My wife and I are considering purchasing an IP.
A couple of important notes…
We don't plan on selling anything. Period. So CGT isn't a concern.
The aim is cashflow.Positive cashflow properties initially (using high deposits) and paying the mortgages down.
We don't need access to the cash flow yet.
We want to separate the properties into separate entities for asset protection reasons.I'm thinking of the following…
Setting up a separate trust for each property.
Using my current pty ltd as trustee for IP Trust #1, IP Trust #2 etc etc.
Setting up a second pty ltd as the beneficiary of all the trusts, so that any profit is distributed to that (max 30% tax rate – I'm starting small but planning big)
Second Pty Ltd would then loan money (if any) back to Trustee Company to re-invest in trusts (Pay down mortgages etc)Questions.
Is this viable? If not, why not?
Does this achieve what I want? Separation and Asset protection?
Is this the best way to achieve what I want?Thanks in advance!
Hi
Sounds like a good plan as long as the trustee company is not trading – it should be solely acting as a trustee.
Usually the beneficiary company is not need to be set up until you need to distribute to it – not until your marginal tax rate is more than 30%.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry.
Good to know I'm on the right track in all this
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