Starting a company

The only way to sell a property through a compnay is to sell the shares in the company. If you sell the shares for a profit then you would have to pay tax.

But you may be able to avoid paying stamp duty using this method.

Terryw
Discover Home Loans
Parramatta
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Yep,

Spoke with the accountant this afternoon. Going in tomorrow morning to sign all of the paperwork. That’ll be company # 4…the hardest thing is choosing a name that hasn’t been picked before.

It’s all good.

whatever!

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Hi Guys,

I thought that when you bought and then sold a property in a company that the company while being liable for 100% of the CGT would only pay 30% flat tax rate?

So for example if I purchased a property in a company structure (no trusts attached) and did some cosmetic renovations to that property and sold it within the 12 month period, and made a $30,000.00 capital gain then I thought the company would need to pay $10,000 tax on the property (i.e. 30%)?

Am I wrong?

Cheers
Krs

hi dazzling
for names its easy.
The street name of the project does it for me ie harrington waters(suburb) and (number of units 4 duplexs)( four) hence harringtonwater( four ) pty ltd
usually you find street and suburbs are not taken and they are easier if in a hurry and its easy to tell people the company name same as the address.
and sorry hb I must dissagree with regard to multi companies and trusts but each to there own if you have incorporated your structure for multi companies then it is a expense of doing business and there are alot of advantages by doing this.
1.doing all those ATO returns …..
all those asic annual returns…. not so its a yearly return and as they are for stand alone projects they are easy to account for, myob setup for each company.

2. But is it really worthwhile? yes as each structure can use its equity as it wishes and I control all.

3.Well firstly , the legal cost of setting up a company is about $1000. companies also must file an annual return with the Australian Securities and Insurance Commission at a cost of at least $200 per year.
plus, accounting costs are higher for a company than the other structures.
the companies cost around 1000,00 put as each is stand alone I don’t have any cross collat problems and lenders like new stand alone companies to lend to and this cost is incorporated in the setup cost of the project, so its factored in at the start and the return cost is also factored in as there is always accounting costs with any project,
I run my own accounting via myob latest version and it has no problem with it.
4.Secondly, if the company has the misfortune of going belly up, as a director you will be held personally liable. (but of course, this won’t happen)
I have set up my structure and I have answered dazzlings post to partner unwilling that I am the only person within my organisation that is liable and I use trust as a form of protection, my wife has no running in any of the companies and does not quarantee nor sign any infrastructure paperwork.
I use a investment end family trust which is where we all sit using company/trust structure from a liability position is one of the best structures I have found if you know of a better I would be interested in it as my structure has been setup to be very flexable.
5., capital gains….now that’s a sad story
Under the changes introduced in 1999, companies do not receive the general 50 % DISCOUNT.
This can mean when an individual on the top rate makes a capital gain they will pay about 24.5 per cent on the gain.
Where a company owns the same asset after the capital profit has been distributed to the shareholder, tax payable will be effectively 48.5 per cent.

only applicable if you sell, if you draw equity this is not applicable and if it was a requirement a unit trust/ company could be used and the trust would hold for the 12 months and then disribute to the unit holders, that could then be your trust structure this is not advice as you need your structure setup by a person who know what your structure should be, and I don’t like people copying structures as they are very expensive to change direction if it not what you required.
6.its not fair……
but i guess the basic reasons companies are formed, is to create employment and growth for the economy……

and employment/growth for the people and the owner of the structure don’t forget that as my structure grows it makes me a little happier and the people around me a little safer in there jobs.

not to be a tax avoidance vehicle
as these types of structure have been around for many years and and on most bank application forms and I think the new tax form has a section that asks is this a company/trust structure and another asks is a trust being used I can’t see how you could use it as a bottom of the harbour tax avoidance vehicle.
everyone has there own type of vehicle on this road to prosperity. what we need to understand is what they are and then decide which one we are going to drive and hop in for the ride.
I have mine and its fully fueled up and its currently going very well just make sure yours has a engine, mines a nice v8

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If you want to get involved in some of the projects I’m involved in email to [email protected]

Cato……correct
grossrealisation…..correct

Companies, trusts, SMSF are a great way of managing your wealth creation…..as long as you can control them.

The question asked was simple……
Does anyone know if it is possible to buy and sell investment properties through a limited company to avoid, or carry over to the next investment capital gains tax ?

There’s that word…..”AVOID”

After 30 years of trying to AVOID taxes, with 3 companies, a discretionary trust, a unit trust, and on top of that, a SMSF, I’ve come to the conclusion that all i was doing is shuffling the chairs around on the Titanic…..
and making my accountants and auditors very wealthy

but, each to his own

and giddo……correct

property into your SMSF is a great way to go…….

that way you and the tax office can manage your retire together ……

ahh….now whats that old say about taxes and death?

harry

Hi Mike

Yes I was a bit vague there. Of course, a company could just sell the property to another person or entity.[blush2]

Terryw
Discover Home Loans
Parramatta
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