Discretionary family trust with corporate trustee structure

1. Directors usually. Depending on the lender possibly the shareholders, and possibly the adult names beneficiaries.

Take advice on putting your wife as a named beneficiary

2. Depends on the wording of the dead – usually.

3. Depends on the wording again, possibly not. Could possibly be a future formed company that does not exist now.

4. Around $3000 with legal advice to set up, depending on a few things. Running costs depend on what assets the trust has and complexity. Roughly, tax returns, ASIC fees of around $230 and the occasional piece of legal and tax advice

Hi Simon

Yes a named beneficiary.

Good in hindsight but that shows the importance of good advice.

Cheers

Yours in Finance

Only problem of course se7en it is so out of date it is not funny.

Cheers

Yours in Finance

Hi Richard 

It is out of date by 2 years (updated in 2011) I'm not sure how out of date this makes it in the world of trusts and accounting but I figure it will give me a good understanding of the fundamentals and from there I can at least talk to others about it and increase my knowledge and still be on the same wave length.

I plan on contacting my accountant re. setting up a trust possibly offshore to help me take full advantage of the tax free situation I find myself in now that I am working in Dubai for this I need to educate myself so I can ask the right questions.

Any advise on this, in terms of the things I need to be asking? or any clues about structures that can be used to help me in my situation. My goal is to buy property in AUS while living here in Dubai but if it works out better for me to look to tax free regions of the world to take advantage of my situation then perhaps I will do that, but again that will require a lot more education, whereas I already have a fairly good understanding of the AUS markets/processes.

Any advise would be great.

Cheers

You might want to contact a lawyers as well. Trusts are legal promises – a set of legal and equitable obligations. They should be set up by lawyers who are legally able to explain the roles of the parties to a trust and the legal implications and duties. A non lawyer cannot do this.

Also if you have overseas connections then you need specialist advice. Firstly you may be a non resident for tax purposes, or you may still be a resident despite living and working overseas (there is a recent case where an Aussie living in Dubai for approx 2 years was still deemed to be a resident here and therefore taxed here).

There are also implications if you are a resident and control a foreign trust and/or company. Complex stuff.

Expect to pay large sums for this complex advice too!!

Its almost certain that no 2 advisers would agree! This sort of stuff is not black and white. e.g. residency for tax purposes – there would be arguments that you are a resident and arguments that you are not a resident, one may be stronger than the other depending on the circumstances. Circumstances change too.

Don’t assume you are a non resident. Get some proper advice on this, as many people think they are one but end up being the other.
see this summary of recent cases
http://www.mondaq.com/australia/x/206608/Income+Tax/non+australian+resident+for+tax+purposes

Instead of seeing an accountant, why not a tax lawyer? It is tax law you are after advice on after all.

You are looking at around $500 upwards per hour for this sort of advice. Its not for the average accountant, but someone with good international tax knowledge.

Hi all,

There is some great info here which is really helpful, but I also have some questions that I am hoping you can assist with.

My situation: I now live in Norway with my wife and our 2yo son. I have an Australian salary until at least Dec 2014, but probably Dec 2015. My current gross salary is about $78K as I am on part time leave without pay (normally about $120K). I have about $80K in the bank, of which I am prepared to spend about $40K, keeping the either $40K as contingency. I have an investment property which I owe about $51K to NAB. I declined an offer on this place in March 2012 for $230K (kicking myself!).

I am looking to replace my Australian income with passive income from property. To do this I estimate I need approx 10-12 properties (minimum), based on a net positive cashflow of approx $10K per property. I am looking at acouple of high cashflow investments such as unit blocks and between 4-6 NRAS properties as the core of my portfolio. Once I have sufficient passive income, I would also seek to acquire acouple of properties in CBD of Sydney, Melbourne, Brisbane or Perth which may initially be negatively geared, but have a very good capital gains prospect.

I need a suitable finance structure to achieve this goal, and after reading 'From 0 to 130 Properties in 3.5 Years', I am hopeful a Trust structure may be suitable for me. My main issue is, before I go through the process of establishing a Trust, how can I be confident of getting suitable finance to acquire multiple properties (I estimate at least $4 million in finance is required for me to gain enough suitable properties)?

I would likely be sole director and beneficiary as my wife is Norwegian and doesn't have Australian residency or citizenship, or bank account (and we live in Norway). Is this an appropriate structure? Am I able to make small dispersals to my infant son if I establish an Australian bank account for him? (I have read comments about tax implications for distributing to minors).

I have spoken previously to my accountant who has advised I am, and can remain, an Australian resident for tax purposes.

Also, as I said, I have read 'From 0 to 130 Properties in 3.5 Years', which was a great help, and I have also read 'Value Investing in Property' by Gavin McPherson, and the way I understand it, Gavin is very critical of the Trust structure methods that Steve talks about as a method of quickly acquiring significant numbers of properties. Any thoughts?

Many thanks for your assistance and feedback

R.

HI all,

I also have read Steve’s book and have identified my first positively geared property for purchase. I need direction about establishing the correct trust structure to continue gobbling up positively geared properties, as is i can probably only afford to raise one deposit per year. I am Australian and live and work here, i asked my accountant about it but real estate is obviously not his forte although he did set up my SMSF. Please help or direct me to the most appropriate forum thread.