When I first started in tax, many self managed entities (SME) or Small Business Entities (SBE) operated through discretionary trust structures. They were an attractive proposition. Discretionary trust structures offer flexibility in how income is to be taxed. Typically trusts are non income tax paying entities (there are exceptions of course) and assessable income derived by the trust can be spread around a number of eligible beneficiaries, utilizing lower marginal tax thresholds of individuals within the family group, and even parking distributions with "bucket companies" ensuring that the effective tax rate across the family group doesn't exceed the company tax rate. Trust structures are also eligible for the general 50 % CGT concession which is an attractive proposition later down the track when it comes time to exit, and realize a capital gain on disposal of the business. Tax is an ever changing field however, and over time corporate structures have become more pop...