Risky to buy properties in your name?

Is your Accountant going to knock off your cost of CGT and Stamp Duty on these Transfers off your Accounting fees for the rest of time.

With this sort advice i would be look to engage the services of a new number cruncher.

Some say an idiot others say a genius??????

Who pays for the auditing and accounting now of the trusts and I am assuming you guys are ordering a corporate trustee?
????

Who will absorb the losses, losses cannot be filtered through a trust????? i.e. means only positive gearing is allowed. I now some very good growth occurs in negative geared properties as well.

Who gets a land tax threshold, I know an individual does?????

Partnerships work, companies work, individuals work, and combinations work…………

Estate planning may be done through testamentary trusts if this is a concern.

Asset protection??? From what / who?????   These details we do not know. So to set up costly trusts etc  may be a bit pre – mature. Yes,  transferring later is expensive. But you may only ever have one investment propertyy like average Australia, so lets not get too carried away…. 
Look, I would not suggest for a minute that one way is better than the other without taking into consideration your personal circumstances – In your accountants defence he has more information on this matter then on a blogging site. There are a lot of considerations.  I am sitting on the fence until I get all the information.  http://www.birchcorp.com.au 

Just wondering then, is it better to have a property in your own name, as well as the rest in a discretionary trust. That way you could potentially put all your excess funds (If you have interest only loans and offset accounts) into the trust fund to make those properties as positively geared as possible, and the property in your own name as negatively geared as possible to offset your income?

I was recently reading a book and the accountant ed chan said that there is away that you can transfer from a company to a trust with small stamp duty etc if any??? 

I tried to find where I was reading this but no luck yet

Thanks Dan,

Ok,

How would you structure this from day one, you start with $0 and you build your way up to this over a period of 10 years
where would you start how would you structure this???

Ask more questions if you need too.

$10 million assetts

$5 million mortgages

$500k expenses

$750k turnover

$250k profit

But remember you start with $0 and you build the above each year, you could divide each of these figures into 10 and each year this will be the amount you add on upto 10 years

So first 12 months

$1 million

$50k mortgages

$50k expenses

$75k turnover 

$25k profit

In 24 months this figure will double and so on

So I am keen to see how each of you would structure this

Hi MY

Whether you use a discretionary trust set up or not depends on a lot of factors as you can see from some of the comments here. It really depends on your goals as well as your current position and age.  While you have a low income now that may not be forever. To a certain extent if you and your spouse are both on very high salaries a trust is of less value. If only one of you has a high salary and you have some young children (or plan on having them) then the income splitting can work well to justify the added expense.

A lot is said in these forums about asset protection. I have dealt with a lot of people who have lost everything over the years so I am  pretty cautious.  If you ever go into business for yourself or if this is an ambition of yours then you must set up some kind of asset protection. You need both legal and accounting advice on this but a discretionary trust is part of the likely answer. A small business owner whether operating as a sole trader, partnership or as a director of a company should avoid owning property that may be seized by creditors in the event of business failure. Even if you have the business in a company set up it is difficult for a $2 company to do business without a directors guarantee.

My experience is that not many suppliers or landlords will check the asset position of the director beforehand although the more savvy will check up so often your spouse will be required to give a guarantee too.  it is uncommon (but not unheard of) for beneficiaries or shareholders to give guarantees.

If none of this applies to you and the added costs of the company and trust, including loss of tax benefits outweighs the advantage then you might be better off in your own name. Noone here can tell you what is appropriate for your own circumstances.
I do think the accountant's comments about transfer at a later date to be somewhat naiive as stamp duty  and transfer costs (including a valuation) are likely to erode or even remove any gain/profit.

Good luck

R

Hi ArnieS

I agree with what you say except for your comment about the "very rich". The most vulnerable are not actually what I would term very rich.  The people I know who have gone bankrupt and/or  lost their homes etc have been owners of small to medium businesses who whether through their own fault or not have experienced a business failure.
Be aware that real estate is a very public investment and a quick search will tell someone what you own and make a judgment of whether you are worth suiing.

For a lot of people though who have good paying jobs and are PAYE taxpayers in non-contentious industries the asset protection aspect  is of minimal value.
MY's accountant may be genuinely trying to save them some money and doing  him or herself out of some fees in the process.

Also with your last comment -make sure your will has a testamentary discretionary trust in it-this is a by far the best way to income split and make sure your assets go to your kids and grandkids. It is not that complex but it is best if you go to a solicitor who specialises in wills and estates.   Has only one big disadvantage-you have to die for it to work.

cheers R