i have been told if i am going to have a fair few house as that is my plan but i am still doing alot of the research i ahve been told im better of to put them into a company in case things go wrong and if i dont do i need to have an abn for gst reasons with the rent comming in if its a cf+ property thanks kev.
Kev
A company is good to limit liability, so if you are buying the houses for development, as opposed to long term hold, it should do the job (you might even want to use a separate company for each project).
However, a company is not eligible for the 50% CGT discount when a property is eventually sold, so if you are holding the property as a long term investment, a discretionary trust is usually a better way to go.
Obviously, tax is not the only consideration (eg, asset protection, matrimonial issues, estate planning issues, etc). Should really talk to an advisor to consider what is best for you in your specific circumstance.
Eddie
[email protected]You can't claim the gst on resi property – you might need advice as to what structure will best suit your situation
Having a company will only have limited effect with property as you would be required to give personal guarantees for loans. They would help if something happened on site, for example, and someone was injured and insurance didin't cover it. Pretty remote, but it could happen.
Having a trust would be more flexible tax wise – with same asset protection with corporate trustee.
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 heaps but this maybe a dumb question as i am new to all this and still learning what is a trust?
A trust is a relationship – the trustee agrees to look after the trust assets for beneficiaries. In a discretionary trust, the beneficiaries are usually not known until the trustee decides to make a distribution. In tax though, a trust is an entity in its own right and in some ways, it is like a funnel – income goes in and comes out to beneficiaries as directed by the trustee.
I think it will be worthwhile for you to see an accountant, Kev, just so that you get a good understanding of these things.
yeah i am planning on it, just doing what research i can aswell thanks for your help.
kev2008 wrote:yeah i am planning on it, just doing what research i can aswell thanks for your help.Let me know if you need any referrals.
Eddie
[email protected]i shall do thanks heaps mate
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