Hi
i have just purchased my first house with is my PPOR and im looking at getting an other if not 2 more properties as investments. i would like to buy them into a trust along with transfuring my PPOR into the trust. i am keen to get a trust mainly for asset protection. I would like to know a few things would appreciate any help
1) whats the best type of trust for me?
2) whats involved in buying my existing house into my trust?
3)when buying new houses into a trust whats involed in getting finance?
4)do i need a PTY LTD? and if so do i have to buy the house as a business loan?
5)whats involved in maintaining a trust through out the year?cheers jake
jake … plenty of answers to your questions… just do a simple search
cheers
For asset protection the best trust is a discretionary trust.
But you will need some proper advice – eg. transferring your home into a trust will result in :
– less asset protection
– Stamp duty
– Loss of the main residence CGT exemption
– potential tax issues if you live in it
– potential legal issues if you live in it
– possibly, or probably more land taxWhen a trust is involved finance is just about the same as per normal. But when a company is involved things can get harder and/or more restrictive. Having a company will provide added asset protection – as a trustee's personal assets are at risk if they are sued, and it will make things more flexible in the future – but finance will be harder.
Trusts don't require much maintenance. You will need separate bank accounts and to treat them and their income and expenses as separate to yourself. Will also need to get an ABN, TFN and file tax returns, for the trust and company – and pay ASIC fees for a company.
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
Hi,
I have similar questions. Trust or Company Title
We want to develop a property into a duplex and we need a savvy accountant with experience in property development matters for small time investors.
Any recommendations. We are in the eastern suburbs of Sydney
Thanks
Ella
Looking at starting a trust to purchase my next investment propety. As an individual with no dependents and only one property under my belt at present, what would be the best type of trust and how much do they usually cost to start?
Thanks alot
GrantThere would only be one type of trust that you would consider – discretionary. This provides greatest asset protection and tax effectiveness. Costs $100 to $10,000 to set up.
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
Hi Terryw, you seem to know a fair bit about trusts but in considering Mcgunga's situation I don't think a discretionary trust may be suitable as all the losses from any negative gearing are contained within the trust and he would therefore gain no tax advantage for this on his borrowings.
I have trusts also but they are HBT's and yes they are a problem at present. I believe in trusts therefore, but I feel that they are better suited to people who are well into their property portfolio. 3 plus properties. I say this as many people do not even accumulate this many and due to the cost of land tax, additional tax returns and asic fees you really need to have a few properties under your belt before you actually justify the cost. This depends obviously on what state you are in and the land tax in that state. We purchased several properties before considering trusts and our equity started to grow and we therefore felt the extra cost and protection were justified.
McGunga,
trustee is right in what he says, if your property is negatively geared and owned by the trust then you give up any ability to offset the losses against your personal income. However what you have to weigh up is that eventually this property will be positively geared and if you then decide to transfer it into the trust you will have to pay CGT and stamp duty. It might be worth taking that initial hit rather than being up for the fees down the track, like I said you will need to do the sums on which scenario will suit your situation best, probably something you need to speak to your accountant about.
Shane
Yes, there are many disadvantages of discretionary trusts owning real property, especially in NSW, and in the early stages.
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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