Hi,
I am new to the world of property investing. Looking at buying my first investment property and was wondering whether to do so in my own name or whether I should set up a company and purchase in the company’s name?
Can anyone offer some advice re. what the options are?
Cheers
Shaunit is not a good idead to buy in a company name. Go for your own name or a trust. Companies do not get the 50% CGT reduction and your shares are at risk if you are ever sued.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | 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 Terry. Where can I get additional info re. the setting up a Trust? And what are the advantages of a trust vs buying in your own name?
Do a search on this site. There is heaps of info – everything you need to know!
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | 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
The short answer is it depends on a couple of things. Is the property positive/negatively geared?, and what would you be looking to achieve by using a trust? – asset protection?
If you but a property in your own name – you can offset any losses against tax you pay from your regular income sources – usually a job. If it was in a trust – the trust carries the loss, and not claimed directly against your taxable income.
If you are in the highest income tax bracket, and you investment is positively geared, you may want to put in in the name of a partner/spouse who may be on a lower income.To decide whether it be put in a trust, or other legal entity – you would normally be concerned with asset protection in the event of bankruptcy or being sued – ie in your own business.
If – like most investors – you hold a tax paying job, most will just buy in their own names.
In any case – always get independant advice.Trust it helps.
ScorpioOriginally posted by scorpio:If you but a property in your own name – you can offset any losses against tax you pay from your regular income sources – usually a job. If it was in a trust – the trust carries the loss, and not claimed directly against your taxable income.
A hybrid discretionary trust can be used for negative gearing property so that an individual can offset the interest losses against other personal income.
It also gives the benefit of being able to distribute capital gain to different beneficiaries (ie. those on lower incomes).
And there are trust loss provisions that don’t allow trust losses to be carried forward unless a family trust election is made – which then has an impact on who can receive distributions at lower tax rates.
GP
Thanks for the advice guys, much appreciated.
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