Forum Replies Created
Motivstorm, basically they are the same thing. A family trust (from what I know) can automatically adds your family as beneficiaries, while a discretionary trust (but not a family trust) allows you to add whoever you want. Of course you get control of on how much and who gets the money with both kind od structures.
Rgds.
Lucifer_auTold you it was a bit ugly….
The Environmental Equation
At the time, these particularly devastating methods of mining caused murmurs of protest from farmers and pastoralists who could see for themselves the damage that was being inflicted upon their local ecology. Eventually, these mining methods were outlawed by governments, but not before vast areas of natural forest had disintegrated into wasteland. The most infamous example of mining damage in Australia occurs at the Queenstown region of Western Tasmania. Once a verdant expanse of mountainous rainforest and plentiful waterways, the area has now been transformed into a treeless desert of silt, sediment and ecological decay. Big open cuts channel into its topography, thousands of tones of mullock sits upon the surface of the land and the Queens River, once stained brown from the tannin of native gums, is now clogged full of chemically poisoned top soil, washed away by heavy rains.
The effects of this type of environmental damage are irreversible. Once trees are cut down, topsoil erodes away. When silt is dumped into waterways, it devastates every nexus of life in that ecosystem. Today, huge volumes of silt are still being carried slowly downstream, until they reach the sea and impact marine environments. Indeed, the mining mistakes that were made in the past century will still be felt by the Australian environment for decades yet to come.
(Cool link KH!).
Rgds.
Lucifer_au“What’s mine is mine????”
Not if you don’t have the proper structure it seems. Making sure you have the right structure seems to be paramount these days! As Gatsby said: The law is ‘F*#$ED’!….
Rgds.
Lucifer_au“Additonally if the budget is such a bad thing why has labor said it will not block it passing throught the senate?”
I didn’t say it was a bad budget – just a really, really boring one!
As for Latham, I do agree with you. It’s good he has ‘newish’ ideas, but I don’t really trust labour. They seem to like slogging it to middle to higher end income earners (as well as small/medium businesses, but of course not the super rich…).
So it seems to me that Liberal will protect my interests more, and they haven’t done to bad a job (except this budget, isn’t really that fantastic), so they get my vote (unless labours budget ends stamp duty (i.e. yeah I know it’s a state tax, but they could work something out), or CGT…Rgds.
Lucifer_auCGT is not payable on wraps. From memeory it comes under ’emerging profits’, but I would suggest as Jairus suggeted, do a search for it (it is contained in the now defunct wraps and vendor finance section (near the very bottom of the forums list)). But as I said before no CGT.
Rgds.
Lucifer_au“So would this structure give you the same protection as a trust with corp trustee?”
Not as much protection, but you have to take into account what is your chance of being sued, anyway it’s alot better than being naked (i.e. having it in your own name). The real downside to this kind of structure is the fact you have to pay 30% CGT when you sell.
The only reason I can see for using this structure is because you really, really want to control where income goes, or perhaps Sebsez can provide more info???
Rgds.
Lucifer_auPerhaps she bought those of those city units?? Or bought very expensive property at the very top of the boom??
As you’ve said she should get legal advice, esp. with this kind of issue.
“gain I also agree that Family Trusts are far more valuable; but they too (so I am lead to believe) can be problematic in times of dispute.”
Not if they are set up properly.
Rgds.
Lucifer_au“Its not pretty”
Could I say thats the understatement of the century??? Well it has to be up there with ’em!
The don’t call it the Wild West for nothing – The Good, The very bad and the very, very ugly [
].Rgds.
Lucifer_auIf you bought your PPOR and placed in a trust, you can simply rent it from your trust. This though must be fair market rent.
Rgds.
Lucifer_auSuperTed I use corporations and trusts to reduce my taxes, therefor I want things like faster depriciation write offs, changes in CGT or higher amounts in the $0-$6K tax brackets (so it would be great if it went to $0-$12K), as well as the 17% tax bracket.
‘poorer’… eh’, if you pay no tax you must be poor!
‘poorer’ some one who is not earning over $52K per yr (in this case).
But I degress – silk sheets… mmm…
Rgds.
Lucifer_auWhat about buying an inexpensive but big house first… Mabye a big house 4 bdr, and the rent to foreign exchange students (you could fit up 3 (2 per bdr)). Of course they may have to move further out if the area is expensive.
Perhaps build a place with a granny flat (so two tennants).
Sorry to harp on this point, but I really do think if you actually start paying them regular money (for their mortgage) that could actually build more resebtment than if you just loaned them the dollars (as one daughter could say, you gave them $100 p/w for the last 3 yrs. why can’t you do the ssame for me. SO it would be better to loan them the money. I would talk about it to your other daughters.
Rgds.
Lucifer_auThere are a couple of reasons. The first is that with commercial it can be difficult to rent the property out. Simply lowering the rent still might not get you any tennants, so you have to know what potentially you clients are looking for. Also you might have to spend alot more money to get the tennants and be more creative (for example you might have to put a barbed wire fence in).
With rentals you just have to drop the rent to find a tennant (or perhaps make it fully furnished). The point here is that it is relatvily easy to get a tennan, compared to commercial.
