IP Structure- for PAYE

Hi all,

great forum :)

Spent last couple of weeks trawling through the excellent posts here re. IP structure options plus reading Renton's book and DaleGG's book (plus a number of app'tments w/ legal/ accountant types)

My position (in 2 smilies or less) is:
PPOR (unencumbered value ~$800K)
2 IP's (- one in wifes name one in mine).
So basically- limited asset protection (apart from insurance) and no income spitting available
Wish to buy 2-3 more IP's in next 2 years
Risk profile is conservative (Hybrids are probably not for me- "playing at the edges" scares me a little) :eek:

I figure my best option is:
- standard discretionary trust- this will afford me asset protection to a degree plus income splitting. Not being able to distribute the tax losses is the weakness with the DT however in the next 5 years I may leave the PAYE world to do some consultancy etc. If this eventuated the profits from this could be chanelled in the DT structure to flush out the tax losses however as I haven't decided whether I wish to leave the safe bussom of PAYE work if this doesn't eventuate I'm aware of the losses accumulating in the DT structure :( . I'm aware of the strategy of gearing into high yielding sharefunds/ LPT's to offset the IP losses however I'm unsure that calculations based on this strategy using current market figures are sustainable long term

Alternatively, I can look into buying new IP's in joint names and salary sacrificing my wage for interest expenses etc. Advantages here are a more tax effective way of meeting IP expenses however no real asset protection advantages (or have I missed something?)

Above is just my ramblings regards my current options- I'm satisfied that I've undertaken a reasonable amount of due dilligence to date on the other hand I'm not really satisfied with either option.

Any comments are genuinely appreciated,
Wal
 
WallyB

If you are worried about asset protection, then I would not be doing the consultancy via the DT as it exposes the assets of the DT to your consultancy.

Also, if you are do buy IP's in joint names, then salary sacrfice your income for the expenses you (maybe) are effectively creating a tax benefit similar to having them in your own name. So why not have them in your own name and then at least your wife is not exposed thereby increasing some asset protection.
 
You can always put the consultancy into a separate DT and just cross-distribute.
Alex


True, but you need to be wary that you then don't get sued by a tennant and the property DT has an asset being a Beneficiary loan from the other trust.
 
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