Be VERY careful who you listen to for advice on structuring/tax.

Hi Solomon,
Wow, from a Branch Manager that is pretty much unforgiveable !! One might expect such “advice” from an over-zealous new hire, but surely a Manager should have known better.

Thanks for sharing the story – for sure, it puts a red flag up for all. And I agree the large majority would have no idea that they were being misled.

Re similar bad advice, the worst that has happened to me was that an Accountant whom I trusted sold me on the idea of using a Hybrid Trust to purchase a property. That has turned out to be the biggest sink-hole for cash and I now wish I had simply bought in my own name.

There are supposed benefits with a Trust, but here are some of the unanticipated troubles associated with it :-
1. Land Tax (Qld) is 10x what it would have cost if held in person – $100+ per week today (instead of $10 per week).
2. Difficulty getting finance – not so many lenders would look at it when purchasing in Hybrid Trust (that may have changed now – purchase was in 2004). It didn’t start out that bad, but changes to laws have contributed to the massive difference I see now.
3. Extra Auditing/Accounting fees per annum to comply with stricter rules.
4. Rules seem to change from time to time, making the existing Trust “non-compliant” and requiring $$ spent to bring it right again.
5. Asic fees – $212 per year – but DON’T ever be late in paying THESE. It quickly doubles and more if an oversight has you not pay them on time.

Not something I will be repeating in a hurry, for sure….

Benny

Wow, if that is the advice the branch manager is giving, then I dare say he won’t be branch manager long.

Though I’m not surprised as bad advice like that is prevalent from both banking staff and/or brokers. Just need to weed the bad ones out when looking for a good one.

Good to hear you set them straight Solomon.

Cheers

Tom

When getting advice like this try to get it in writing so you can later use this as evidence for suing the bastards later.

Benny, you could make a claim against that accountant pretty easy..

CanberraClaire wrote:

I guess at the end of the day, they’re passing their opinion off as fact. Dangerous, yes. Outside their scope, certainly.
Couldn’t agree with you more about who to listen to, but so many accountants are narrowly trained that unless they’re heavily investing themselves, I wouldn’t go near them for structuring advice either!

I work with accountants that are property investors and I know more about structuring finance than they do yet legally limited on how deep the advice gets never mind the average bean counter who often gives the exact opposite advice that is required.

And when I say “run this past your accountant before proceeding” I cringe with tongue in cheek.

• This reply was modified 10 years, 4 months ago by  Colin Rice.

Colin Rice wrote:

<div class=”d4p-bbt-quote-title”>CanberraClaire wrote:</div>
I guess at the end of the day, they’re passing their opinion off as fact. Dangerous, yes. Outside their scope, certainly.
Couldn’t agree with you more about who to listen to, but so many accountants are narrowly trained that unless they’re heavily investing themselves, I wouldn’t go near them for structuring advice either!

I work with accountants that are property investors and I know more about structuring finance than they do yet legally limited on how deep the advice gets never mind the average bean counter who often gives the exact opposite advice that is required.

And when I say “run this past your accountant before proceeding” I cringe with tongue in cheek.

At least they can blame the accountant when things go wrong. however I think with most things are going wrong, but they don’t realise it and won’t realise it until they change accountants or get audited.
And went I say blame the accountant I mean the person signing the tax return is still reponsible but they may be able to sue the accountant (like Aussie John – suing tax lawyers) if they give wrong advice which results is the tax payer losing money

Very rare Colin.

its rare to be audited.