I know this has been asked before, many times, but never (that I have been able to find) quite with my situation. I have 1 IP TinC with my partner, and another 3 TinC with my brother. I have just found out that this may restrict our serviceability. We (brother and me) want to add further IPs (10 over next 10 years) to the portfolio, and were going to continue with 50/50, but that my not be the best way. Can someone confirm that for me?
Secondly, we think we need a structure to invest under, and are pretty confused; do we go smsf or trust? We want to tie in estate planning and retirement income stream under one roof if possible.
Thanks
Hi Richym,
There's not enough info for me to answer your first question.
Regarding your second question, the best structure really depends on your overall objectives that you'll need to answer first:
Eg. When do you want to access the funds – can you wait until your preservation age to access the funds again? How much do you already have in super (there are caps on how much you can contribute which can limit the scale of your investments)? How old are you (and therefore number of years until retirement?)
Remember that a SMSF is just a special type of trust. The difference is that SMSF's have a whole lot of tax concessions to encourage people to save and provide for their retirement however there are additional restrictions and compliance obligations. SMSF's (under current legislation) are fantastic for retirement income streams and also pretty handy for estate planning (but please note SMSF's and trusts don't automatically come under your estate and require particular attention in your estate planning).
Especially now that gearing in super is possible, SMSF's can enable some fantastic property investment strategies. If you are thinking about establishing your own SMSF, I recommend that you obtain professional advice to ensure everything is set up in a compliant manner.
Feel free to give me a call if you have further questions.
Nick Lloyd
Financial Planner
0413 033 423SMSFs are good, but may not work for well for what you are after. The equity in a property in a SMSF will not be accessible for further investing, this is probably the major draw back.
With a discretionary trust, there are some drawbacks, but it will make things so much more flexible than buying as tenants in common. Worth looking into.
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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