How do you start a business/company?
- Thread starter mmmggg
- Start date
Cons:
1. Stamp duty as you need to sell to company
2. no asset protection advantage
3. increased overhead costs (registration, accounting)
4. Loss of tax advantages
Pros:
1. can't really think of any....
Perhaps you are wanting to move them into a discretionary family trust (DFT) with corporate trustee? That is a different matter.....
Cheers,
The Y-man
1. Stamp duty as you need to sell to company
2. no asset protection advantage
3. increased overhead costs (registration, accounting)
4. Loss of tax advantages
Pros:
1. can't really think of any....
Perhaps you are wanting to move them into a discretionary family trust (DFT) with corporate trustee? That is a different matter.....
Cheers,
The Y-man
First off, why do you want to change your structure?
If you are self employed or at risk from being sued, you may want to look at holding them in a Trust to add a layer of asset protection. If your properties are negatively geared you'll rack up your tax losses to use when you are CF +ve or will need to have some form of income coming into the entity to offset the losses.
We are self employed via a company/trust arrangement. Most of our customers are US based, so I guess our risk of being sued is quite high (typical Yanks). We also have an investment company/trust arrangement. Our assets are purchased into our investment trust, and we move income from the business trust into the investment trust so we don't need to carry forward losses.
Other things to consider are land tax thresholds, accounting fees, annual company fees, bank account fees etc.
Cheers
Buddybee
If you are self employed or at risk from being sued, you may want to look at holding them in a Trust to add a layer of asset protection. If your properties are negatively geared you'll rack up your tax losses to use when you are CF +ve or will need to have some form of income coming into the entity to offset the losses.
We are self employed via a company/trust arrangement. Most of our customers are US based, so I guess our risk of being sued is quite high (typical Yanks). We also have an investment company/trust arrangement. Our assets are purchased into our investment trust, and we move income from the business trust into the investment trust so we don't need to carry forward losses.
Other things to consider are land tax thresholds, accounting fees, annual company fees, bank account fees etc.
Cheers
Buddybee
I won't put existing properties into a new entity simply because the costs are prohibitive. You'll be charged stamp duty again if you try to move them to any other ownership structure at this point.
If you're worried about asset protection, you can keep the portfolio heavily geared and use the funds to make future purchases through a trust which will give you reasonably good asset protection.
If you're thinking tax benefits, it's hard to beat holding them in your own name unless you've got some interesting circumstances there.
If you're trying to thing ahead and set up your investments as a business, take another look at the trust structure with a corporate trustee, but still leave what you've got where it is.
I suspect the Investors Club will advise you to keep things in your own name as they tend to suggest the gearing and depreciation benefits.
Please let us know what your thinking is and perhaps we can come up with some suggestions.
If you're worried about asset protection, you can keep the portfolio heavily geared and use the funds to make future purchases through a trust which will give you reasonably good asset protection.
If you're thinking tax benefits, it's hard to beat holding them in your own name unless you've got some interesting circumstances there.
If you're trying to thing ahead and set up your investments as a business, take another look at the trust structure with a corporate trustee, but still leave what you've got where it is.
I suspect the Investors Club will advise you to keep things in your own name as they tend to suggest the gearing and depreciation benefits.
Please let us know what your thinking is and perhaps we can come up with some suggestions.
