Hi all,
Little of our background – I have owned a property now with my partner for 1.5 years. Before we bought the property I had no idea about positive gearing and thought we were doing the right thing by purchasing a property early on in life. Since reading many books, watching many dvd's and listening to many cassettes, i've come to the conclusion that we have dug ourselves a massive hole. It's not the financial burdon that's upon us it's just that we will never seem to be financially free until we pay off enough of this property to turn it into a positive geared one (will take a life time).
I can understand why not to structure your property in your own name. What I want to know is when I set up a trust to purchase property, I believe that it has to have cash flow is this true? how do I get started? Can i role the profits back in the trust to purchase more property without much if any tax implications? Can I have another trust as a benificiary or is this illegal?
Kind Regards,
LukeHi Luke .It will get easier as time goes by . Even if the principal does not shrink much the value will increase and most probably your income will too. Dont be to worried, yove done the hardest part and that was actually stepping into the market.
Hi,
Does anyone know of a good accountant on the Sunshine Coast
luke1982 wrote:Hi all,
Little of our background – I have owned a property now with my partner for 1.5 years. Before we bought the property I had no idea about positive gearing and thought we were doing the right thing by purchasing a property early on in life. Since reading many books, watching many dvd's and listening to many cassettes, i've come to the conclusion that we have dug ourselves a massive hole. It's not the financial burdon that's upon us it's just that we will never seem to be financially free until we pay off enough of this property to turn it into a positive geared one (will take a life time).
I can understand why not to structure your property in your own name. What I want to know is when I set up a trust to purchase property, I believe that it has to have cash flow is this true? how do I get started? Can i role the profits back in the trust to purchase more property without much if any tax implications? Can I have another trust as a benificiary or is this illegal?
Kind Regards,
LukeHi Luke
With trusts they must distribute any profits each year, otherwise the trustee must pay tax on the profits at the top tax rate. Trusts don't have to have cashflow to survive. You could negative gear, but the loss will be quarantined in the trust until future years when a profit is made – you would have to inject cash into the trust to pay the shortfall (gift or loan it). Other trusts can be beneficiaries, but the incomes will still need to be distributed each year.
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
Thanks Terryw,
Could I start a trust and use it to put any spare cash Into it as if it were a savings account before I invest?
Say for instance you did have another trust as a benificiary, are the profits still taxed or can you use the profits (before tax dollars) to reinvest in another property etc?
You must be logged in to reply to this topic. If you don't have an account, you can register here.
