I am a accountant in the stair manufacture business, my boss told me that he is planning to buy a new building to start up a new business in NSW, roughly half million, and he asked me what s the best way to approach this in tax-wise, caseflow-wise. He wants to know all the reprecussions it would bring to his business, i dont know where to look for answer, can any one help me out here, i guess he just want to at least know something before he comes to his external accountant.
I know there is a lot missing in my post, as a matter of fact, even my boss dosent have answers to that new business, all he knows is he want to start a business solely focus on making stair components in the same area (NSW), and in terms of company structure, or any other money wise issues, he is open to advice and will choose the best advice to carry out the plan.
Cheers!1I would suggest that it would be best to own the property through a seperate company/trust. That way the property has some level of protection should the stair making company go belly up and creditors come chasing him.
Cheers,
LukeThank you for your advice, Luke, our company now is working through a trust, and i think it is a good idea if we establish another trust for this new business, and make the current company a beneficiary of the new trust just to share some loss at the first few years.
yyround, $0.5M doesn't buy a great deal of anything in most parts of Sydney – what sort of space (industrial, office or retail)?
Which part of NSW or are you looking at the major centres (Sydney, Penrith, Parramatta, Hurstville, Chatswood, North Sydney, Wollongong, Newcastle, Central Coast)?
Hi,
If the property is used in a business it may qualify for the small business Capital Gains Tax exemptions.
It's a good idea to put the property in a seperate trust, however, I recommend due diligence to confirm that can qualify for the exemption (if applicable).
Know the history of the building that you are planning to buy so that there will be no more hassles later on…
Yes, many things to consider:
1. Stamp duty now and later
2. tax – income, CGT, small business concessions
3. land tax
4. assset protection
5. flexibility
6. control
7. finance
8. death/incapacity
etc
in adddtion to trust structures consider a SMSF too.
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
You have to Know the history of the building that you are planning to buy so that there will be no more hassles later on…
kane9539 | Real Estate
http://thewatersal.com/
Email Me | Phone MeAs suggested by Terry, we have seen a lot of self employed business people using their SMSF as an investment vehicle to buy premises from which to operate their business.
The ability to do so is obviously dependent on the availability of capital yor boss holds within super but given the relatively low price he is looking to pay there may be capacity for this investment while maintaining sufficient diversification.
This strategy is definitely one that requires proper advice and structuring upfront!
Rhys Adams
http://www.redcommercial.com.au/
Email Me | Phone MeCommercial Property and Construction Finance Specialist
Good stuff! It’s really motivating to hear this. Love reading all the comments,thanks for sharing.
Adrian Cahill | AdrianCahill.com Personal Development Expert
http://adriancahill.com/from-investor-to-coach/
Email Me | Phone MeHere since 2002, however things have evolved over the years.
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