- Bradles CParticipant@bradles-cJoin Date: 2004Post Count: 52
I am starting a property investing partnership with my friend.
I have developed a joint venture agreement just in case things go ‘pear shaped’.
Apparently a non-trading company or ‘trust’ is the best way to go when entering a partnership ?
What type of trust should I set up, how do I do this and what are the benefits ? Also, what fees are involved ?
Any advice would be much appreciated !
BradMark UnwinParticipant@markunwinJoin Date: 2005Post Count: 35
A company may not be the best option for you. Whilst this is simple for a joint venture and income tax is capped at 30%, you will not benefit from the 50% exemption on any capital gains you make.
A trust could also pose a problem if your trust incurrs losses (family trust election rules meaning future income can only be distributed to one family group).
Options to consider would be a partnership of trusts (you would both need to setup your own family trusts) or a unit trust.
Williams Partners Pty Ltd
http://www.wp.com.auTyMember@tyJoin Date: 2005Post Count: 18
I AM VERY INTERESTED IN WHAT YOU GUYS ARE TALKING ABOUT AS I AM ABOUT TO START INVESTING WITH MY BROTHER, TROUBLE IS I DIDN’T UNDERSTAND ANYTHING THAT YOU HAVE MENTIONED HERE IF YOU COULD EXPLAIN IT A BIT FOR ME IT WOULD BE GREATLY APPRECIATED. WE HAVE ONLY DECIDED TO GO PARTNERS OVER A FEW BEERS AT XMAS SO I HAVEN’T LOOKED INTO IT THAT MUCH AT THE MOMENT. ALSO I REALISE THAT WE WILL NEED A CONTRACT FOR THE PARTNERSHIP, OTHER THAN A BREAKOUT CLAUSE (ie IF WE GET DRUNK AND BEAT THE PISS OUT OF EACH OTHER AND NEVER TALK AGAIN WHAT HAPPENS WITH THE PROPERTIES) WHAT OTHER STUFF WOULD WE NEED IN THE CONTRACT? AND DOES IT NEED TO GET CERTIFIED BY A SOMEONE?
ANY FEED BACK IS GREATLY APPRECIATED
(SORRY ABOUT THE CAPS, DIDN’T REALISE IT WAS ON)[blush2]Mark UnwinParticipant@markunwinJoin Date: 2005Post Count: 35
Brotherly love, you are bringing tears to my eyes!
A structure you could use with your brother is a family trust. As you are related, you are both eligible to receive profit distributions without any tax issues arising (i.e. family trust elections as I mentioned before).
You should document your agreement as to how you are investing and your % share.
You could prepare one informally or if you are concerned, a lawyer could draw one up fairly cheaply.
The contract doesn’t need to be certified, just signed by you both.
Williams Partners Pty Ltd
http://www.wp.com.auPropertyGuruParticipant@propertyguruJoin Date: 2003Post Count: 1,502