We are wanting to make a start in property investing and know we have to work out which structure to buy property in before we purchase anything. I have my own small business and my wife works part time. We do have an accountant but I think there may be better ones around. Is there a 'one fit all structure' or is it different for eveyone. Any help much appreciated.
Martin
Welcome aboard, Martin. Enjoy your stay with us!
Investing and structures is really a different for everyone thing and would possibly even be dependent on the structure of your current business and what your objectives are.
For instance, my objectives are asset protection, passive income and flexibility as to who gets that income, so I have my IP positively geared in a Discretionary Family Trust, controlled by a company of which I am the sole director. That fits my objectives and situation but may not yours…
You say you think there could be better accountants out there, best place to start is by asking friends / family / *other investors* if they can recommend anyone and sitting down with them to see if your hunch is right. No harm getting a second opinion.
Thanks for the reply imugli.
We currently operate our business within a family trust structure, and perhaps I should create a new one for property investing to help protect the assets from creditors of the business in the unlikely event that something should go wrong.
Can you still claim all the deductions in purchasing and running the IP in a trust and do you still get access to the capital gain reduction after 12 months?
Also does anybody know of a good accountant in eastern suburbs of Melbourne and who do I approach for good borrowing advice
Thanks
Martin
Martin63 wrote:Thanks for the reply imugli.We currently operate our business within a family trust structure, and perhaps I should create a new one for property investing to help protect the assets from creditors of the business in the unlikely event that something should go wrong.
Sounds like a good idea to me but again, figure out what your objectives are first. Trusts cannot distribute losses, only use them against future profits, so they're probably not the best structure for long term negative gearing. Great, however, for asset protection, CF+ investing and the 'legacy' factor.Quote:Can you still claim all the deductions in purchasing and running the IP in a trust and do you still get access to the capital gain reduction after 12 months?The deductions are made by the trust against it's income, not against your personal income – so things like interest etc don't reduce your taxable income but reduce the trusts taxable profit / loss. I believe trusts are eligible for the CGT discount – check out http://www.ato.gov.au/individuals/content.asp?doc=/content/33727.htm for more info.
Can't help you with the accountant out east, sorry…
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