Forums / Property Investing / Help Needed! / Purchasing property – Trusts – Discretionary vs Hybrid vs Own name

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  • Profile photo of Jacqui MiddletonJacqui Middleton
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    Yes that is sort of what I'm thinking Terry (not about the shares!).  I'm thinking absolutely PPOR in own name, and probably up to the landtax-free-threshold in own name as well.  Over and above that, perhaps the trust.  And in addition to that, the SMSF…

    Jacqui Middleton | Middleton Buyers Advocates
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    Profile photo of Jacqui MiddletonJacqui Middleton
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    I'm in the process of reading some publications by Michael Yardney, who is a huge advocator of trusts.  I'd be really interested in his thoughts on the matter if he's about (ie the logic in my comment in my previous post).

    Jacqui Middleton | Middleton Buyers Advocates
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    Profile photo of Charles 1Charles 1
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    JacM wrote:
    I think a question a lot of people have in their minds is: should I buy every property in a trust…. even if I end up with say, only 3 properties?  Or should the first couple be in own name and then go into the world of trusts if planning to go larger?

    Interesting article here as to why you may want to use a trust:

    http://propertyupdate.com.au/articles/protecting-assets.html

    Profile photo of TerrywTerryw
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    Charles 1 wrote:
    JacM wrote:
    I think a question a lot of people have in their minds is: should I buy every property in a trust…. even if I end up with say, only 3 properties?  Or should the first couple be in own name and then go into the world of trusts if planning to go larger?

    Interesting article here as to why you may want to use a trust: http://propertyupdate.com.au/articles/protecting-assets.html

    That article reads more like an advertisement.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
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    Profile photo of Jacqui MiddletonJacqui Middleton
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    Advertisement or otherwise, this is the solution. I think these accountants are about to become my brand new best friends.  Love it love it love it.

    Jacqui Middleton | Middleton Buyers Advocates
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of TerrywTerryw
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    just do your research first

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
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    Profile photo of Jacqui MiddletonJacqui Middleton
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    will do. thanks Terry

    Jacqui Middleton | Middleton Buyers Advocates
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    Profile photo of IntrigueIntrigue
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    I have recently read their book and too was very intrigued by the PIT (property investor trust) and the way in which they use it.
    I have since spoken with a few people who have advised me to be rather weary, there are also some threads on here that suggest to be careful. The concern seems to relate to the ATO's view of hybrid trusts.

    I would be interested to see what you find and what you decide to do JacM

    Profile photo of Matt_ArnoldMatt_Arnold
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    Michael Yardney promotes these guys fairly heavily…

    Profile photo of TerrywTerryw
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    The ATO isn't really concerned about hybrid trusts – just the uncommercial use of them.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
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    Profile photo of hornbillhornbill
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    Terryw wrote:
    Ideally I would suggest buying at least one property in personal names as you get the CGT exemption – which will be huge as values increase over time. But this one I would suggest should be in the name of the spouse with the lower risk so as to increase asset protection.

    There after, ideally, in a trust, but again it would depend on the numbers. I just worked out buying the first IP in a trust in NSW may cost an extra $5,600 pa just in land tax. This and the inability to save personal tax on negative gearing could cost you an extra $10,000 pa in the early years. This is a huge amount.

    But after you buy a few in your own name you will be paying land tax on future properties (once you have used up the threshold) and as rents rise you will not have a loss – from then on it is smooth sailing, unless the government changes the rules again.

    Maybe it is easier just to invest in shares – no land tax, stamp duty or negative gearing issues (usually).

    Hi Terry,

    I’m currently considering changing my current PPOR ownership from joint names to a single name (my name) as my wife and I intend to convert it into an IP. My wife is not working. My mortgage broker said in VIC this can be done within few weeks for only few hundred dollars? Hopefully with this setup, I can then claim 100% negative gearing components against the IP from my employment income?

    We then intend to purchase our new PPOR, but I’m still pondering as to whether to use both names or single name? If single name, would it be much wiser (as you suggested above) to use my wife’s name instead to lower the risk, as none of the expenses are tax deductible anyway?

    Look forward to hear your comments.

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