Hi,
I have recently established a company but am still working in full time employment. I am looking at purchasing a small factory and am not sure if to purchase as an investment under my name or through the business. The business will not be turning over a lot of money in the first 12 months – approx 20k.
What would be my best option here
1. Purchase under my name and lease to the business
2. Purchase through the business and claim the GST and any tax incentives offered – taking into account the business won't be turning over a great amount
3. Will banks even lend to the company that hasnt been trading for long and doesn't plan to trade a great deal but use my full time employment to fund the loan.
Any advise much appreciated
Thanks
The unwritten rule in business is never buy a property – or other assets – in a trading company.
What would happen if your company would go bankrupt? your property would go with it.
A far better way would be to set up a discretionary trust. This is much safer than using your own name. You should also talk to an accountant about setting it up cause there are various rules to meet to get the small business CGT discounts etc.
ANother option is to use a SMSF to own the property.
3. yep. banks will lend to a 1 day old company or trust, taking into account your other income.
Terryw | 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 Terryw,
My accountant set up a Family Trust for me when establishing the company – I should have explained that my wife is also working in full time employment – Is it advisable to purchase through the family trust or place in my wifes name who plans to stay in full time employment. for the next 5 years.
Damoli
Look at using the trust – assuming it is not involved with the business.
Terryw | 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
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