Hw can i buy property with a business name as opposed to purchasing under my own name. ultimatly to avoid tax. what others options are there? thanks in advance for any info.
Instalment warrants. Because they are so complicated, the government can’t understand how to tax them, so they just don’t
Instalment warrants. Because they are so complicated, the government can’t understand how to tax them, so they just don’tExcuse my ignorance ,[
] this is all new to me. still learning ,but what is instalment warrants ?An instalment warrant is a share product which is constitued by instalment of capital(cash) and a portion of loan.
The product is traded like a share on its own market.
Interesting things happen to instalment warrants when the share goes up and down. If the share goes down then the capital dissipates (loss) but if the share goes up a capital gain is made which can be realised tax free if you keep the warrant and restructure its loan.
Don’t quote me but I think having a company as opposed to a business name means the bank cannot reposses personal assetts not in the company name.
So if you have a PROR it cannot be taken off you.I could be wrong.[
]HAROLD ,
Thanks for taking the time to explain instalment warrants .I am Finding that reading through the forum pages are a great source of info , I am happy their are so many people out there willing to share their experiences and offer advice to us that are less informed , thanks []Nu Gen
The banks will still be able to get you whatever structure you use as they require personal guarrantees from directors and/or trustees.
Freeby
The best way to minimise tax is to minimise your earning. ie by paying for things with pre-tax dollars. eg. that holiday to the goldcoast, it was really a trip to inspect one of your properties, the internet is for buisness purpsoes etc. Have a look a Dale Gatherum Goss’s “Trust Magic” for some ideas on this.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
freby: gotta ask, why do you want to minimise tax?
Taxes bring schools, hospitals, public transport and other good things that make things civilised and add value to your IP (if it’s well-located).
If you’re paying lots of tax, it must mean you’re earning lots of money, which is a good thing, is it not?!
Peter
freby: gotta ask, why do you want to minimise tax?’cause it is way too high in this country and it is mis-spent on bribing voters!
A ridiculously small proportion is spent on schools, hospitals etc.
I must agree that taxes are far too high. This is one of the most highly taxed nations on earth. Imagine if Americans paid 48.5 cents in the dollar on incomes above approx 35,000USD (rough equivalent to 62,500AUD.
Combined with CGT and stamp duty, there is a strong disincentive to invest or get a better job to ear more money.
Perhaps we need an accountant to ‘go over’ the governments books and restructure their portfolio[
]Harold
The interest part of the warrant is tax deductable, not tax free. The capital gain is taxable, the warrant issuers provide daily information about the interest and capital component, and the tax office doesnt seem to have a problem working out what tax needs to be paid.
Instalment warrants are not traded on their own market, they are traded on the ASX like all warrants. They are a great investment tool, because most dividends (except special divs) are received until expiry, and interest is fully deductable. Franking credits and voting rights are also retained. They are a great tool for positive geared investing when used on high yield stocks, and a good trading instrument for the short term.
I must admit that the Australian tax schemes do seem to be quite harsh.
The highest tax bracket in NZ is 39%, and companies are taxed at 33% regardless of their income. No CGT and no stamp duty.
However if you are negatively geared, the tax refund can be a lot better than over here.
Andrew
http://www.rentmaster.co.nz
Software for LandlordsHi freeby,
Yes, it’s a fair comment. Why pay any extra tax than you LEGALLY have to?
I would definately recommend that you buy Steve’s “Wealth Guardian”. It’s available from this website. Good value for money and it explains all the different structures available and it’s in layman’s language.
It is not usually a good idea to buy appreciating assets in a company name as you will miss out on the 50% CGT discount, unless it is through a Trust Structure.
Perhaps do a search on this forum on “structures”, or “trusts”. These topics have had a lot of discussion.
Good luck,
Del
Also, one must look deeper than the marginal tax rates on income.
We have multiple layers of taxation; therefore we must look at the overall taxation burden, which in Australia is in excess of 50% and the second highest in the developed world.
Going back a few years our welfare bill was A BILLION DOLLARS PER WEEK.(dont know what it is currently)
Thats about $120 per week per taxpayer.
Unnacceptable
Wayne
Go to the ATO, fill in a Form NAT 2036 – 3.2003 .
Then work out a way that the ATO will be happy that you basically pay zero tax. ( 100% tax deductions = 0% taxable income ) [][8]
I suggest very few people would object to paying a reasonable percentage of their income as tax to fund necessary services and assist those who are genuinely unable to fend for themselves.
The keywords are ‘reasonable’ and ‘genuinely’. Most people do object to paying an unreasonable percentage of their income as tax and to funding unnecessary bureaucracy, politicians of every hue, bludgers, etc.
Hence the Pay-as-you-go income tax deductions from employees and the GST. Politicians and bureaucrats know that its better to take your ‘hard-earned’ from you before you get your own hands on it otherwise, God forbid, you might use it to create wealth for yourself!
Don’t buy in to the propaganda that it is morally correct to happily pay the iniquitous rate of personal taxes in this country. You may not have a lot of choice, but you don’t have to smile as you’re being screwed!
That said ‘income minus tax’ is much better than no income – no tax!
Cheers[
]I knew you would pick me up on the warrants, Crashy
I’m no expert but…I’m not really concerned with the interest which is deductable (bonus)… and of course if you dispose of the warrant its capital gain assessible.
More to my point is what happens when you renew the loan on a warrant whose derivative share has increased. Capital gain kind of ‘ooses’ out in a tax free fashion. Maybe you could explain more how this happens but I knew more when I was right into stock.
Warrants are a great tool for high income earners. If they lose, then that’s a deduction, when they win there is much scope for tax free capital gain. Beautiful
Hi Harold
I have read a lot about instalment warrants, but have never been told they are tax free when converting. This doesnt mean you are wrong, its just odd that such a huge benefit (if true) would be omitted. I scanned through my textbooks but couldnt find a definate answer, may I ask where you got your info from? Im very interested in finding out.
Perhaps an accountant here can help?
I second you, Brianhc. I would rather give my money to reputable charities than to a bungling, government which thinks in billions and for whom 100 million mismanaged here and there means nothing much.
It’s a joke. The cost of maitaining roads, schools, health etc is ridiculous and I wonder where the money goes.Harold
after much reading and thinking (my brain hurts) I think I know what you meant.
converting a warrant to a share is simply restructuring a loan, you are not selling anything so there is no capital gain, and therefore no CGT.
‘cash extraction’ may be what you were referring to, where you can convert shares into instalment warrants (taking out a loan) thus keeping the difference. this is an alternative to selling where a CGT event would be triggered.
the funny thing is, that opens a loophole. if you sell a warrant and buy another, you pay CGT. but if you convert them into a share, then convert them back into warrants you pay no CGT. which is the way it should be, as you are not actually getting rid of the asset.
] this is all new to me. still learning ,but what is instalment warrants ?
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