Tax Implications for +CF

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RaYmO
Member
@raymo
Join Date: 2005
Post Count: 2
January 12, 2005 - 1:11 am
Hi,
Ive only just started reading Steve’s first book and only a couple of chapter into it…
One thing that is puzzling me right now is how I can escape the evil clenches of the taxman (the combination of my current salary with the addition of the +CF will place me in the highest taxing bracket)
I was just wondering if anyone out there have any ideas on tax minimisation strategies they have implemented on their +CF streams that would essentially put more in our pocket at the end of the day.
Thanks for any advice in advance.
Ray.
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
January 12, 2005 - 1:52 am
Discretionary trusts are the way to go.
Terryw
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Derek
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@derek
Join Date: 2004
Post Count: 3,544
January 12, 2005 - 1:55 am
Hi Ray,
I don’t see a problem – so what if you are being taxed more – doesn’t that also mean you are earning more?
Having said that I prefer to buy growth focussed properties in good, proven areas and then use any depreciation benefits to improve the cashflow and enables me to hold quality properties in quality locations for their long term growth benefits.
Derek
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FFComm
Member
@ffcomm
Join Date: 2004
Post Count: 627
January 12, 2005 - 2:47 am
If you have the right coporate structure (i.e. using a trust) you can reduce paying almost all taxes legally (except stamp duties it seems!).
Rgds.
Lucifer_au
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
January 12, 2005 - 2:51 am
Lucifer
I think you can even avoid Stamp duty in some situations if you have a good structure.
Terryw
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Robbie B
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@robbie-b
Join Date: 2004
Post Count: 2,493
January 12, 2005 - 3:04 am
Now that knowledge would be worth a fortune! I have never heard of it happening except with inter-family transfers in specific situtions and a private ruling.
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Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
January 12, 2005 - 3:33 am
The trouble is the legal fees are ususally more than you save!
But if you use a unit trust to own property, under certain circumstances the units can be transfered and stamp duty avoided.
Terryw
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Robbie B
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@robbie-b
Join Date: 2004
Post Count: 2,493
January 12, 2005 - 3:47 am
What circumstances would they be?
I was under the impression that the unit value will incur stamp duty.
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Terryw
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@terryw
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Post Count: 16,213
January 12, 2005 - 4:10 am
I don’t know for sure, it depends on which state you are in. My NSW solicitor told me their is not stamp duty on the transfer of units in a unit trust, Dale also mentions it in his book, but i think it is a little more complex than just transfering units.
Terryw
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Robbie B
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@robbie-b
Join Date: 2004
Post Count: 2,493
January 12, 2005 - 5:41 am
More information would certainly help. Will you get this?
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When I grow up, I want to be a Storm Trooper!
showmethemoney
Participant
@showmethemoney-2
Join Date: 2003
Post Count: 103
January 12, 2005 - 11:49 am
Terry
If both partners work and are in the top tax bracket, how does a discretionary family trust improve the tax position?
We are in that position. We have a Trust but I really set that up to provide another entity in which to hold property because of Land Tax. Our income tax situation has not changed.
Regards
Clive
RaYmO
Member
@raymo
Join Date: 2005
Post Count: 2
January 17, 2005 - 4:52 am
Hi Everyone,
Thanks for providing me with some ideas on what options are available out there for tax minimisation…
After getting further into Steves book, I can see his point of a positive is always better than a negative! All starting to make sense now…
Cheers,
Ray.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
January 18, 2005 - 8:49 am
Clive
Worse case scenario, if you don’t have any ‘poor’ relatives is to set up a company and distribute to that. Companies pay 30% tax. Then money will be stuck in the company, but it could then be loaned or invested etc. (make sure you do htis properly)
Terryw
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Mortgage Broker
North Sydney
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Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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