Hi to all,
I know many on the forum are or have been in the same boat as I am in now so I write this post asking for your help.
I am about to purchase a property in NZ (God willing). I have about 10 days to go unconditional on the property but would love to and it would be ideal for me to set it up under a Trust.
Here’s the problem – the expert accountant I am to meet in Melbourne is not available until the 19th May to explain them to me so I turn to all you experts to guide me on this matter.
I have been kinda convinced to go on with a Family Trust, but I’m not married and have no kids (yet) – does this matter – I assume not, but would a Family Trust still be best. Im a Melburnian wanting to purchase a property in NZ. Do I set up the Trust as an Australian Trust or a NZ Trust?
I would like to be the only Trustee of the Trust and the only beneficiary aswell – Is this dangerous – if so, what other safe options are there?
Terry suggested http://www.lawcentral.com.au but I would ultimaetly appreciate some expert advice from any expert on this site before filling out forms.
I think Hux001 has the same concept as what I would like to do – that is, set up a Trust without a company.
If you could provide any advice, help or reccommended person in Victoria I could meet with that could help me out asap, that would be greatly appreciated. If you know someone in Melbourne or you can help me out in person and meet with me, I’m willing to pay for your service.
Many thanks in advance and God Bless.
Kind Regards,
George.“If You never never ask, you’ll never never know”
Hi again Geo
You probably have to shop around to find an accountant who is savvy enough to fit your needs. I’ll PM you with my accountants details who is quite switched on but be warned, he is knocking back a lot of clients these days as he has more than he needs. Still worth a call..
Thanks heaps Barry – talk with you soon.
Kind Regards,
George.“If You never never ask, you’ll never never know”
Just a suggestion, for about NZ$300 you could form a Limited Liability Company to own the properties. This way you could transfer the shares into a trust at a later date thereby avoiding additional legal and title transfer costs.
The NZ shares could then be owned by an Australian Trust if you so choose.
Good Luck
JeffHi geo,
a trust is basically something that is there for the benefic of your beneficiaries, trustee being the entity that manage the investment for the trust. It can be an individual or a company where u control the majority of the shares.
Now the appointor is the one that hires or fires the trustee. Basically the Appointor is the Boss. Which i believe is the position u want to be in.
now Beneficiaries, there are 3 types.
B1 – you and ur immediate family members (mum, dad, bro, sis)
B2- is the immediate families of your B1
B3 – is your any trust setup or anybody that’s related by marriage or blood of your B2.
Now, if you have u as both the Trustee, the sole Beneficiary and also the Appointor, that creates a problem in terms of trust deed. If you have ur name on everything, then it defeats the purpose of the trust, as you would then own the property (theoretically speaking )
So i suggest u have ur mum/dad/bro or whoever to be in the beneficiary list too but that doesn’t means u have to give them any money or income. they’re there in name for u to help decrease ur tax that the trust would have to pay on any of ur incomes from the trust investment.
Anyway, i think that answers ur immediate questions. if you have more, please don’t hesitate to contact me [email protected]
I’m in Melbourne too.
Oh btw, the accountant, Dale gatherum Goss.. i think he might be the one you mentioned..
he’s good. I’m going to get him to set up my trust next year.
Good luck with ur NZ property purchase.
Cheers,
Kev
Thanks Kev, Jeff and Barry,
Ok I don’t mind having my family members as beneficiaries – if this would help, I don’t mind. So I will be the only Trustee of the Trust, the Appointor, but one of many Beneficiaries.
Ok – now the big question.
Do I set up the Trust as an Australian Trust or a NZ Trust? and Why?Also, anyone know how long it takes to set one up?
Many thanks to you all.
Kind regards,
George.“If You never never ask, you’ll never never know”
Dear Geo,
u can have urself as a trustee of course, but that doesn’t protect you if you get sued. I generally prefer to set up a company that i own majority shareholder that then manages the trust. It gives me extra protection and also it just allows the trust to pay the trustee sorta consultation fees i suppose which will be taxed at corporate rate of 30% and not the personal income bracket i’m in when i do start working next year.
Now back to your question,
I suppose for NZ, you could have ur Australian trust that owns the NZ trust, or if you think you’re going to stick to Nz market for a while before you get back into the Australian market, try having a NZ trust first. I think they work different being in differnt country ( as in taxation law and etc ) but generally the same principles applies.
An alternative is to look at what IBuyCashFlow post, to get a limited liability company in NZ and ur aussie trust owning the shares. Don’t know much about that but i suppose it’s worth a look at.
cheers
Kevin
oh, forgot to answer the question of how long it would take.. i’m not sure myself as i haven’t set up any trust yet.. waiting for next year when i’m a resident and hence would be considered as an australian trust and not a foreign trust if i were to set up one now. but generally i don’t think it will take that long, the accountant should be able to handle is provided that they’re not fully booked out.
Which accountant are you thinking of visiting Geo?
Kev
Hi Geo, you could just buy the property in NZ in your own name for the moment and then transfer to the trust or whatever later.
No stamp duty in NZ so not a big deal.
buys you a bit of time to wait for the right advice.My two cents- cheers. Mini
NZ Bird Dogs. SOLD OUT! More deals coming…
I totally agree with MiniMogul on that, that is another alternative too. No stamp duty, no problem transferring it over at a later date.
But if you’re certain you’re going to gather lots in a few months to yrs time, then i suppose no harm setting it up now and just add to it. saves you some time.
if you’re new to NZ, then getting a feel of purchasing it first might not be a bad idea too, before committing to a trust set up.
