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Find out about a Discretionary trust and also about a corporate trustee.
Due Dilligence is important and I’m happy to see that you are doing it.Let me know if I can help.
CATA
Asset Protection Specialist
[email protected]Originally posted by stuck-at-two:Does this mean it only applies if you are working in/or as a company.(director of company)????
DIFFERENT CIRCUMSTANCES WILL HAVE DIFFERENT OUTCOMES. IF YOU ARE IN A LOW RISK BUSINESS YOU SHOULD BE OK.
If I am a purchasing I.P’s under a trust, then get divorced,(properties purchased before marriage) this still means my wife cant get access to these properties right???
THIS IS DIFERENT AGAIN AS IT RELATED TO FAMILY LAW. THE FAMILY LAW COURTS HAVE THE POWER TO LOOK THROUGH ANY STRUCTURE.
Or if the properties are pucrhased under the trust, and I live with a girlfriend for 5 years, she still cant sue me for part of these properties, as I dont own them.
BEING A DEFACTO FOR MORE THAN 3 MTHS THIS WOULD GO TO THE FAMILY LAW COURT.
Question is, the above statement refers to employess of company’s or directors right???
IF YOU HAVE BEEN NEGLIGANT YOU ARE LIABLE.
Sorry about the caps, it looks like I’m yelling. The facts are that if you do something wrong you can get in trouble. Nothing new here.
Hope this helpsCATA
Asset Protection Specialist
[email protected]You seem to be missing some important points Noodles.
“The fundamental purpose of a trust, from a legal point of view, is to distribute funds or income held, or received, in trust.”
If the sole purpose of a trust is to distribute funds then this is not tax minimisation but tax avoidence, the sole intent being to “Not Pay Tax” is part 4a of the tax act. I would be more worried about the tax office chasing me.
How can you say this is the legal point of view when it concerns
income streaming? Last time I looked solicitors/barristers were not qualified to give income streaming advise.“A Trust is NOT a legal entity in the sense that it can own anything itself.”
This statement while true is a very grey area. A trust has it;s own common and tax laws that it must follow, and because of this it has been successfully argued that it is a seperate legal entity ( just not in court YET).
“Simply that setting up a trust to avoid having your assets attacked would give you no additional security”
This statement is also lacking the big picture aproach. It is all about limiting liabitity . Yes the assets in a trust can be clawed back in certian circumstances, but that limits liablity to one entity, not every entity that you use for investment/business etc.
“Why TRUSTS are becoming so popular, apart from being cheap and easy for accountants to set up at a profitable price, is because of the (mistaken) belief that a Trust can somehow own or control assets in its own right. That is not true.”
I don’t know who you have been talking to, but a good trust is not cheap or easy to set up. I have seen some on Ebay for $37.50, but you get what you pay for. You also seem to miss the importance of a corporate trustee (which is a seperate legal entity).
I know of some Financial Planners/Advisers who have been qualified in 21 days. Yes, you read that correctly, the PS 146 I believe is not hard to obtain and allows you to become someone who is suppose to know about finance. That qualifies you to advise people to invest with Westpoint.
This is not a “Fad” as you seem to put it.
CATA
Asset Protection Specialist
[email protected]I (and alot of others I know) do not agree with her on this subject.
CATA
Asset Protection Specialist
[email protected]This is Margaret Lomas opinion. I suggest you learn about trusts and why people use them and make an informed decision for your own personal situation.
CATA
Asset Protection Specialist
[email protected]Originally posted by ptn:A good friend who has a trust said to me … the discretionary trust allows the director (me) to negatively geared against any loss as my current salary is used to pay the difference (short) for my IP.
Your friend is misinformed. You can get the -ve gear affect through a Hybrid trust but not in a discretionary trust.
E-mail me if you want
CATA
Asset Protection Specialist
[email protected]Terry is correct
You will get tax credits untill the trust makes a profit, then you will be able to claim the losses anginst any profit made.I believe that expences before you purchase the property are not claimable. The costs incured from inspecting your IP’s are claimable.
Check this with your accountant.CATA
Asset Protection Specialist
[email protected]You can purchase an IP in a SMSF but a super fund can not borrow money. The super fund must pay cash for the property.
Be careful with SMSF, learn the rules and play by them.