Another problem is the deposits. Usually you will have to come up with a 30% deposit, while with property you can get away with 5% (or 0% if you have equity!).
A book by Dolf De Roos called ‘Real Estate Riches’ explains the difference quite well.
Rgds.
Lucifer_auThere are certain restrictions on overseas citizens. For more info go here:
http://www.firb.gov.au/content/default.aspRgds.
Lucifer_auChanging trustee can trigger a CGT event, so do check with an Accountant as Aceyducey suggested.
Rgds.
Lucifer_auMy view is a tad harsh and I’ll admit that, but I did say
“It seems to me that you want to help your daughter, which is commendable”There isn’t that much upside here, you tried to get her to invest with you in property that has gone up in value, she refuses, yet it could of given her enough for a deposit for her own house. You offered her an incredible opportunity, yet she decided not too, how would buying her a house help her? (what happens if she stops paying the mortgage??!!!). Also you don’t want to build resentment between your children. It can poison families. And thats the problem I see. Too much can go wrong, for not enough ‘upside’.
With my previouse example all I was doing was looking at it through purely business angle. And unfortantly thats the way I would do it. Say if my daughter wanted to start a fashion shop. I would have to say – “what do you know about retail?”, “what do you know about fashion that wil give you an advantage over others?”, “what is your plan (short and long term)?”, “have you worked a management position in retail or fashion?” (I would already know this though, so I wouldn’t really ask it). If she couldn’t answer those questions I would still probably lend her some small seed money (maybe $10-$20K), but I wouldn’t mortgage my houses for her.
I want the money to last over 3 generations, so I have to be more cautious, because it isn’t my money, it is the families money, and I have to do whats best not only for my children, but the next generation after them and hopefully the next generation after that….
Rgds.
Lucifer_auP.S. the reason it makes my blood boil is because I know of a father who constantly gives money to one of his daughters and she throws the money away (in fact without her father she would have to file for bankruptcy within one week! I am serious…), while her sister works hard, is going somewhere in life and yet gets very little from her father. That makes my blood boil. Also I promise to lay off the blood statements for a while (and no pices I’m not a vampire – I promise!! L0L).
This is called economic outpatient care – and it makes my blood BOIL!!!
Lets look at it from a purely financial aspect. You have 3 stocks. One has gone up 400% and has high growth prospects. Another has gone up 100% and has just as high growth prospects. One has fallen 25%, and has poor growth prospects, but it seems to have hard luck story though… It isn’t a hard decision though, is it.
It seems to me that you want to help your daughter, which is commendable. But I completely disagree with the way you are going about it for a number of reasons:
1) I’m guessing you want your daughters to be successful. The question is do you do that by providing aid to the least successful one???
2) You have not helped your other daughters out, even to buy an IP (to make more money). Yet you are helping another one out even though there not helping themselves out?
3) Your other children have scrimped and saved, and have delayed gratification (big time in the Syd. market!), but your daughter has not? So we reward those who go out and spend money, rather than saving?
4) Do they have a plan? Does the plan involve them getting financially wealthy?? If not why would you invest in their plan?
5) What are they doing to provide extra income? Does your son in law tutor? Does you daughter run any other (home based) business??I suggest you buy the book- “The Millionaire Next Door” for yourself (this provide statistical evidence that economic outpatient care does NOT work), and buy “Rich Dad, Poor Dad” and the “Cashflow Quadrant” for your Daughter. Don’t spend the money on economic outpatient care, but spend it on education, so they can learn to fish without you having to provide the fish!
Rgds.
Lucifer_auThe 2004–05 Commonwealth Budget will be released on Tuesday, 11 May at 7:30pm, so we won’t know the new tax rates untill then.
Rgds.
Lucifer_auFantastic stats Aceyducey!!!!
Rgds.
Lucifer_auI can buy insurance to cover my liability.
Not if you are sued personally – or perhaps you could tell us how high your premiums are, because it would be huge!! (think of the guy who sued this drunk guy in a pub who won a meat raffel and then walked round the pub wearing the meat on his feet, the guy who sued slipped and the drunk meaty guy lost his new car and had to re-mortgage his house!). So the first point is limited liability (also insurance companines do not cover you if they think it’s your fault).
The other thing when yourn a sole trader is that you have to specify why you bought each car. So for example if you bought a ferrari and if the ATO audited you you would have to prove that you used that car only for business. And if they found out you had taken the ferrari with you to the beach, you would have to work out what % was personal use, and what % was business use. With a company it dosen’t matter – the company owns the car, if you take it to the beach you might be looking at RE or having a directors meeting. And I might mention as a sole trader you can’t claim meals unless you go out with a client).
This has more implications – sole trader you would have to pay a % of the car insurance because of personal use with AFTER tax dollars. The company 100% wite off with PRE tax dollars.
Also you might have to pay 15% FBT.From my standpoint though I would be seriously, seriously worried about unlimited liability.
Please Note: There are other entities you can use to get the same or similar result. This incs. trusts (many different types) and limited partnerships as well as companies. All I’m doing is showing you the benefits of one type of entity (companies – Pty. Ltd.) as well as the very large negatives of having no entities (i.e. Asset protection!).
Rgds.
Lucifer_au
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