Benifits of Trust Funds

From: See Change



Several members have proposed the use of Trust set ups as ways of "protecting" your assets, but as the "loan risk analysis " post points , as directors you are required to sign personal guarantees when borrowing money in relation to companies.

This has been my experience when ever I have signed any financial documents in relation to my companies.

Trusts can provide protection in some circumstances from litiganous third parties but is this their main benefit in "protecting" your assets.

Is a trust where you place you unencumbered properties ?


Happy investing see change
 
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Reply: 1
From: Nigel W


"unencumbered properties"!!!

Shame on you for being inefficient and wasting equity by not gearing to the hilt!!!

Make that money work HARDER!!!

ps. just kidding around. You've achieved a level of success that most forum members aspire to.

N.
 
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Reply: 1.1
From: See Change


Nigel , didn't say I had unencumbered properties , but some people here do.

Personally I think now is NOT the time to be leveraging to the hilt

see change
 
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Reply: 2
From: Dale Gatherum-Goss


Hi

As I posted some time ago now, Trusts have been around since the days of the Crusades as a way of protecting assets from attack.

This is their primary use now and will remain so in the future.

However, one of the main benefits of a Trust is their flexibility in the way that they can be used to reduce tax.

Just be careful of moving property to a trust as this will incur Capital Gains Tax and stamp duty.

Set up a Trust before you start and not after you've bought a couple of IP.

Good luck

Dale
 
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Reply: 2.1
From: Sergey Golovin


Or buy one or two IP now, it would be offset against your income, and keep them that way. And then buy more IP's later and hold them in the trust.

What about that scenario?


Serge.
 
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Reply: 2.1.1
From: Dale Gatherum-Goss


Hi

There is no "ONE RIGHT WAY' to this topic, as you know. If buying IP's in your own name is something that you are comfortable doing for the immediate tax advantages, then fine. If you wish to later use a trust fir further IP's, then fine again.

The most important thing is that you understand the rules of YOUR game and act on them accordingly.

Personally, I do not like the idea of a couple f IP's in your own name and later swapping to an investment vehicle.

Good luck

Dale
 
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Reply: 2.1.1.1
From: Anonymous


Agree with Dale on this one.

For numerous reasons it is better to own nothing in you own name. The stamp duty on transfer is and added incentive to set it correctly in the first place.

Begin with the end in mind.
 
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Reply: 2.1.1.1.1
From: Sergey Golovin


No no no...I'll clarify it.

Buy and hold 2 investment properties in your own name for as long as you can, regardless if they are + or - geared. Just simply hold them as any other person would with investment properties.
Claim whatever you claim - all deductions and the rest of it.
Put it simply play by the rules. This is first step.

Few years down on the truck set up Trust (as complex as you like).
Buy properties into that trust and keep them there while you are still keeping 2 initial properties on your name.

Once the Trust is up and running then and only then you can say, "What shall I do with my first 2 IP's"?

I'll say it again first two original properties and trust are two separate things and they not supposed to be mixed up in anyway down on the truck. They stay separate all the way. Why - because of all the charges associated with it (buy, sell, change ownership, etc.etc.)

Then you do have flexibility – sell first two once and keep the trust (and forget about 2 IP’s); or keep everything (2 properties and trust the way they are – it will you busy); or give trust away (to keep family happy) and stay with your original IP’s(to give a security when you are getting older).

May be it is not going to work, I do not know.
Well here you are 3 choices, lots of running around though.

Serge.
 
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Reply: 2.1.1.1.1.1
From: Dale Gatherum-Goss


Hi Serge

I understood your original post and apologise if I did not answer it as completely as I should. Thank you for re-stating your position for me though.

Your suggestions are possible, of course. However, I would prefer to see a well thought out and planned approach to creating wealth through property investments and this would usually involve starting with the end in mind.

Good luck with your ideas. There is nothing to say that you cannot do what you suggest if that is what you would like to do.

Me, I'm all or nothing!

Dale
 
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Benifits of Trust

Reply: 3.1
From: Glenn S


thx MG looks like an informative site.

Glenn
 
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