Hi, I am completely new to property investing. I just finished listening to rich dads road to riches – property investing talks and found this site. In the talks, he says its foolish to own properties under your own name and you should hold the properties inder a llc or other business structures. I figured this was most likely an American strategy to avoid being sued and for tax henefits and wouldn’t be neccesarry here in oz. After reading bits and pieces on the ATO website its not clear what benefits would be gained by holding properties in a company or if this is even possible.
What do people do here in Aus? Do you own properies under your name or is there a better way?
Any info about this would be great.
Thanks
Hi Onemind,
You may want to explore the benefits of a trust,
As discussed here,
https://www.propertyinvesting.com/forum/topic/12469.html?SearchTerms=trustRegards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
There are some disadvantages to owning a property via a company. the major one is you will lose the 50% CGT discount. Look at trusts instead.
Terryw
Discover Home Loans
Mortgage Broker
[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
Just on the issue of trusts, does the actual distribution to the beneficiaries take place (eg you sell a property owned by a trust and make a profit of $20000.00, are you required to distribute to say four beneficairies @ $5000.00 ea for the purpose of the trust). I assume the beneficiaries then have to declare the income annually on their tax return??
I also assume that apart from the legal protection a trust may give, if the property owners are low income earners then there isn’t a great advantage in having the trust anyway?
And finally for those of you who use a trust as an investment vehicle, who do you name as beneficiaries. I assume your partner or spouse is one of the few but in light of the tax implications for children, there wouldn’t appear to be a lot of advantage in making them beneficiaries.
Any thoughts greatly appreciated
markk
Happy Hunting
http://www.kentscollections.comHi debtdogg,
Get a copy of “Trust Magic” by Dale Gatherum-Goss.
It will clear everything up for you.You can buy it online at http://www.gatherumgoss.com
cheers
rThanks for the info guys.
That trust book looks interesting, i will have to get a copy.
Thanks againMarkK
I don’t think you are required to actually distribute the trust money, you just make a book entry. The beneficaries will have to declare what they ‘receive’ as income, and you will need an agreement with them that they give the money back to you.
There is still benefits if the ‘owners’ of a property are low income earners. Under certain circumstances, if someone goes bankrupt or sued, the trust assets are unable to be touched as they do not belong to the owners. So extra asset protection is available.
With beneficiaries, you try to include as many people as possible without naming them. eg. any former, current or future sposue and their chidlren, parents, grandparents, cousins, uncles, aunties, step childrent, adopted children etc. You are probably a beneficiary of my trust!
Terryw
Discover Home Loans
Mortgage Broker
[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
Interesting Terryw,
but how do you put that into the Trusts wording?Cheers
C@34
Thanks Terry W
Thought it was something like that. I think I will get Trust Magic as suggested by Richmond. That will give me some insight
PS Richmond-Love their mission statement at http://www.gatherumgoss.com/
markk
Happy Hunting
http://www.kentscollections.com
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