate planning. Understanding whether you need an investment structure and exploring the available options is crucial for any savvy investor. Here’s an overview of the key considerations and options.

1. The Importance of an Investment Structure

  • Tax Efficiency: Different structures can have varying tax implications, affecting the net return on your investments.
  • Asset Protection: The right structure can protect your assets from legal liabilities.
  • Estate Planning: Some structures offer advantages in terms of succession planning and estate management.

2. Individual Ownership

  • Direct Ownership: Holding investments directly in your name.
  • Simplicity: This is the simplest structure, with straightforward tax reporting.
  • Tax Implications: Taxed at your personal income tax rate, which could be higher than other structures for significant investments.

3. Partnership

  • Joint Ownership: A partnership involves two or more people (or entities) holding an investment together.
  • Shared Liability: Partners are jointly responsible for the investment and its liabilities.
  • Taxation: Income and capital gains are distributed to partners according to their share and taxed at their individual rates.

4. Trusts

  • Flexibility in Distribution: A trust holds assets for the benefit of beneficiaries, with income distributed by the trustee.
  • Types of Trusts: Includes discretionary (family) trusts, unit trusts, and hybrid trusts.
  • Tax Benefits: Potential for tax-effective distribution of income, particularly in discretionary trusts where income can be distributed to lower-tax-rate beneficiaries.

5. Company Structure

  • Separate Legal Entity: A company is a separate legal entity, which can own and manage investments.
  • Tax Rate: Companies are taxed at the corporate tax rate, which might be lower than the personal marginal tax rate for high-income earners.
  • Dividend Distribution: Profits can be distributed as dividends, potentially with franking credits.

6. Self-Managed Superannuation Fund (SMSF)

  • Retirement Savings: An SMSF is a private superannuation fund that you manage yourself, suitable for long-term retirement savings.
  • Tax Advantages: Offers tax advantages for retirement savings, with concessional tax rates on investment income and capital gains.

7. Choosing the Right Structure

  • Consider Your Goals: Your investment goals, risk tolerance, and personal financial situation will influence the best structure.
  • Seek Professional Advice: It’s crucial to consult with a financial advisor or tax agent to understand the implications of each structure.


Selecting the appropriate investment structure is a crucial decision that impacts your tax obligations, asset protection, and future financial planning. Each structure has its pros and cons, and the right choice depends on your individual circumstances and investment goals. Professional advice is key to navigating this complex decision, ensuring that your investment structure aligns with your broader financial strategy.