I guess I’m what some people would call a serial business owner/operator with my fair share of successes and failures.
Previous business have usually been high risk, capital intensive, involved staff levels of 30-60 and fairly stressful. Getting old now (40!) and looking to transition to a quieter existence (particularly less staff, o’heads etc.).
I’m interested in learning some property investment / development skills that I can use through my 40s, 50s 60s and onwards. I see myself being able to work from home and share the journey with my wife and spend some more time with the kids.
Anyway enough waffle, on to the meat of the post...
Currently I am a sole director and 90% shareholder in a Pty Ltd business in a totally unrelated industry that has large accumulated losses and a large loan outstanding to me. The business is in decline and I will probably run it down for the cash it produces over the next couple of years before closing the doors (of the activity not the structure).
I’m particularly interested in performing a/some project(s) based around buying subdivisible property /reno’ing old house to improve yield / renting / subdividing /selling both properties.
My questions are ...
i) If I perform these activities as a business within the above Pty Ltd structure would properties acquired be treated as trading stock, so upon successful sale any profits would be treated as exactly that – trading profits, not capital gains and therefore subject to company income tax ( and therefore can be offset against prior years losses)rather than CGT? And that no CGT would be incurred?
ii) What are the GST implications of the purchase of the property and subsequent sale of the two properties?
Looking for general advice at this stage to see if the above activities suit my situation. Will of course seek more detailed personalised advice should things progress further.
Sorry for long post - hope you're not all asleep by this point. Many thanks in advance for any pointers.
pierso
Previous business have usually been high risk, capital intensive, involved staff levels of 30-60 and fairly stressful. Getting old now (40!) and looking to transition to a quieter existence (particularly less staff, o’heads etc.).
I’m interested in learning some property investment / development skills that I can use through my 40s, 50s 60s and onwards. I see myself being able to work from home and share the journey with my wife and spend some more time with the kids.
Anyway enough waffle, on to the meat of the post...
Currently I am a sole director and 90% shareholder in a Pty Ltd business in a totally unrelated industry that has large accumulated losses and a large loan outstanding to me. The business is in decline and I will probably run it down for the cash it produces over the next couple of years before closing the doors (of the activity not the structure).
I’m particularly interested in performing a/some project(s) based around buying subdivisible property /reno’ing old house to improve yield / renting / subdividing /selling both properties.
My questions are ...
i) If I perform these activities as a business within the above Pty Ltd structure would properties acquired be treated as trading stock, so upon successful sale any profits would be treated as exactly that – trading profits, not capital gains and therefore subject to company income tax ( and therefore can be offset against prior years losses)rather than CGT? And that no CGT would be incurred?
ii) What are the GST implications of the purchase of the property and subsequent sale of the two properties?
Looking for general advice at this stage to see if the above activities suit my situation. Will of course seek more detailed personalised advice should things progress further.
Sorry for long post - hope you're not all asleep by this point. Many thanks in advance for any pointers.
pierso