Has anybody, or does anybody purcahse properties under a company Name?
If so, when getting finance, is it as simple as borrowing against your current salary and then buying the house in the company name, or is there more to it??[
]Hi Alexander2,
Some people (two very savvy accountants) have explained to me that buying property in a company was the worst structure of all.
But for the life of me – I cannot remember the reasons[
]Derek
i guess its not good to have assets in the company name
assets in yours, trusts might be a better optionCompanies are bad because there is no CGT halving. If it’s a trading company that is very bad because trading companies are more likely to be sued than a ‘shelf’ company that just owns property.
Trusts are better, with a company as trustee.
To get a loan though a company, they ask for the directors guarantees if there are no assets or income from the company (and possibly even if there are), so yes, I guess it’s almost as simple as just providing your own details.
Cheers
MelGo to an accountant and get advice. For certain types of investments in property (eg boarding houses) a company could be a good structure because it provides limited liabilty (the company gets sued and not you as an individual). But there are CGT and other taxation issues to consider.
Hope this helps
TCTC, a trust structure would provide that same protection – especially if it had a company as trustee.
Cheers
MelI agree that you should not buy appreciating assets in a company name. But if you wish to, then the loan applicaiton is almost the same as getting the loan in your own name, except you will be guarranteeing the loan (or the directors of the company will). So the lender will want to know everything about you – assets and liabilities and income and expenses etc.
Terryw
Discover Home Loans
North Sydney
[email protected]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
Thanks guys[^] Lots of help, I’m seeing the accountant in the next week or so… will raise the same questions with him. We should always seek the right advice in correspondance to what we want to achieve.
Some of you mentioned the fact that you can’t halve the CGT, there are also many other tax and income advantages with a company based on the periods that you get taxed. Under a company name tax isn’t paid until the end of the financial period and so therefore can be offset against a loss. This can be quite effective when looking to raise your asset collumn while manipulating your tax benefits effectively.[:o)]I to have asked my Tax Consultant about the correct structure for purchasing properties. I will be seeking probably 4-5 opinions. At this stage most have suggested if you are buying straight residential property then do not purchase in a Company name – particularly if you are looking for Capital growth as opposed to positive returns. CGT is 100%. Advice has been to place in the lowest income earners name (usually the Mrs!) or trust i.e – ABC Pty Ltd as trustee for Smith family trust.
Any other thoughts? I’d like to hear them.yep, then the marriage breaks down and the mrs gets the lot, good move, you can come my way anytime.
sorry I am cynical.
Elves
Elves. I think the family law court would see it differently.
Terryw
Discover Home Loans
North Sydney
[email protected]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
Very interesting comments … you must talk to an experienced CA who SPECIALISES in company and trust structures … this is a specialised field which is covered in my home study program … regards Phil
LOL Terry, hmmn call me skeptical these days.
Saw one women go to court, for a divorce settlement, he came out the winner. He even wanted the ring back! Didnt get that.
I have seen court orders that have split record collections and books, naming each book that each person got. Bizzareeeee.
Lets see, a year ago I would have been looking at at least two court orders per week. these days I might see one a month, but they are very biased.
i guess when you are dealing with peoples emotions……nothing is ever simple. But I dont ever advise putting assets in one persons name, just my opinion mind….lets just say, I have seen this unravel, while trying to shoot one person in the foot, and to shift assets, got caught himself in the process.
While you can argue the point about asset allocation and tax implications, it comes a little hard down the track if you want your cake and eat it too.
cheers
Elves
Alex
I was asking a friend yesterday about why she had placed a business in their company name, there was a lot of paperwork involved as well. She said her accountant advised this.
I asked why her property development was also in the compnay name (talking 1.5 million development here) given that it is considered not a good thing….she again said her accoutant suggested this was the best structure for her.
I asked why they had not considered trusts- she said cost involved. (they already had a company set up- so maybe that was the reason)
Bit odd given she wants to split from her partner! She is getting deeper into debt.
Cheers
Elves
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