Hi
I have just setup a $2 shelf company to act solely as trustee and a discretionary family Trust and am about to buy my first property.My Conveyancer, accountant and Lender/Bank are giving me headcahes as they know bugger all in respect to what I think are simple trust questions.
My questions are simply:
1. In what name do I buy the property in ? The bank and conveyancer say it has to go into the company name? If this is so, then if I put the property in the company name how or where is it noted that it is actually in the trust or a trust asset ?
2. If I were to be sued under this structure of corporate trustee and a family trust, is it not easy to sue a company which has property listed in its name if it was acquired in the company name ?
3. What should I be ensuring my conveyancer and account do to ensure the property actually is a trust asset and not just a company asset ?
4. Does anyone know any trust accountant experts in Sydney they can give me their number and/or conveyancer?
Thanks
RODSTER [
]Hi Rodster
I noticed the other day when looking thru the resourse section on this site that steve has a book called Wealth Guardian that is also written by Paul Harper. He is an accountant with Jeena Partners in Sydney who knows alot about structures. Might be a good place to start.
ErikaHi Erika
Thanks I actually did purchase waelth guradian and thats who/why I setup the trust under a corporate trustee etc.
It gives you an excellent overview and conceptual understanding of why you need a trust structure and whats involved in setting one up but does not go into the nitty gritty of the actual transaction. Actually I might give Steve some feedback on that.
When my bank and vendor realestate agent ask me what name I want the property in I told them the The X Family trust only to be told later by my conveyancer that I cannot do this and it needs to be in the company name which scares me as Paul Harper and Steve McKnight in Waelth Guardian CD state not to have any asets in a company name so it gets all confusing.
Add to this my accountant Uhms and Ahhs when I ask him it does not do too much for my confidence. I have as I type in my hands N E Rentons book called Family trusts and am reading it to understand this better.
Anyhow its all good fun and experience in the end but costly so I don’t want to make mistakes. Cost me $3300 to setup the company and trust in Sydney so not cheap !
RODSTER
Rodster
We have a Hybrid Trust which is a mixture of a Family and Unit trust witha Corporate trustee (boy does that sound impressive at a dinner party).
When you purchase your property it is purchased in your company name. They are buying it as trustee for your family trust, your company documents and trust deed clearly explain the relationship. So this means when you have purchased a property in the name of “Rodster Pty Ltd” the company holds the property on behalf of the “Rodster Family Trust”. The company doesn’t own the properties as a business asset so when the company is sued, the total assets are worth $2.00
Getting finance takes longer as the bank has protocols to follow so allow at least 45 to 60 days for settlement, and be aware that the bank wants to read all of your deeds and documentation to protect themselves (of coures).
Jeena Partners is obviously a good place to start in Sydney, BUT, they are very busy and don’t always take on new business. I use Dale Gatherum Goss in Melb, becuase I am in Melb, but he was recommended to me by a QLD person and we will continue to use him even when we move back to Sydney. He has written a book called Trust Magic which I thin is essential reading for people that own a trust.
Cheers
Leigh K[]Carve your own path and lead the way …
Rodster,
You are certainly in the right direction – many bankers etc. don’t know too much about trusts etc. Some do though.
Just yesterday a TerryW posted this website on this board, “chrisbatten.com.au” I have had quick read of it and all your questions will be answered there (hopefully)! The advice on this site seems exceptional. If you can contact Deacons lawyers they are also exceptional for advice on structures and assett protection.
Do you self a favour and spend a few hundred on good advice regarding this – sounds like you’ve already spend a $1000 or so registering a company and trust etc.
Chris (:
Thanks Leigh
You have confirmed what I was thought was the way it works so really apreciate it. I feel sorry for your dinner guests [
] if they have to sit through understanding trusts whilst having dinner.
I’ll look into getting trust magic as Rentons book Family Trusts claims to be written as a plain english guide but it is slightly outdated and I find it heavey reading.One more question if I may Leigh:
in regards to ensuring the trust deed and company documents clearly identify the trust relationship – who does this accountant or conveyancer ? I would guess the convayncer would. I think the conveyancer needs to lodge a “delcaration of trust” along with certificate of title to the land titles office.
Chris thanks for the tip on Chris battens site I’ll check it out and Deacons lawyers because I need to ensure the trust deed and company docs clearly outline the relationship.thanks guys
Angelo
Leigh is correct, the company documents should make the trustee/trust relationship clear that the only business of the company is to act as trustee. The assets will be purchased in the company name as trustee or possibly in the name of “XYZ trustee as trustee for the AAAA family trust”.
