Assets held in company - I'm worried.

Hi,

I own several properties in a company. There are two directors in that company, my brother and I.

I also own several properties in my own name as well as my wife's name separate to the company.

At the moment, I pay the Land Tax bills separately. One for the company and one as an individual. I am worried that the Tax Office will combine all of my assets together one day and I will be up for a massive Land Tax Bill which I won't be able to pay, be forced to sell and then throw all the hard work that I have worked towards out the window.

Can anybody please share their wisdom on this issue and how the ATO would treat this?

Many thanks.
 
I own several properties in a company. There are two directors in that company, my brother and I.
Well to be more exact the company owns the property and your brother and you own shares in that company.

At the moment, I pay the Land Tax bills separately. One for the company and one as an individual.
Again to be more exact, the company pays land tax on its properties and you pay land tax on the properties held in your name.

I am worried that the Tax Office will combine all of my assets together one day and I will be up for a massive Land Tax Bill which I won't be able to pay, be forced to sell and then throw all the hard work that I have worked towards out the window.
Can anybody please share their wisdom on this issue and how the ATO would treat this?
Well first of all it is NOT an ATO issue. Land Tax is a state-based tax - so it is the Office of State Revenue in what ever state/s you hold property in.

Secondly, companies have always been viewed as a separate "person" for tax and legal reasons. Whilst laws can be changed, I see no reason for them to be changed in this regard as that would overturn many hundreds of years of legal precedent.

Trusts are another matter altogether and laws have been evolving / changing / being redefined around trusts recently. I'm not so sure I'd be worrying about companies liability for land tax changing.
 
Different ballgame...

Ok, I don't know much about how companies and Trusts are setup and work, but I really didn't have much involvement when it was setup. Our Accountant was a poor communicator and I never really understood what he had done for the family. Have only myself to blame for not finding out properly.

Will try and get some more info into exactly what we have in place. Sorry for wasting everybody's time. :(
 
Every year you have to sign a company annual return. Get that out and see what the details are. Usually, you'd be directors and shareholders of the trustee company.

Why do people use different entities and don't think they need to know details? Who's the appointor of the trust? You do realise it is these details, who holds what post, who has the shares, who is the appointor, who are the beneficiaries, etc that determines who can legally do what with trust assets?
 
You need to be concerned. You are operating structures that you don't understand.

So with the properties owned by the trust with the trustee company - are you paying land tax as a trust or a company.

Has the trustee company notified the Victorian Office of State Revenue that it holds land as trustee for a trust.

If you are paying as a trust have you, if it were applicable, nominated a beneficiary of the discretionary trust. Are you sure it's a discretionary trust?

http://www.sro.vic.gov.au/SRO/srona...0441FA4-6F409978B796F7B7CA2575D60023D584?open

http://www.abacuscorporate.com.au/newsletters/Land_Tax_Info_Brocure.pdf

Worst case scenario, the trust has been paying land tax at the incorrect rate.

Best case - everything's sweet.

You need to take a copy of the trust deed and the land tax returns to a competent adviser instead of trusting things are OK
 
Top