I am going to finalize purchase of an industrial warehouse soon as the new building is near completion.
I have my doubts as to whether I should purches this unit as individual person ( or family trust) and then lease to my own distirbution company or rather buy as LTD company asset?
My plan is to use this unit for a year or two then lease or sell on the market.
There few other aspects that I am not fully clear on:
-GST. As company registered for GST I can claim that amount back, What happens with GST when purchased as an individual? Do i have to also pay gst as an individulal if I decide to sell the property after two years ?
-Stamp Duty – Is it free on new building purchases, either as individual or company?
-Tax calculation . Are there any advantages of buying as company assets?
-Risk. How safe is the unit as a company asset in standard operation in comparison to individual ownership? As distibution LTD in day to day operation, there is always risk involved.
Any advice will be appreciated.You are more likely to be better off (asset-protection wise) by having the unit owned in a separate entity to the working company, a family trust or other structure would do this.
Your company could then lease the property from the other entity, thus ensuring income to pay the loan (although you, or a director of the company may have to guarantor the loan and or lease).
As you are purchasing with vacant posession, you may not get the gst exemption as you would if it were a 'going concern' however you should speak to your accountant on how to minimise the time between purchase & recovery of gst paid.
There are some concessions for new building purchasers where they are bought off the plan.
Tax Calculation – see your accountant to advise.
Risk – ownership within the operating company will leave the factory at risk if your company is ever wound up or goes into liquidation. It is probably best to lease it from you or a related trust.
Get yourself acquainted with any concessions that you may get for cgt reduction, land tax liability etc through various ownership structures,
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You should probably use a discretionary trust with a company as trustee – to reduce the risk if a tenant sues. This should be a separate trust and company to other business ones.
You may also want to consider the tax concessions for small business assets
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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