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Hi Guys,
Thanks for the feedback, I will definitely be "paying" to have the structure set up. I am firstly keen to gain an understanding of the different structures so I can have a 2 way conversation as opposed to being told what is best and merely accepting it.
I agree that if I wanted to hold any long term I would house them in a discretionary trust but this will be the odd one here and there from the developments, the main information I am seeking is to explore the pros and cons of company vs trust to develop in as this will be carrying out a trade in the entity so I would imagine that it is not best to hold any in the same entity for the long term, rather to sell them out to the long-term holding trust.
Thanks for your help.
Cheers
Richard
I am in the same position, also looking to get started in property investment & development. After reading these and other posts, is seems to me that one needs to differentiate between 1) long term buy-and-hold investing and 2) property development and selling/ trading / buy-renovate-sell etc i.e. short term holding.
If we look at 1) Long term buy-and-hold, it does seem that a Discretionary Trust structure is best, mainly due to 50% CGT > 12 months, asset protection and ability to allocate distributions to lowest tax bracket beneficiaries etc.
When looking at 2) Development etc i.e. carrying out a trade, a company seems to look the better option. This is due to the 30% flat tax rate (although this could be negated in a trust by allocating distributions) and ease of lending by banks.
So if developing, the question boils down to then, do banks prefer to lend to companies or discretionary trusts? In terms of initial purchase of the property and also subsequent construction finance etc?
A crucial part of property investing is gaining the finance to actually purchase the property, so I am keen to hear everyone's opinion and experiences. Thanks