The companys bank account should probably be titled something like
“XYZ pty ltd <AAAA family trust a/c>.I’m not an accountant, so don’t take what I’ve said as gospel. It sounds like you’re being let down by your current advisors as a good accountant should know this stuff (or at least know where to get the answers).
Rod.
try this mob. i havent used them personally but they came highly recommended and i have met and chatted with them several times. once i had bought my first ip they said not to bother going through them as they charge around 600 dollars an hour. they are in sydney and they specialise in trusts and property. i wasnt worried about the price at the time but the recommended one of their associates here in canberra and he is brillaint.
heres the contact details:
bdo financial services
level 19, 2 market st sydney
02 92865830
give them a call, whats the worst that can happen (well you will have to pay for the call)
hope this helps
shaunHi there rodster – I know nothing about trusts but my wife is PA to a senior partner of property at Deacons in Melbourne. I can ask her who you should talk to if you like?
(chuffed to be able to help on a topic I know little about [
])riff
What the mind of man can conceive and believe, it can achieve.
Rodster
We don’t have many dinner parties, don’t know why[?]
ANyway, I was going to say the same as RodC, your account is going to do your books at the end of the year, if he doesn’t get it know what will he be like at the important times.
Get a good accountant.
Cheers
Leigh K[]Carve your own path and lead the way …
i wasnt worried about the price at the time but the recommended one of their associates here in canberra and he is brillaint.Hi Shaun,
If I can ask who are you using in Canberra? I’m looking to change accountants and looking for a competent advisor in Canberra.
Fabian
i’m not sure what this guy charges, i have only spoken to him on the phone several times with questions. he was happy to answer and always rang me back. spoke to him last week and i pumped him for information about redraw facility tax deductions etc knew what he was talking about.
anyway heres his phone number etc.
John Dellavedova
02 62488500
17 Barry drive (in the city)
anyquestions just email me
[email protected]Rodster. I had the same problem after i set up my first trust – the conveyancer just told me off for not knowing what I was doing.
Now I know that the trustee buys the property in their name on behalf of the trust. The title is therefore in the name of the trustee. The trust minutes document that the the trustee was buying for the trust.
However, I am not sure how the state revenue office know about it. Trusts don’t get any tax free freshholds on land tax, so i suspect there must be a way they find out if property is purchased in trust.
If your looking for advice, chris batten looks good (www.chrisbatten.com.au) – I have heard he charges about $400 per hour, or I would try Dale GG in Melbourne, as you can do everything via phone or email these days. Ditch your accountant if he is not sure-otherwise it could be costly.
Terryw
Discover Home Loans
North Sydney
[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
Rodster
Whilst we are Qld based we normally charge $300 for the initial consultation which can be by phone, email and then $220 / hour.
Feel free to email me and i will direct your enquiry onto Steve who looks after all Trust enquiries.
Cheers Richard
[email protected]
http://www.fhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
i’m not sure what this guy charges, i have only spoken to him on the phone several times with questions. he was happy to answer and always rang me back. spoke to him last week and i pumped him for information about redraw facility tax deductions etc knew what he was talking about.
anyway heres his phone number etc.
John Dellavedova
02 62488500
17 Barry drive (in the city)
anyquestions just email me
[email protected]Hi Shaun.
I’m looking for more experienced advisors and an experience personal/property accountant and solictor is a must. I’m looking to get a Hybrid trust/company setup to help with what the ATO calls an “Alienation of Personal Services Income” issue.[
!]Thanks,
Fabian
[email protected]
Quote:does anyone know what tax rate a trust company runs on cheers.
does anyone know what tax rate a trust company runs on cheers.The company (corporate trustee), generally won’t pay any tax if the company’s only function is as trustee, as it isn’t earning income in it’s own right. Any income earned by the trust will be distributed to the beneficiaries who are then taxed at their marginal rates.
Rod.
Thanks Everyone for their input.
I have almost finished reading N E Rentons book Family Trusts and it has made things much more clearer coupled with the posts on this chat forum so thanks to all who replied.
quote:
does anyone know what tax rate a trust company runs on cheers.
Rod is correct – the trust does not pay tax but has to lodge an annual tax return showing the income acquired for the year. The liability of tax on income derived by a trust is levied on the beneficiaries who have recieved income from the trust and they are then individually taxed according to their own marginal tax rate. Having said that if income is earnt but none distributed to beneficiaries then the trustee is liable to pay tax as they are an agent for the trust estate. If this a comapny is the trustee then this is limited to 30% etc.
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