Have you asked your accountant if he has any ideas, or maybe another accountant in his firm that might suit your expectations better? I would think that having two accountants would not make sense as one would be advising on one set of circumstances whilst not knowing your complete picture, so you can’t expect to get the best out of them. Maybe…[Read more]

Hi Chris,

That would be nice, but unfortunately the tax deductibility of interest is based on what the funds are used for, and in this case you are still using the actual funds for something private.

Another angle, though is that if you used a HDT you can effectively borrow funds through the trust to redeem your units and so claim a tax…[Read more]

ASB Alpine,

Super fund tax is a flat 15%.

Before you go putting the property into your smsf be aware of limitations to transactions between a smsf and related parties, ie yourself. Also, do you own the share of the property in your personal names or through a unit trust? You may already be going against the in-house asset rules?

Once the…[Read more]

Andrew,

The hybrid trust structure is ideal for your situation, gives you the flexibility to gain maximum tax advantage of negative gearing now, and minimum tax liability of capital gains later.

Expect between $800 & $1,500 for the trust plus up to $1,500 for a corporate trustee.

ross@myobmechanic.com
http://www.myobmechanic.com

The ATO previously reduced the cost base by 2.5% per year whether or not you claimed it, if it was applicable. But they have recently come to sense and if you haven’t claimed it due to not having sufficient information to base a claim then it won’t reduce your cost base. If you haven’t claimed it, but are eligible to then I would suggest that…[Read more]

A very general rule is that the profit should pay back goodwill within 3 years, It sounds OK but what is the $84 k profit made up of, why are they selling, is the profit sustainable, etc

You are best to see an accountant for advice, they shouldn’t charge more than a couple of hundred for a basic valuation

ross@myobmechanic.com

As an accountant who is presently establishing my own sole practice I must say that the posts are encouraging for me, in that I can’t believe how shallow some firms are, so I find it really easy to provide outstanding service at reasonable prices. This is one of the main reasons that I decided to go out on my own, clients are getting charged at…[Read more]

Unfortunately you can’t claim a tax deduction as at the time you don’t have a source of income aginst that deduction, but forget about the tax deduction, think about the additional profits that you’ll be making that you wouldn’t have without the books or coaching.

It’s a small cost to gain a much larger benefit, once you’ve learnt the investment…[Read more]

Hi RL,

I agree with John’s comments and advice except that I would recommend a trust if you are serious about building and protecting your property portfolio. As an accountant you may think that I am just trying to sell a structure, but once you see the benefits it is a no brainer in most cases. But as with most things, your personal…[Read more]

Depending on your marginal tax rate as to the benefit to you, but generally a well structured salary package will be to your benefit, although not spectacular, especially with the lower tax rates now.

I am an accountant and tax agent. D1-D5 are only for work related (ie employee related) expenses. The books should go as an expense in the rental schedule, which is then apportioned between the owners. Whether or not you apportion the books between the properties doesn’t matter as the end result is the same. Usually a property is owned 50-50…[Read more]

Whoever is on the highest marginal tax rate should salary package the interest and any other rental property expenses, as they will get the best benefit, then just the income is split. Otherwise the only benefit is to reduce your tax withheld from your pay.

Another salary packagin tip. Package a laptop, and use it 100% for managing the renatl…[Read more]

Michelle,

To start off, a simple company/trust structure would be sufficient. Then when you are more comfortable with the operation etc, and wanting to buy more properties, then you can look at additional trusts. There is no real tax benefit of having multiple trusts, it’s more of an asset protection issue, diversifying risk. But as with…[Read more]