Hi Shirley
I read this too. I don’t know why he would write that-puzzling.
Having a large capital gain in a trust would be the best place to have it. You can still distribute it to yourself if need be, but circumstances change yearly, so it may be best to keep your options open.
I think some financial planners and accountants just frown on mums and dads having trusts.
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
Shirley,
like Terryw I am a little puzzled by NW’s comment. For example, though I am not a tax accountant, I think that the distribution of the capital gains would not be taxable, as it is not ‘income’ but ‘return of capital’.
(See ‘Trust Magic’).
Also, why would it be a bad idea for the trust to pay off a HECS debt for the beneficiary, saving future interest costs?
TerryTerence McMahon
HomeWin
FinanceHi all,
I am just new to these forums.I am currently working as a tax consultant.My husband and I currently own 2 ips and our own home.
With trusts there are about 15 different types of trusts that can be set up for different circumstances.
All these trusts have pros and cons, but sometimes at setting these up they might have cons but further down the track they can lead to pros.It is best to get that advise from a accountant or solicitor.
Hi All
We recently set up a discretionary trust through my accountant with a corporate trustee, wife and I as directors.
I was feeling quite the professional until my wife’s accountant asked why we had done it. I explained about asset protection and flexibility to distribute income down the track etc. He was quite blunt and suggested we had wasted our money and created a bit of a mess. He basically believed we would have no real protection and that we would get about 3 years where we could distribute money to our children with any benefit.
Allowing for the possibility that he was a bit put out that my accountant set it up I must say it left me wondering whether we had done the right thing.
Why do we have separate accountants I hear you ask? Well I don’t like hers and she doesn’t like mine. A bit of a standoff.
Make sure it is absolutely the best structure for your situation before committing is my advice.Regards
SMTMHi There (Juan?) J Carlos,
This is a fairly standard recommendation, providing both asset protection and possible taxation advantages.
The cost of $2,000 is pretty standard, however it depends a little on your plans re your own real esate involvement. IE if you just plan on a few properties then maybe this is not for you, as the overhead is higher for fewer properties, also you won’t be able to negative gear.
If however your aim is for a substantial property holding then the Trust idea becomes almost essential.Hope this helps a little,
Best Regards,
RosePink
Originally posted by showmethemoney:
He basically believed we would have no real protection and that we would get about 3 years where we could distribute money to our children with any benefit.Hi SMTM
I’m intrigued by this comment. How does your wife’s accountant work that out (maybe you should both go find a new accountant – that you agree on[thumbsupanim]). Whilst ever you have kids who are over 18 and studying, or working for lowish income, you will have a benefit in being able to distribute to them. Also, if your kids have any kids etc. etc. To me, it also saves a whole heck of a lot of hassle in transferring assets on your demise, saves transfers with bank, possibly having to pay out loans etc. etc.
Cheers
MelHi Mel
Yes getting an accountant we both feel comfortable with is a problem which causes a lot of grief at times. Hoping for a resolution sooner rather than later.
My wife’s accountant was making the point that if the kids have been to uni and done any good then they will most likely be earning good income straight away and hence would not be any value in distributing money to them.
When he suggested that the asset protection was not what it was cracked up to be I sent a quick email to Dale GG about it. Without knowing all the facts his reply was that we should have set up with the “at risk” person as secretary of the trustee company and the “not at risk” person as director. Our setup is both of us as directors.
I do suspect that my wife’s accountant was a little put out that he didn’t get the business so perhaps that had something to do with his hostility.
Anyhow what’s done is done.Regards
SMTM
Hello Everyone,
I’m a newbie so forgive me if some of this doesn’t make sense. I’ve just visited my accountant and I’m a bit confused. I use my own company in order to do IT consulting (personal services income) and I asked about using the income coming in to invest in property. He said that I wouldn’t be allowed to do that because I would lose some benefits such as employer super contributions concessions and others I can’t remember at the moment. He also said that if I invest using my company, the 50% CGT concession also doesn’t apply. After showing me a few quick calculations, he said that i would be better off owning the properties in my own name.
I’m confused as I have this money coming in and I’m told I’m not really allowed to invest it.
Would some sort of trust be the way to go? I’m not that familiar with trusts so what would be the best way to educate myself about trusts before going to visit my accountant again? I’ve heard of Steve’s Wealth Guardian (which seems to be sold out) and Trust Magic. What resources do people recommend?
Thanks everyone!
Zedz
Trust Magic
Cheers,
Aceyducey
Zedz
You should not hold assets in your company for asset protection reasons (possibly could be sued due to work) and tax reasons (no CGT discount etc). You could probably set up a trust and use the income from your business to gift or distribute to the trust.
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 AceyDucey, Terryw.
That’s given me a few pointers in the right direction…..
Thanks![biggrin]
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