BronteParticipant@bronteJoin Date: 2007Post Count: 41
My life partner and I want to get serious about renovating for profit. He is a time-poor cash-rich PAYG wage earner. The idea is for him to fund the renovations and for myself to manage the renovations.
We are unsure what business structure would be best to minimise my partner’s tax liability.
Ideally, we would want to make it possible for me to eventually draw an income from the profits of the business. Other plans would include looking at leasing a vehicle for business use. We intend this to be my fulltime occupation.
All ideas on this welcome!
Bronte xLinarMember@linarJoin Date: 2004Post Count: 567
This is going to sound glib but you should speak to an accountant about this.
From what you have said a company sounds pretty good (easy to draw a wage) but is not cheap to set up and there will be ongoing costs like tax returns, PAYG etc.
Consider it a business, which is what it will be, and get good advice before you start out. If you tell the forum what state you are in, I expect you will get a few referrals to reputable accountants/financial advisers.
KTerrywParticipant@terrywJoin Date: 2001Post Count: 16,190
A company would be good as it allows limited liability which can protect the shareholders if things go wrong – the company is sued not the share holders. But a company is inflexxible as profits, or dividends, must be distributed in the percentage of ownership. Companies also do not get the 50% CGT discount.
A discretionary trust may be much better. Profits can be distributed at the discretion of the trustee each year, the 50% CGT exemption is available and there are many other benefits such as asset protection and estate planning issues.
You could have a
1) Discretionary trust with a company as trustee, or
2) a company with the shares owned by a discretionary trust.
Option 1 is probably better as you could get the 50% CGT discount.
If you are going to be getting a few properties, you may need a few structures, so best to seek the advice of a good accountant.BronteParticipant@bronteJoin Date: 2007Post Count: 41
Thank you both Linar and Terryw:
This is very useful information. This forum is great!
BTW we are in rural Victoria – but would travel for the services of a great accountant!
Bronte xJpcashflowParticipant@jpcashflowJoin Date: 2007Post Count: 575
Please contact me on 0404241188 or 9272-9201,
I will be able to povide you details of a good accountant thay may not require you to travel he is also located in a rural part
I will provide his details over the phone
Johann PsailacrashyParticipant@crashyJoin Date: 2003Post Count: 736
CGT is irrelevant if the reno’s are done as a business, profits are INCOME not capital gains.
How is finance obtained for a company, especially one with no history or assets?MortgagemanParticipant@mortgagemanJoin Date: 2004Post Count: 164
If you are not too far from Melbourne, I can recommend Guest's Accounting services who are our accountants and are fantastic. Their number is 95097033, ask for Morry Kalkopf.
Financing through new companies is fine if the directors are earning a wage as Brontes partner is, as this can still be used as income for servicing.
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044