Your Investment Structure Matters More Than You Think

Most Australians focus on which investments to choose — shares, property, ETFs, managed funds — but far fewer consider how those investments are owned. Yet the structure you choose can have a greater impact on long-term wealth than the investment itself. For high-income earners and families with assets over $500,000, choosing the right structure is essential for tax efficiency, asset protection and flexibility.

The three most common structures are personal ownership, trusts and companies. Each has advantages and disadvantages, and choosing the right one depends on goals, risk profile, income levels and long-term plans.

Personal ownership is the simplest. Investments owned personally are easy to manage, and taxation is straightforward. However, for high-income individuals, personal ownership can be tax-inefficient because investment income is taxed at marginal rates. Additionally, personal assets provide little protection from legal or business risks.

Trust structures, such as discretionary family trusts, offer significant flexibility. Income generated inside the trust can be distributed to beneficiaries in tax-effective ways. This helps families optimise tax positions legally and strategically. Trusts also offer better asset protection and allow for flexible estate planning. For professionals who face business or legal risks, trusts can offer a layer of protection that personal ownership cannot. Trusts are commonly used for long-term asset growth, business asset protection and intergenerational wealth planning.

Company structures provide yet another option. Companies have a flat tax rate, which can be beneficial if investment earnings are high. While companies do not receive discount capital gains tax concessions, they are useful for certain business-related investments or when operating as an investment vehicle under specific circumstances. Working with an accountant ensures that company structures are used correctly and efficiently.

Investment structure impacts more than tax — it affects accessibility, asset protection, retirement planning and the ability to distribute wealth. For example, investments intended to support retirement might be better placed inside superannuation, where tax rates are lower and retirement income rules apply. Meanwhile, investments intended to support children, business ventures or long-term family wealth might be better suited to a trust.

Structure also impacts liquidity. A company or trust may offer different access rules or obligations that affect cashflow decisions. Similarly, personal investments may simplify withdrawal but increase tax obligations.

Choosing the right structure isn’t about complexity — it’s about alignment. With the right advice, structure improves tax outcomes, enhances long-term wealth and provides strategic flexibility. This is why a tailored approach, often involving a financial adviser and accountant, is essential for high-income earners with significant assets.

This article provides general information only and does not consider your specific circumstances. Before making investment decisions, consider speaking with a licensed financial adviser.