Perhaps u might want to weight it up before deciding on where to go. Either way it’s feasible for NZ
cheers,
kevThere’s no Such thing as No Can’t Do!!!!!
Thanks so much Kev and Mini for the advice – much appreciated.
Hey Kev, u said…
u can have urself as a trustee of course, but that doesn’t protect you if you get sued.I never knew this Kev, my understanding all along was that it was protection from being sued. Thanks for clearing that up – Looks like I have to set up a company now aswell for that extra security.
My understanding was that sure Im the Trustee of the Trust but I own nothing – The Trust does and the Trust cannot be sued only the Trustee can be sued (who is me) but as I said – I won nothing.
Hi Mini,
you could just buy the property in NZ in your own name for the moment and then transfer to the trust or whatever later.
No stamp duty in NZ so not a big deal.This is as long as I transfer it into a NZ Trust am I correct because my understanding is that although I purchase a NZ property, if I transfer it later to an Aussie Trust, I will pay Stamp duty but not so if I transfer it to a NZ Trust.
Thanks again for all your valuable advice and trouble to help out – Just goes to show how[saywhat] clueless I am.
Many thanks again to you both.
Kind regards,
George.“If You never never ask, you’ll never never know”
Hi All
I hope i am doing this right as it is my first post.
I am on my way to buying my first ip, and am thinking of buying it and others in NZ. After a lot of research into investment structures i was planning on setting up a trust for this and future investments here in Australia. But my accountant thinks i would be better off setting up a trust in NZ. The main reason being that he feels a NZ bank won”t be happy about lending to an oversaes trust.
If anyone has tried this and has advise to offer i would like to hear from you.
Also any info on potential problems i may face would be appreciated.Thanks Dave
Hi all,
just some things that I can’t relate to in regards to Trusts:
1. My family had a Pty Ltd as trustee for a Family Trust set-up in WA. This, I believe was a Tax effective set up, mainly and protective as secondary;
2. As Trustee you can be sued but NOT for the TRUSTS ASSETS;
3. All beneficiaries can have profits distributed to, BUT be advised (as our ACCOUNTANT SEEMED TO HAVE MISSED THIS POINT) it will be treated as income for the beneficiaries. So, if you have part of the profits distributed to, say mum ad she is receiving a Centrelink payment then her income taxable incom will go up. This has interesting consequences as you probably wont actually be giving her any $$. Now she will have a Centrelink Tax Debt and reduced payments! A trap we fell into.
4. “Now the appointor is the one that hires or fires the trustee. Basically the Appointor is the Boss. Which i believe is the position u want to be in.”In our case the organising Accountant (not the doofus we ended up with) was the appointor and, as far as I’m aware, that is where his power ended! I hope I’m right in what I’ve just put forth as it contradicts some of what has been said and I don’t want to add to the confusion as it seems that you are in a bit of a rush. Talking to any accountant should sort out the Trust issues, even if you go to a NZ Accountant via email.
CheersC@34
hi Geo,
well the reason i prefer to have a company as a trustee is because if that trustee(company) get sued, i can then as an appointor, Sack that trustee and put another one in place.
I suppose you could do that if you are the trustee, if u get sued, just sack urself and appoint a company or something. But then, i don’t like that idea because that means, i’m the trustee, beneficiary(one of them) and also the appointor. I don’t want to get into a headlock with ATO as that may create some legitimate issues with the trust setting, remembered i mentioned something about not having ur name in all 3 ? as it defeats the purpose of a trust vs individual buying?
yeah something like that. i think a company would be great ( personally ) as a trustee, which i own majority shares of course, so that gives me power to control the company as a director.
also, like i say, if i don’t have that many beneficiaries or have exhausted those low paying beneficiaries, i could then distribute income to the company ( trustee ) as some sort of consultation fees and use that to claim on company expenses, another extra savings of before tax dollars so to speak, second round after u’ve done the first round in ur trust allocations. have to ask the accountant on that, but hey if you can do that with trust, i believe u are able to do that with a company too but with limitations of course, but still before tax deductions no doubt. u know on company cars for the directors? director travel or entertainment allowances and as a director, u get directors fees too don’t u ? Plus u can add that in ur portfolio, Director of XYZ company
sounds impressive and all esp when u approach the bank for finance (theorectically speaking)Hope that helps
I’ve never done any trust before, so these are all what i’ve read and gathers in the past few months.. wil be setting up one soon
Can’t Wait !! heheKev
There’s no Such thing as No Can’t Do!!!!!
I suppose your whole problem is being concerned about being sued. If you don’t do anything wrong you won’t have that problem.
I have property in company structures, trusts and in my own personal name, mainly for tax reasons. This way I could never lose the lot but I may lose some if worse came to worse.
Cheers
Jeffthat’s trust ibuycashflow,
it’s mainly to reduce tax and asset protection, depending on what job you’re in, u may be in a higher risk group, i believe i would be when i start work next year, so a trust is definitely the go, not to mention the tax advantage
There’s no Such thing as No Can’t Do!!!!!
“Just goes to show how clueless I am.”
geo – !!! hahaha. me too. well, as i would say,
‘we were all born clueless, but haven’t we come a long way?’
joy to the world
calvin
i sure as heck hope you meant that your accountant who set up your trust was the settlor, and not the appointor.
The Appointor is all powerful! Check out
https://www.propertyinvesting.com/forum/topic/9986.html
Cheers
Mel
sounds impressive and all esp when u approach the bank for finance (theorectically speaking)
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