Cata just to clarify from reading your post almost seems to indicate that if you run your business through a trust and the trust (and assume the trust holds asset) then a corporate trustee will provide total asset protection.

This is not the case as under State’s legislation a trustee has the right to be indemnified out of the assets of the trust…[Read more]

I would recommend you put a formal loan agreement in place to demonstrate commerciality. But essentially yes as long as you declare interest income in your return then the interest will be deductible against that income.

I have a number of clients, particularly high net worth clients, who lend money to various entities to undertake a range of…[Read more]

1. Very important to understand the responsibilities of properly managing a HDT. Also be cognisant of the advantages and disadvantages of operating through a HDT.

2. If you purchase all the income units then YES the TOTAL income should be returned to you. Although most trust deeds will allow distribution of income to other beneficiaries when…[Read more]

Snowball,

Our practice is located on the Central Coast and have assisted numerous property investors in establishing and maintaining their structures. You can check out our website at http://www.guardianpartners.com.au

Initial consultation fees are $220 per hour including GST and from there we can develop a strategy appropriate to your…[Read more]

If your friend is currently a resident for tax purposes and the assets are held in Australia then ceasing residency for tax purposes will not crystallise CGT.

The link that hellman provided should be printed out, given to your friend and they should provide this to their accountant.

It clearly states “If you stop being an Australian resident for…[Read more]

Dazzling,

Brett Davies at Brett Davies Lawyers (also runs the LawCentral website) would be a good option. Brett is well qualified holding a Bacehlor of Jurisprudence, Bachelor of Law, Masters of Law, Bachelor of Arts (Hons), MBA and is currently completing his PhD with his thesis being in asset protection.

Well versed in trusts, property, etc.…[Read more]

Rebecca,

Here is a little information with respect to trusts and how things work in the case of bankruptcy.

Firstly a trustee is personally liable to creditors in respect of debts and liabilities incurred on behalf of the trust. It is a statutory right found in the trustee’s legislation in all States. The right to an indemnity provides the…[Read more]

Might be able to make it. Where is it located and what time ? Do you know who else is going.

If I do attend then I will bring along my copy of the 2005 Trust Structures Guide.

Its been around for a while now. Ive been purchasing it through the Taxation Institute of Australia for the past few years.

In my opinion one of the best value books on trusts available. Easy to read, lots of diagrams and great for the professional.

I think it would be too heavy for the novice but for those interested in a good in-depth…[Read more]

This is a starting point. But unless you plan on becoming a tax consultant it can get quite complex.

Income Tax Assessment Act 1936

http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1936240/

Income Tax Assessment Act 1997

http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/index.html

To give you an example taxation legislation…[Read more]

Has your sister considered having her husband entering into a salary sacrificing arrangement with his employer for the interest component.

Subsection 138(3) of the FBTAA considers the situation where a benefit is provided jointly to an employee and an associate. It states that where a benefit in respect of the employment of an employee is…[Read more]

Given that one requires a basic understanding of law to interpret the application of rulings applied by the courts to determine the effectiveness of asset protection strategies then I find it rather ironic that one would advise against consulting with a lawyer re asset protection strategies. Who do they suggest you see ? a cleaner or pool…[Read more]

Redwing,

What amazes me is that some people are making recommendations to people to quickly setup a trust and move their one IP to the trust in case they get sued.

When you talk to these people they are working in an extremely low risk industry (usually an employee for a major corporate), have one investment property, basically have no equity…[Read more]

The consultant is incorrect.

One advantage of a discretionary trust owning assets, or conducting a business, is that no one beneficiary has any claim to the assets of the trust. It is the trustee of the trust that is sued not the trust itself.

There are a lot of these so called “asset protection specialists” running around town predicting that…[Read more]

Holding an appreciating asset in a company (other than an active asset and residential investment properties are deemed not to be active assets) would be a terrible decision. You would loose the 50% CGT discount and pay a flat tax rate of 30% on the capital gains.

You could sell the shares in the company as opposed to selling the asset itself…[Read more]

IKerr,

We have a practice located in North Gosford if you are interested. Our consultations fees are $220 (including GST) for the initial consultation.

Our speciality is complex structuring for investment and business ventures including the use of hybrid trusts.

Thanks for the mention Scott.

Some of my clients do have an additional trust at the top being a unit trust. The units are then issued to the hybrid discretionary trust and special income units issued to the appropriate individuals. The benefits of this structure, although slightly more complex, is to allow the asset to be transferred to a SMSF at a later stage (note if…[Read more]

Giulio,

You should consult an accountant for structuring before entering into a property development.

Things that need to be considered :

1. Who will be the landholder;
2. Who will be the development entity;
3. Do you wish to retain any of the completed development or another party will retain the development;
4. Is the land pre or post…[Read more]

“And you know as well as I do that income from a trust must go to the guarantor of the Loan for that property anyway, so you don’t get this benefit to distribute to all family members until the property is neutrally geared and sits stand alone in the Trust.”

Why must the income go to the guarantor of the loan ? If an individual has established a…[Read more]

Not deductible under Section 8(1) of ITAA or Section 25-25 as a borrowing cost. Refer to Ronpibon v FCT and Maddalena cases. Would ordinarly form part of the capital cost of the asset.