G'day all,
A mate and I have read the books, listened to the CD's and watched the video clips, etc, etc, etc
and intend joining forces in an endeavour combine finances and chase the dream of financial independence. However we have received conflicting advice, from the accountants and lawyers, regarding how to set ourselves up for tax, capital gains, etc, whilst individually protecting what personal assets our two families possess.
As such I thought I'd throw it out into the Forum to hopefully tap into the wide range of personal experience out there…
Our initial plan is to buy, subdivide / build and on-sell residential property and our thought was to form a Unit Trust, which would front our two individual discretionary family trusts. Problem is I now believe a Unit Trust will mean we are always to be treated as 'Commercial' and capital gains benefits will not be able to be passed on to the members of our family trusts.
Is anybody out there who may be able to advise on the best way to set ourselves up?
Thanks for your time and I hope you have a great day.
With trusts the income retains its character so any CGs could flow through to indivudual beneficiaries of a discretionary trust. This is different to a company for example a capital gain would still be a capital gain but when it gets distributed it will change form to that of a divdend. So if you had a shareholder with a capital loss (from a previous venture) then the dividend couldn't offset the loss. With a trust it could.
But, if your intention is to construct and sell then CGT wouldn't apply it would be pure income tax.
Incidently, there is no right answer on how to set up. It is more an art than a science and will depend on many many different factors.
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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