Investment Ownership Structures in Australia Explained

In Australia, the common ownership structures for investment assets include holding in an individual name, joint ownership, family or discretionary trusts, superannuation (including self-managed super funds), and combinations of these. Each carries its own rules, costs, and trade-offs.

Sometimes the structure matters more than the investment inside it.

This article explains the main ownership structures available in Australia, what distinguishes them, and why the choice of structure has lasting consequences. It does not cover every variation or edge case, and it is not a substitute for legal, tax, or financial advice.

Why structure matters#

Two investors can hold the same ETF, receive the same distributions, and sell at the same price, yet end up with meaningfully different after-tax outcomes. The difference often comes down to the structure in which the investment is held.

Ownership structure affects four main areas:

• Taxation. Different structures are subject to different tax rates and rules. Income earned inside superannuation, for example, is taxed differently from income earned in a personal name.
• Access and liquidity. Some structures restrict when and how money can be withdrawn. Superannuation is the most prominent example.
• Asset protection. The degree to which investment assets are shielded from personal creditors or legal claims varies by structure.
• Estate and succession planning. How assets pass on death depends on whether they are held individually, jointly, in trust, or within super.

These four dimensions interact. A structure that offers favourable tax treatment may come with access restrictions. A structure that provides asset protection may involve ongoing compliance costs. There is no single structure that optimises all dimensions simultaneously.

Holding investments in an individual name#

This is the most straightforward structure. An individual opens a brokerage account, buys assets, and holds them in their own name. For ASX-listed securities, shares are typically registered on the CHESS subregister in the individual's name (or held in a custodial arrangement, depending on the broker).^¹

Tax treatment#

Investment income (dividends, interest, capital gains) is included in the individual's personal tax return and taxed at their marginal tax rate. Capital gains on assets held for more than 12 months may be eligible for the 50% CGT discount for individuals.^²

Control and simplicity#

The individual has full control over buying, selling, and managing the portfolio. There is no trustee, no deed, and no additional compliance layer. Record-keeping obligations exist (cost base tracking, dividend statements), but the administrative burden is low relative to other structures.

Limitations#

Assets held in an individual name are generally not protected from personal creditors. In the event of bankruptcy or legal action, individually held investments may be accessible to claimants.^³ On death, individually held assets form part of the deceased estate and are distributed according to the will (or intestacy rules if no will exists).

Joint ownership#

When two or more people hold investments together, the form of joint ownership determines how income is split and what happens when one owner dies.

Joint tenants#

Under joint tenancy, all owners hold an equal interest. If one joint tenant dies, their interest passes automatically to the surviving tenant(s) by right of survivorship. This means the asset does not form part of the deceased's estate for distribution under a will.^³

Tenants in common#

Under tenancy in common, each owner holds a defined share (which does not need to be equal). If one owner dies, their share forms part of their estate and is distributed according to their will. There is no automatic right of survivorship.^³

Tax treatment of joint holdings#

For joint tenants, investment income is generally split equally and each owner includes their share in their personal tax return. For tenants in common, income is split according to ownership proportions.^²

The choice between these two forms is not purely a tax question. It is also an estate planning question, and the implications differ depending on the relationship between the owners and the intended succession path.

Family and discretionary trusts#

A trust is a legal arrangement where one party (the trustee) holds assets for the benefit of others (the beneficiaries). A family discretionary trust, sometimes called a family trust, is a common structure in Australian investing and business.^⁴

How a discretionary trust works#

The trustee has discretion over how income and capital are distributed among the beneficiaries named in the trust deed. This flexibility is the central feature. In any given financial year, the trustee can allocate different amounts of income to different beneficiaries, subject to the terms of the deed and relevant tax law.^⁴

Why trusts are used for investment#

Two reasons are commonly cited:

1. Tax flexibility. By distributing income to beneficiaries on lower marginal tax rates, the overall tax paid on trust income may be lower than if the same income were earned by a single high-income individual. The 50% CGT discount can also apply to capital gains distributed to individual beneficiaries who meet the holding period requirement.^²
2. Asset protection. Assets held within a trust are owned by the trustee in its capacity as trustee, not by the beneficiaries personally. This can provide a degree of separation from personal creditors of beneficiaries, though the extent of protection depends on the circumstances and is not absolute.^⁴

Complexity and cost#

Trusts are not simple. Establishing a trust requires a trust deed (typically prepared by a solicitor), and ongoing compliance includes annual tax returns for the trust, trustee resolutions for income distribution, and potentially audit or accounting costs. Trusts also have their own tax file number and ABN.^⁴

The ATO pays close attention to trust distributions, and there are specific anti-avoidance rules that apply to trust arrangements. The trust tax rate on undistributed income is the top marginal rate, which means the trustee generally needs to distribute all income each year to avoid that outcome.^²

A quiet truth about trusts is that their value depends heavily on the investor's circumstances. For some, the flexibility justifies the cost. For others, the ongoing compliance overhead exceeds any practical benefit.

