Forum Replies Created
Sorry guys, I do not know why it posted a duplicate. I forgot to mention that I work in the mining industry and am currently earn a salary of $108 k so would not be stretching myself hugely.
Dear Cata,
Thanks very much for that, it clears things up a bit more. The reason that I am so interested in them is that I am currently doing mining engineering at university and am in my final year.
I am fortunate in that I should graduate on about $80 000 a year and if possible I do not really want to pay half of this to the tax office. This is why I am looking at Ferraris, but I think that I actually prefer Aston Martins!
Once again thank you very much for your help. I now have to think about things a bit further and then start getting on with it.
Regards
Anthony
Zimonya
Dear Cata,
Thank you very much for your help but I am not sure that I fully understand the information on HDTs. I probably need it spelt out really plainly.
Once again, thank you very much for your help.
Regards
Anthony
Zimonya
Hi again,
Further to the above, I was wondering if anyone might be able to further enlighten me as to hybrid discretionary trusts.
Do they give you total flexibility in directing operating losses to entities?
Also how much more do they cost to run and set up?
I am trying to work out whether they are worth pursuing at all as surely once you have established enough cashflow for yourself it would be more tax effective to have a balance between a cashflow positive investing strategy and a negative gearing one.
Mind you if you can acheive both good capital gains and cashflow you would not bother I suppose. I need to get stuck in and try.
Once again, thanks for any help.
Regards
Anthony
Zimonya
Hi,
I think that I know where you got the concept – the Chris Batten website. From what I understood it is a term he has coined for any property that is not bought in a unit trust structure as the gist I get is this is the only structure in which you can transfer the ownership of the property into a super fund or pension fund. I hope this helps but I probably did not understand it entirely correctly from the website.[blink]
Zimonya
Dear Ronulas,
Really good post, it is just a pity that so few people appreciate it, jealousy kicks in too quickly for the brain.
I am a farmer’s son from Zimbabwe and so have seen it first hand!
I had better not go into details as it could be a long post but some people might like to look for ZWNEWS for a look at how different other parts of the world can be.
Something you guys might find interesting is that due to the hyperinflation occuring there real estate is hugely booming, it is interesting to see the accelerated process of inflation at work!
Cheers all and keep challenging yourselves
Zimonya
good topic this, I will tell you my answer once I have been doing it for a while as I do have age on my side.
Generally in most things in life though there is no one straight answer and different situations and markets etc might call for different approaches eg generally anyone chasing capital gains now and using negative gearing would be silly unless they found a good deal and it was in an area they were almost certain was going to grow.
A balance is normally a good thing though and so maybe the answer is to balance the +ve with -ve, leaving as much in between as you want to live off at the moment.
Well cheers and thanks for the stimulation!
Zimonya
Dear Native Metal
I am still new at all this but from what I understand it is not the same thing. The COCR that Steve talks about refers to the cash return that you will recieve on your overall invested funds. IRR meanwhile refers to the net overall return that you will recieve from the property taking into account changes in capital value as well. Hope that this helps
regards Zimonya
Zimonya
It is really interesting to hear all the discussion on this topic. It will be interesting to see how it unfolds. I am left wondering why the government seems to be looking for a quick fix solution given that their next election is so far away.
I would also have thought that it would be in their best inerests to 1) let market forces control the market and not try to “fix” things as in 99% of cases this just tends to stuff things up. 2) Not lay this on a market which is already at the begining of a downturn. The other thing is that surely it makes more sense to keep the market more active and get a larger number of sales on which stamp duty is paid on the full value of the property, not just the profits. I suppose there will probably be an increase in the number of people trying to sell before this comes in though, who will buy? Apart from the fact that if people are making money whatever it be in they will spend it which will generate employment and have other knock on effects. The robin hood syndrome never works!
It was interesting to read an earlier post about the actual cost after considering capital gains impacts etc. I think that the effect on the market will be bigger than just the cost though.
Zimonya
Hi everyone,
I am still trying to understand all this stuff about structures and what is the best way to do it. I am single, still at uni and not overly concerned with capital gains issues as I am planning to generally hold all my future properties indefinitely. I am concerned with legal issues though. Would I be correct in thinking that the best structure for me would be a trust allowing me to distribute income to myself or a company of mine, once I have enough income for this to make sense taxwise? I read earlier that you cannot be a beneficiary and a trustee? To get around this I would appoint my father as trustee. Does this also mean that a beneficiary cannot reinvest funds into a trust of which they are a beneficiary? Basically I am looking to try and set up the best structure that I can to minimise tax on profits that I want to reinvest whilst still being reasonably legally secure. Any advice would be greatly appreciated.[confused2]
P.S. What is the advantage to having a corporate trustee?
Zimonya
Thanks for your help melbear. I will read the book as I think it is going to take some getting my head round and is a very important aspect. The trust has to pass on all its income though, right? Which would mean that the main advantage of using one over doing it personally would be legal protection as you would hopefully earn enough to be in the top tax bracket and could only spread the income over so many rellys? Thanks again[^], most appreciated
Zimonya
