The best Structure for me?

I think you will find that using a trust does not increase borrowing capacity. This has been discussed at length on these forums- Terryw and Richard Taylor might be able to comment more on this.

As for trusts, anyone can create a trust and there are steps you need to go through. A good tax advisor or acocuntantand a solicitor will be able to help you. Discretionary Trusts with a company as a trustee seem to be the way to go.

Cheers,
Luke.

If you are the only potential beneficiary I can't see how a tust would have any tax benefis to you. With this structure you would need to set it up with a coporate trustee, as you can't have a family trust with the one trustee also being the only beneficiary. The use of a corporate trustee would give you a level of asset protection, but increases costs and reduces your lending options when it comes to residential finance.

The one area where I disagree with the above comments is in the area of servicing. It is true you will not get any assistance with servicing in the short term. But there is potential to have lenders assess only net profit from a trust in future, rather than puting the individual properties and debts into their calculator. It used to be pretty easy to get some lenders to do this and it had a marked affect on borrowing capacity, it is much more difficult at the moment although we have been able to get lenders to assess this way a few timnes recently. Regardless you would need at least 2 tax returns showing profits from the entity.

Regards
Alistair

I have to disagree with Alistair.

Even a single person can obtain tax benefits of using a discretionary trust – 2 ways at least:
– By setting up a company as beneficiary and capping the tax at 30% (this can usually be done later).
– By having future family members come into existence and become beneficiaries – spouses, children, mistresses (in that order).

And although you cannot have a trust with the beneficiary the same as the trustee (you can't hold assets on trust for yourself) you can have a trust with yourself as trustee and a whole range of family beneficiaries – eg future spouses, children, grandchildren, step children etc.

There has to be net income to distribute before it can be used. As this is unlikely at first and there seem to be no current beneficiaries it is pretty debatable whether a structure is warrented or not. I wouldn't bother, I'd ratgher use the short term tax benefits and savings on expenses, but can also see why some people would choose to use a trust in this situation.

Hi,

I have 2 questions.

1.  If you set up family trust with corporate trustee, is that the same thing as setting up a family trust and a company?

2.  If you set up a family trust, as a wage earner (not self employed), can this wage/salary somehow go into the trust?

Thanks in advance.

Does anyone know of a good resource I can get hold of to learn about trust structures?

Thanks heaps Terryw! Your a champ.

Yes, this is not the case. A trustee can be a beneficiary, just not the only beneficiary.