Hi,
If a person has only 1 property, should he/she hold it as a sole proprietor, or is it better to hold it in a company?HOw much is it to transfer from own name to company in the future? Or should set up properly in the right entity from the start?
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Hi Fullout,
I guess this depends on what you are trying to achieve. If it is to protect the asset from creditors for example, it would be better to hold it inside a trust with beneficiaries. It can also allow you to distribute income to various beneficiaries for tax purposes etc. However, you must consider that if an asset is held in a trust or company name, a bank may not be willing to lend against this asset unless the company or trust has sufficient income to repay the mortgage etc. There are many things to investigate before deciding on the appropriate structure to hold assets in. For this reason you should contact an accountant or expert taxation adviser that specialises in property or alternatively a financial planner….if you can find one that won’t try and flog you a managed fund or insurance instead heheheh[
]If you transfer the title on a property in the future from one entity to another you will be up for CGT and Stamp duty and of course the legal fees to make it happen. (everybody wants a piece of the action)
Cheers
Ca$hkingHi fullout.
The usual advice is NOT to buy appreciating assets through a company. For one property a trust would probably not be worthwhile because of the costs. Ca$hking is right about the transfer costs too.
Lenders don’t mind lending to trusts as they will take director’s/trustees guarantees on the loans.
Have a look on the Somersoft site http://www.somersoft.com/ and do a search in the Accounting forum. There is much discussion!
TerryTerence McMahon
HomeWin
Finance
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