Trust Issue

Hi Joe,

I have just finished openning up a trust so I think I can help you a bit.

A couple of good reasons for using a trust are:
1. Tax minimisation
2. Asset protection

In very very simplified terms, the trust can be equated to a company with you controlling it. The company buys properties (or other assests such as shares) and if (hopefully) your properties make money, you can distribute the income to nominated family members (starting with those on the lowest income and hence tax bracket first).

Also, because the trust owns the properties, if some sues you (eg if you are a doctor etc) then they can’t touch the properties because you don’t own them. This is more help for risk professions.

Another nice little benefit is the tax claims. Of course they have to be reasonable, but can include ‘meetings’ at the local pub where you can claim the cost of the meal and drinks, etc.

As for Hybrid Vs Family, If you intend on buying any negative geared properties hybrid is better otherwise family is stock standard.

They cost approx $2500-$3000 to set up and you need to complete a tax return for trust each year.

Phew. Hope that helps.

Andrew.

Blurb: Please see an accountant for professional advice.