If you use the same company as trustee for many trusts, could this be an issue? For example, if a tenant sues one trust for whatever reason, could they go up through the company trustee & access assets in another trust?
For example, is it suitable to only use one company as trustee for 10 trusts or would there be asset protection issues?
I know this is an old post, but would love if anyone had feedback on this. Have recently discussed this with my accountant as i wanted to minimise ongoing accountancy fees. 1 trustee company, 2 separate trusts, with 2 separate properties.
There are mixed opinions – I have companies for EACH trust – that is a Discretionary Trust, plus trustees of each bare trust that hold SMSF assets, small price to pay for piece of mind in my opinion.
Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
http://redwoodadvisory.com.au
Email Me | Phone MeSMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS
Generally not a good idea for a few reasons:
1. Harder to prove which assets belong to which trust.
2. Lenders may take a PPSR charge over the company so going to different lenders could result in a breach of the mortgage agreement.
ASIC fees are only $243 or so per year so having a second company is not such a big cost. No tax return should be needed as the company is not trading.
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 Guys.
I remember him telling me last week that it would be cheaper to go down the single trustee’s path on the tax accounting side. We were just having a general convo… Hmmmm may need to clarify with him as the reg fee is nothing, it was the $1k in trust accounting i wanted to avoid if there was no risk or problems with it.
@terryw – i was hoping separate bank accounts, with separate mortgages registered to the different trusts (with different ABN’s) would suffice?
Not in a rush at the moment, but just lining up my info for the next purchases.
Since each trust needs a separate tax return it shouldn’t make much different in fees for the tax return. A company as trustee has no income or expenses of its own so would be a nil return – maybe no return needed at all.
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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