Superannuation#

Superannuation is a concessionally taxed retirement savings structure. It is covered in detail in related articles on superannuation as an investing account and super access and liquidity rules.

In the context of ownership structures, the key features are:

• Concessional tax rates. Investment earnings inside a super fund are generally taxed at a maximum rate of 15% during the accumulation phase, which is lower than most individuals' marginal rates. In the pension phase, earnings may be tax-free, subject to rules and caps that apply at the time.^⁵
• Preservation rules. Super is not accessible until a condition of release is met (typically reaching preservation age and retiring, or turning 65). This is a fundamental design constraint, not an administrative inconvenience.^⁵
• Contribution caps. There are annual limits on concessional and non-concessional contributions, and exceeding them triggers additional tax.^⁵

Superannuation is not a single "account type" in the same way an individual brokerage account is. It is a regulatory wrapper that applies specific tax and access rules to invested capital. The underlying investments (shares, bonds, property, cash) are the same assets available outside super.

Self-managed super funds (SMSFs)#

A self-managed super fund is a superannuation fund with no more than six members, where the members are typically also the trustees (or directors of a corporate trustee). The members make all investment decisions and are responsible for compliance.^⁶

Why SMSFs exist#

SMSFs give members direct control over investment choices, including the ability to hold individual ASX-listed shares, direct property (subject to rules), and other assets that may not be available through a retail or industry super fund.^⁶

Practical considerations#

Running an SMSF involves meaningful obligations. The fund must have an investment strategy, comply with superannuation law, lodge annual returns, and be audited each year by an approved auditor. The ATO is the primary regulator of SMSFs, and ASIC also has oversight in certain areas.^⁶

There is no legislated minimum balance to establish an SMSF, but the fixed costs of administration, audit, and compliance mean that smaller balances may find the cost-to-benefit ratio unfavourable. Industry commentary and regulatory guidance have historically suggested that balances below $200,000 to $500,000 may struggle to justify the costs, though this depends on circumstances and the fees of alternatives.^⁶

An SMSF is not a tax minimisation device. It operates under the same superannuation tax rules as other super funds. The difference is control and responsibility, not tax treatment.

Using multiple structures#

Some investors hold assets across more than one structure. For example, an individual might hold a personal brokerage account for liquid, accessible investments, contribute to superannuation for long-term retirement capital, and use a family trust for assets intended to benefit multiple family members.

Why combinations arise#

Different pools of money often serve different purposes. Short-term savings may sit in a personal account for accessibility. Long-term capital may sit in super for tax efficiency. Assets intended for intergenerational transfer may sit in a trust for flexibility.

Coordinating across structures introduces complexity. Tax planning, estate planning, record-keeping, and professional advisory costs all increase with each additional structure. The benefit of multiple structures depends on whether the added complexity is justified by the investor's actual circumstances, not by a general assumption that "more structures are better."

Comparison of common investment ownership structures#

This table presents general characteristics. Specific outcomes depend on individual circumstances, current legislation, and the terms of any trust deed or fund rules.

Closing#

The structure in which investments are held is not a background detail. It determines how income is taxed, when capital can be accessed, how assets are protected, and how wealth is transferred. Each structure involves trade-offs between simplicity, tax efficiency, control, and cost.

No single structure is universally superior. The differences between them are practical, not theoretical, and they compound over time in the same way investment returns do. Understanding what each structure does (and does not do) is a prerequisite for making sense of how a portfolio actually works in practice.

The investors who eventually say "I wish I had understood this earlier" are rarely talking about which stock they picked. More often, they are talking about the structure they used to hold it.

Summary#

Investment ownership structures in Australia, including individual holdings, joint accounts, discretionary trusts, superannuation, and SMSFs, each carry distinct rules for taxation, access, asset protection, and estate planning. The choice of structure shapes after-tax outcomes, liquidity, and long-term flexibility. Multiple structures can be used in combination, though each additional layer adds compliance and coordination costs. Understanding these structural differences is foundational to understanding how a portfolio operates in practice.

Sources#

1. Australian Securities and Investments Commission. (n.d.). How shares work. Moneysmart. https://moneysmart.gov.au/how-to-invest/shares
2. Australian Taxation Office. (n.d.). Capital gains tax. https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax
3. Law Council of Australia. (2015). Joint tenancy and tenancy in common: Property ownership structures. https://www.lawcouncil.asn.au
4. Australian Taxation Office. (n.d.). Trusts. https://www.ato.gov.au/businesses-and-organisations/trusts
5. Australian Taxation Office. (n.d.). Super for individuals. https://www.ato.gov.au/individuals-and-families/super-for-individuals
6. Australian Taxation Office. (n.d.). Self-managed super funds. https://www.ato.gov.au/super/self-managed-super-funds