Could anyone please tell me what the difference is between purchasing an investment property in your name or a trust,which one is better.
Thanks D.J.
Huge difference.
A trust is usually better for the following reasons:
– Asset protection
– Tax reduction
– Estate planningA personal name may be better for
– cheaper
– negative gearing benefits (although this can be done with a hybrid trust)Terryw
Discover Home Loans
Mortgage Broker
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
Hi Terryw,
Thanks for the advice,could you please elaborate further on this as I am still unsure.
I am thinking of purchasing in oz and overseas and not sure of the best setup.
Thanks D.J.Asset protection is due to you not owning the asset. You are holding it on behalf of the beneficiaries. If you were to be sued, the trust assets would (probably) be safe. So even if you went bankrrupt, you may not lose these assets.
Tax advantages are due tot he fact that the trustee can choose who to pay the income to each year. eg. one year a wife may be off work after having a baby, so all of the income can go to her. The next year, she goes back to work and the husband takes a break, so all the income can go to him. The first $6000 will be tax free. If you held the assets in your name, or in a company this would not be flexible.
Estate planning. When you die, you may leave your investment properties to your children. This may trigger CGT to be payable. If a trust held the assets cannot be willed at death. The trust is just handed over to the new appointer and trustees.
There are costs to setup a trust – from $275 to about $10,000. There may also be yearly costs for extra accounting work and ASIC returns etc if a company.
Terryw
Discover Home Loans
Mortgage Broker
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
as quoted from a solicitor: Trust laws will change and it will come hard on those who have trusts. or words to that effect, correct me if im wrong.
I am sure they will change, but you can’t sit about worry about things that haven’t happened. Trusts are still an excellent way to hold assets and will probably continue to be.
Terryw
Discover Home Loans
Mortgage Broker
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
Hi
I am very interested in this talk about Trusts (COY). I have no debt a good salary as does my wife. We just at the point of selling our home residence and looking to purchase numerous investment properties (currently have none) with the proceeds. Is it better to start now with a trust or to simply start in Joint names? How does one set up a Trust in order to benefit fully from its structure ie to increase leverage (ability to borrow more)and reduce tax? Can any accountant set this up or is it specific to the individuals which would take the expertise of an expert in the field? Are there any good books or forum posts?Thanks
If you are planning on buying a few properties, then it might be worthwhile setting up a trust to start. Any accountant could set one up, but there are many out there who do not have a clue. Try http://www.gatherumgoss.com for a good accountant who also has a book on trusts for sale.
Terryw
Discover Home Loans
Mortgage Broker
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
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