Yes, a family trust can legally purchase a car in Australia—provided the acquisition aligns with the trust deed, serves the interests of the beneficiaries, and complies with relevant taxation, trust, and corporate law obligations. In such cases, the trustee acts on behalf of the trust, meaning the vehicle becomes a trust-owned asset, not a personal one. While the focus here is on vehicles, similar issues apply to other assets like houses, where the trustee must ensure compliance with both the deed and applicable laws.
Family trusts are recognised legal arrangements that can hold and acquire various classes of assets, including vehicles. Under Australian law, the trustee is responsible for managing these assets in accordance with the trust deed. This includes the authority to buy, register, insure, and maintain a vehicle if the purchase serves the trust’s purpose—whether for investment, business operation, or beneficiary support.
When a trust purchases a car, it must be registered in the name of the trustee "as trustee for [Trust Name]" to clearly indicate ownership by the trust. This helps prevent disputes over beneficial ownership and ensures legal clarity for tax, liability, and asset protection purposes. Incorrect registration—such as listing it under a beneficiary’s personal name—can compromise the integrity of the trust arrangement.
Family trusts are flexible legal structures that can acquire vehicles for a range of purposes—provided the acquisition aligns with the trust deed and benefits the beneficiaries. Below are some of the most common and legally permissible scenarios in which a trust may consider buying a car.
Each scenario must be assessed to ensure it falls within the powers outlined in the trust deed and serves the trust’s objectives.
If a car owned by the trust is made available for personal use—such as by a beneficiary or employee—it may attract Fringe Benefits Tax (FBT). The ATO may also examine whether the car is being used for business or private purposes, which affects whether depreciation and operating costs can be deducted.
Key tax issues include:
Consultation with a tax adviser or trust law expert is strongly recommended to ensure compliance and correct reporting.
Buying a car through a family trust can provide several strategic advantages, particularly in areas such as asset protection, succession planning, and tax efficiency. When structured correctly, these benefits can support both operational and long-term objectives of the trust.
Despite the potential advantages, there are legal and tax-related risks involved in acquiring a car through a family trust. Trustees must ensure that all transactions are compliant with the trust deed, properly documented, and defensible in the event of an audit or legal dispute. These considerations form part of the general rules for asset purchases by trusts, regardless of whether the acquisition involves vehicles, real estate, or other property.
Before proceeding, trustees should:
This section answers the most searched questions based on actual user intent.
Yes, but the car remains legally owned by the trust. Beneficiaries may use the vehicle, but their use must be justified under the trust's purpose and may trigger tax consequences such as FBT.
If the trust is registered for GST and the car is used for business purposes, it may be eligible to claim GST input credits. Detailed recordkeeping is required to support the claim.
This scenario must be handled carefully. If a beneficiary or director funds the purchase, it may need to be documented as a loan or contribution to avoid breaching trust law or tax obligations.
Yes, but stamp duty may apply. Transfers must be properly documented and must not disadvantage the trust or its beneficiaries.
Purchasing a car through a family trust can offer strategic advantages, but it must be legally justified, tax-compliant, and aligned with the trust deed. Legal and financial advice should always be obtained to avoid breaching trust duties or triggering unintended tax liabilities. If you are unsure where to start, learning how to find a good family law lawyer will ensure you have the right professional guidance to structure the purchase correctly and protect your trust’s interests.