I was just wondering what sort of structure you guys use to buy (or planning to buy) Investment properties ( trust, company, company+trust … ). If you can explain also a bit about your structure saying why this is good for you that will help other people a lot.Thanks
Amit
what’s your situation first?
do u earn > $80,000
do u have a family
are you a professional
are you at risk of litigationdiv43,
no family
yes professionl ( I guess ) [
]I was interested in knowing about other people structure. I think not much people interested in telling [
]Amit
Personal
Corporation
Trusts – discretionary
– hybrid
– unit
Superannuation Fund
Offshore Trust and Offshore corporations (Canary Isl, Bahamas, Liecheistant, Nevada, Monaco, Austria)Amit, have you got any other True Assests to use
as “collateral” things like collectables, coins,
antiques, toys etc.
you may be can go into the more advanced IP’s as
you want using these as your basisThanks Div,Sach,
I think I didn’t put my question clear enough. I was asking how other people doing there structure. I know it’s depends on individual but still good to know how other people protecting assets and minimisning their tax etc with their structures.
Amit
oh ok, wording can sometimes be very confusing.
best of luck for it all.Hi Amit
On this side of the Tasman Sea, I set up a family trust which owns the properties and within the trust we operate what is commonly called a LAQC. A LAQC is a Loss Attributing Qualifying Company. This allows us to claim immediate tax losses from our residential properties and put it against my normal income.The process seems to work pretty because I’ve been very pleased with the results over vthe last two years.
regards
Hi amit
i own our own home in our name, so when we sell we are exempt of CGT. However i’m thinking about renting it our so i will probably sell it to the family trust.
All of my Properties are owned in a Family trust. I am the trustee and the properties are still in my name but purchased in my capacity as trustee.
The reason for the trust include the ability to distribute the profits to the lowest incomes in the family. Assett protection is also an advantage. the other advantage is that if i die we don’t have to worry about transfering assetts as the trust continues on for 9oyrs or whatever it is.
regards westanhi i am new at this game as well and was recently looking into this topic my accountant advised me against opening a company and trust fund as having a company doesnt protect you because you are the director you are still liable for it and it is quite expensive to start up and their are on going fees involved… what do others think about this subject??
Kristine
i agree with the accountant about the company structure because
1. costs to set up and administer
2. Could be a higher tax bracket always 30% tax.
3. no provision to get the 50% Capital Gains free of tax.
westanJust clarifying something.
A company in itself owning property will not get CGT discount but a trust with a corporate trustee in it’s distribution could allocate the gain to the lowest tax beneficiary. Thus a trust can (via distribution)allocate the gain and allow the 50% discount to be passed on.
As tot he tax bracket this again applies if it is purely owned by the company. If the trust were in place as well that will change things.
Costs are a factor but I am structuring myself for 5-10 years down the track when the appropriate structure will really start to make a difference for me.
I am not an accountant and I would strongly suggest buying Steve’s Wealth Guardian for the information it has and how it explains the ownership options for property. Check it out at…
https://www.propertyinvesting.com/resourcesEnjoy
AD [:0)]
(Andrew)“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
I am not using structures yet because it would lose me money, for various reasons – what westan said, plus the cost of setting up and maintaining structures would be more than i would ‘save’ in tax.
Also, doing something solely for the purpose of ‘saving’ tax is illegal, i heard. (asset protection is another thing however)
I like muppet’s idea and when I do something it will probably be something like that.
cheers-
MiniAD’s right,
Kristine,
The protection side of the trust with a corporate trustee isn’t about protecting you from your liability if something goes wrong with the trust’s investments. You’re quite correct that if you are director you can be held responsible.
The protection is that if you are held liable for actions outside the trust (eg: you are sued personally) then you don’t lose the assets that are in the trust – because they’re not yours.
Whether you need this type of protection depends very much on your own circumstances.Westan,
Will you have to pay stamp duty if you sell your home to the trust?
Rod.
Hybrid Trust with corporate trustee
Primary beneficiary being 2 different discretionary trusts and unit holders being superannuation fund, individuals, corporate beneficiary and the 2 different discretionary trusts.We’re in the process of buying our first IP in our own name. It’s not clear to me why it is not a good idea to buy properties in your own name. I kind of like to keep things as uncomplicated as possible[
].
What do others think about this, is this just being too ‘simple’?
Regards, CVZbuying things in your own name could be parlous
u should be concerned about litigation and tax consequences
look at the structure that suits u
unfortunately in this complex society we live in, buying assets in your own name is parlous
Does that mean just having the property in a trust does not cover in asset protection?. Is the company structure needed for asset protection?
cheers,
stefanfor tax purposes, you should not purchase appreciating assets under a corporate structure
Hi all again
RodC
yes i will have to pay stamp duty, if i decide to place my home in the family trust.Stefank
you still have assett protection in a family trust even if it is not a corporate trustee.Mensch
Boy i’d hate to see your accountants bill each year. why the need tohave multiple trusts as benificaries? Is it nessassary.
westan
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