CATA
Asset Protection Specialist
[email protected]Quote:Originally posted by brandmark:[
For instance in NSW it is not adviseable to set up a discetionary trust structure to purchase property as that is treated as a special entity and a whole range of tax implications will apply to your property purchase and investment cost thousands of dollars on the long run, and if you end up with a substantial portfolio, it could be hundreds of thousands opver the property life. The main implication is that the trust will not have a tax free threshold. .Quote:The Unit trusts and therefor Hybrid trusts are also now special trusts. The Discretionary trusts will give much better asset protection than a Unit trust. A trust only pays tax on any income still in the trust at June 30(which is at the top rate) but any distributions are taxed at the beneficiaries marginal tax rate.I disagree that a discretionary trust is the wrong entity for NSW, as everyone’s personal position is different.
CATA
Asset Protection Specialist
[email protected]General Q & A this forum is a perfect place for the questions. For personal questions I am happy to answer some questions via e-mail, time permitting of course.
CATA
Asset Protection Specialist
[email protected]Sure
CATA
Asset Protection Specialist
[email protected]No I don’t mind if you e-mail me with your questions.
CATA
Asset Protection Specialist
[email protected]I could help from Aus but the UK has different laws that I do not know. Any opinion that I post are from Australian laws.
CATA
Asset Protection Specialist
[email protected]I think the Family trust is a bad idea. It limits your tax advantages. If you have lots of trusts directing income to a family trust, then the family trust will have a large income eventually. As family trusts can only distrubute to family members, how much can it earn and keep tax under 30%?
This is not something I would do. A corporate trustee and discretionary trust would do everything you want, and giving you the option of using a bucket company to offload excess income capping tax at 30%.
If we don’t go for the 3-tier structure and stay with a 2-tier structure (corporate trustee and family trust), how many family trusts can you have? If as suggested, you create a new structure once a nominal asset value is reached.
How many do you want? I know of no limits. I would keep business in a seperate structure from your IP’s, but how many trusts do you need. I have seen 50 from one corporate trustee (what a pain at tax time)
E-mail me.
CATA
Asset Protection Specialist
[email protected]You only get tax credits if the Aus government has a double tax agrement with the country you are dealing in.
CATA
Asset Protection Specialist
[email protected]Hi Lisa
How it works will depend on what you have and where you want to go with your investing. It may be better to do this vie e-mail as your personal details will be needed for a good assesment of your situation. This will also allow me to give you a cost of different structures for you.
E-mail me.
CATA
Asset Protection Specialist
[email protected]Originally posted by Trade Off:The structure he might be referring to is a Property Investor Trust which advocates a separate trust for each property in NSW to make use of the land tax threshold.
I would recommend lots of research as there is no indication that the OSR will continue to allow this sort of trust to be exempt from the threshold.
I think the OSR has already put in place measures to stop this structure’s effectiveness for land tax.
CATA
Asset Protection Specialist
[email protected]I think Derek has it right here. Stamp duty should not change in any structure, as it is worked out on the purchase price.
CATA
Asset Protection Specialist
[email protected]I have heard that ceramilite can delaminate around tap fittings letting water into the masonite. This will cause swelling and cracking.
Lamipannel is a good product. Can be difficult to cut without chipping so get some advice from a pro for that. The right tools will makeit easier. It is resin so use a repirator when cutting or sanding. Maybe get a MSDS.
CATA
Asset Protection Specialist
[email protected]Hi Jubb
One type of trust will never fit all. There is some trusts that will suit you more and some would not suit you at all. Purchasing an IP in a trust will limit your exposure to any claims made against you.
Eg. PPOR is in your name, IP in a trust A (some have one trust for each IP, but most will settle for 4-5 IP’s per trust. It is a personal choice but also a financial one).
Insurance is important but will it cover you? That depends on what has happened. If you are found not to have kept the IP in good tenable repair, therefor exposing the tenant to a risk of injury insurance may not cover you. Negligance is a criminal act which is not insurable.
A tenant sucessfully sued her landlord for $1.2 mill for tripping on a hole in the carpet, claiming chronic back pain. This could wipe out many investors as most will not have a lazy $1.2 mill to pay this type of bill (plus legal expences).
I believe that insurance companies are out there to make money. For this to happen, the less payouts the better for the share holders.
Hope this helps
CATA
Asset Protection Specialist
[email protected]
