I’ve always believed in keeping it simple and encouraged clients to rather have common shareholders in separate companies than have a holding company in which the various parties own shares. But there’s one clear exception – Let’s say you have a very profitable company in a high risk business and the company is owned by your trust. Is the trust at risk? No, but the profits are stuck in the company unless it declares dividends to the trust. So now, after the deduction of the Dividends Witholding Tax (DWT at 20%), the trust sits with 80% of the cash. What…
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