Hello everyone, just chasing some advice on structuring of an investment portfolio. I have spoken to several accountants and brokers in regards to the best way to structure portfolios in terms of asset protection and maximum borrowing capacity and all answers received have been that my best option is to invest in my personal name.
From my research and reading Steve’s books I believe this to be the wrong advice and was wondering if anyone could comment this or possibly point me in the direction of a good accountant and/or broker that specialise in property.
Thanks in advance
Hi Kade,
What advice have you been given?
You could try my accountant, Mark Unwin (MJ Unwin & Associates) to see if he can help.
Just know things could change depending on who is elected and what policies they get through.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
best to see a lawyer if you want to consider asset protection as this is legal advice after all. You can achieve asset protection while retaining legal ownership of assets, but how you set it all up will depend on what you are trying to protect yourself against.
Maximising borrowing capacity is credit advice so you should see a broker about this.
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 Steve,
Thanks for the reply mate. I have been advised that the best option would be to invest in my personal name as it is easier to borrow and trusts do not necessarily have any tax benefits.
Thank you for the recommendation I will get in touch with Mark.
Regards,
Kade
From my research and reading Steve’s books I believe this to be the wrong advice and was wondering if anyone could comment this or possibly point me in the direction of a good accountant and/or broker that specialise in property.
Hi there
What benefits do you believe you’ll obtain by investing via a different entity?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I have been advised that the best option would be to invest in my personal name as it is easier to borrow and trusts do not necessarily have any tax benefits.
An accounting structure summarises the way you own and control your wealth. The two options, from a high level, are: in your own name, in another entity (that you control).
The right structure is one that allows you to minimise your tax, maximise your asset protection, within the budget you have available to set it up and run it, and appropriate for your wealth creation plans.
As you can imagine, that last paragraph permits a variety of scenarios to all be both right and wrong, depending on the individual.
Owning real estate in your own name is definitely the cheapest option as far as set up and ongoing costs, but it comes with the lowest tax minimisation and asset protection options, and it also makes it very hard to scale. That said, if you want to negatively gear, then it is the best option available so you can offset the property net rental loss against your salary income (and with the Libs now returned there is no risk of this changing in the next few years).
Hope this has helped.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Thanks again for the advice Steve. No I’m not looking to negatively gear so I definitely think the best option for me is to structure my portfolio within trusts. Has been difficult to find the right advice when there are so many conflicting opinions from ‘professionals’ even after reading your structuring and finance chapters in depth a few times.
Thanks for the advice again, really appreciate it.
Hey Jamie, sorry mate I may have worded this post wrong. I meant to say that I believe the advice I was receiving from accountants and brokers was wrong not from Steve. Their advice was to invest in my personal name not a trust, as it is easier to obtain finance and the tax benefits are just as beneficial and borrowing capacity would be greater.
Regards,
Kade
Accountants can only advise on the commonwealth tax aspects of trusts. You will need a lawyer for proper advice as Trusts are complex legal arrangements between beneficiaries and the trustee involving obligations over property. Trusts are not separate legal entities for example.
Borrowing capacity would be potentially more with a trust (could be less too!)
see https://www.propertyinvesting.com/topic/5031860-trust-strategies-to-increase-borrowing-capacity/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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