Loading
Samantha_Woon(Initiate)Initiate
7 May 2025

I have a client structure as follows:

  • Unit trust A operating business less than $10m turnover
  • Family trust B holds 100% units in unit trust A
  • Company C is bucket company

Scenario

Unit Trust A distributed taxable trading profits to Family Trust B, which then distributed at least 80% to Company C.

Would Company C be considered a Base Rate Entity and taxed at 25% or would the company pay the 30% tax rate?

1,545 views
3 replies
1,545 views
3 replies

All replies

MPrivate(Superuser)Superuser
7 May 2025

Hi,

  1. aggregated turnover test must be passed (you only mentioned Unit trust turnover)
  2. what other income do unit trust, family trust and the company have? Capital gains, interest? All needs to be traced to the final assessable income of the company and passive component not exceeding 80%. See here


Featured articles

How to work out your tax residency

15 Apr 2026 · 8 min read time

Finding your TFN

6 Feb 2026 · 4 min read time

Linking your myGov account to the ATO

24 Aug 2025 · 3 min read time

Top liked users

  1. Bruce4Tax

    (Taxicorn)

    3107 likes

  2. Taxduck

    (Taxicorn)

    2104 likes

  3. PayrollDeanne

    (Taxicorn)

    838 likes

  4. YellowPotato

    (Taxicorn)

    546 likes

  5. knaresbro

    (Devotee)

    368 likes

Top contributors

  1. Bruce4Tax

    (Taxicorn)

    9645contributions

  2. Taxduck

    (Taxicorn)

    4811contributions

  3. PayrollDeanne

    (Taxicorn)

    2044contributions

  4. YellowPotato

    (Taxicorn)

    1382contributions

  5. YEP

    (Devotee)

    836contributions

Loading
Determining whether a bucket company is a base rate entity | ATO Community