All Topics / Finance / Setup trust account straight away?

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  • Profile photo of lefthander07lefthander07
    Member
    @lefthander07
    Join Date: 2008
    Post Count: 5

    Hi,

    My wife n I have just bought a house as PPOR. We are getting ready for our 1st IP committment and would like to find out if we should be setting up a trust account. We are based on single income at the moment.

    Should we, preferably set up a trust account from the beginning or somethg we could think about when we have more properties down the line? Is there some simple strategies to start with given our circumstances? We would also like to know what are some of the considerations we should be aware of, if possible.

    Any advice appreciated.

    Much thks!
    NKOTB.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    I think i would be holding off forming a Trust until you are a bit closer to deciding on the type of investment property you intend to buy so that you can ensure that you dont double on structures.

    No point in setting up a Discretionary Family Trust if you need to claim the negative geared tax deductions from your IP.
    Alternatively if the property is to be wrapped and will be cash flow positive then a Unit Trust or HDT will not give you the flexibility you are probably after.

    Make sure your mortgage broker structures the loan correctly to ensure that when you are ready to leap you have everything in place ready to go.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    I agree that it is probably not a good idea to set one up until you know what you will be doing – You will need to lodge tax returns and ASIC fees (if company trustee) etc so it could be costly. Just start doing the research now and get ready.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Finance GuruFinance Guru
    Member
    @finance-guru
    Join Date: 2008
    Post Count: 9

    Hey Lefthander07,
    I'd suggest getting some advice from an accountant or a financial planner regarding the trusts. There are a lot of differences between types of trusts, and so the right trust for you will vary depending on your situation, and even your state.
    As a mortgage broker, I can tell you how to arrange your loan with a trust, but not what trust is best for you.
    You can set up your trust whenever you like, as long as it is all completely set up before you exchange on your IP purchase, but as Terry mentioned,  depending on the trust, there may be some ongoing management costs etc to be aware of

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Janelle

    Hate to disagree with you but this is certainly not the case in Qld

    You can set up your trust whenever you like, as long as it is all completely set up before you exchange on your IP

    The Trust needs to be dated prior to entering into a purchase Contract otherwise double stamp duty will apply.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

    Profile photo of Finance GuruFinance Guru
    Member
    @finance-guru
    Join Date: 2008
    Post Count: 9

    I'm sorry Richard, I didn't make myself clear…
    when I said..
    You can set up your trust whenever you like, as long as it is all completely set up before you exchange on your IP

    I did mean that the trust must be completely set up, signed, dated and (when not in QLD) stamped before the date you exchange on your IP. In QLD you can be forced to pay double stamp duty. In other states it  will mean that the the property cannot be put in the trust at all.  
     

Viewing 6 posts - 1 through 6 (of 6 total)

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