Property syndicate - tax structure?

From: Francoise B


Greetings all,

Can anyone offer any advice/information about the most tax-effective way to structure a property syndicate? This syndicate aims to buy a run down property, spend some time and money on a rejuvenation/renovation to increase its value, then sell it a short while later at a profit, after taking into account selling and purchasing costs. Any comments, posted here or emailed to me direct, would be greatly appreciated.

Francoise
Co-ordinator, Perth Freestylers network
francois@vmail.it.net.au
 
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Reply: 1
From: Dale Gatherum-Goss


Hi Francois!

This is not an easy one because we have the conflicting issues of asset protection of each of the parties so that they are not at risk, and, the simplicity of distributing profits out to the parties involved.

As always, there are more issues and more ways to skin the proverbial cat.

My choice, would be to establish a unit trust which will own the development. The parties involved purchase units in the trust and receive the profit in the same percentage as their unit holding.

I hope that this helps a little and I suggest that you talk to your legal adviser and accountant as always.

Have fun

Dale
 
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Reply: 1.1
From: Paul Zagoridis


On top of Dale's excellent general advice I would also caution Francoise to be sure to comply with current ASIC rules on private capital raising.

Damn tricky things, those rules (but not insurmountable).

I assume you want the syndicate for you and a few friends with pre-existing relationships? If so then you'll be fine, just remember to check it with your advisor.

Paul Zag
Dreamspinner
The Oz Film Biz site is archived at...
http://wealthesteem.dyndns.org/
 
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