Hi all, some help/advice required and greatly appreciated.
My partner and I have one IP solely in my name and are looking to purchase a 2nd and possibly a 3rd in the next 6 months. We are looking at a regional area that we are familiar with which is very affordable and has high rental yield. The properties we are looking at are in the range of 200-240k. We have income of 108K (salary + rental income) and 125k (salary).
Queries I have are:
1: Is it going to be a worthwhile exercise starting a trust at this stage?
2: Is it harder/expensive to convert to a trust structure at a later stage?
3: If a trust distributes funds to trustees, do the trustees pay tax on this income and does the trust claim deductions on the IP?
4: Any recommended and reasonably priced property accountants in the north sydney area worth mentioning for us to get more advice from.
Thanks in advance
1. This will depend on a lot of factors.
2. Yes. expensive and time consuming and you will greatly weaken any asset protection.
3. Trustee probably shouldn't be beneficiaries – depending on the wording of the deed. Any distribution made is taxed in the hands of the recipients, including the trustees personally. If the income isn't distributed the trustees will pay tax on it at top marginal rates.
4. Why do you want a property accountant?
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
Sorry not a property accountant, but an accountant familiar or helpful with residential property investing.
And I'm still a bit confused then by the differences between trustee and beneficiaries. Could we not both be trustees and beneficiaries?
Thanks
cmoore0708 wrote:Sorry not a property accountant, but an accountant familiar or helpful with residential property investing.And I'm still a bit confused then by the differences between trustee and beneficiaries. Could we not both be trustees and beneficiaries?
Thanks
A lawyer may be more appropriate.
A trustee is a person (including company) that holds the assets for the beneficiaries.
You would be both trustee and beneficiary (but not sole beneficiary), but there could be stamp duty implications if your deed is worded a certain way.
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
Shukri is in Chatswood, he sets up trusts
PropertyGuts wrote:Shukri is in Chatswood, he sets up trustsWhat does he charge?
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
I would say he is
4.) recommended and reasonably priced
and nearby to CMoore
I would say he is
4.) recommended and reasonably priced
and nearby to CMoore
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