Hi everyone,
I'm just wondering if this sounds like a silly idea (based around avoiding paying some land tax and therefore saving money over the long term). My wife is in a litigious profession and I am not. Our overall goal is to have enough IPs and shares one day to give us a passive income so we can retire young (around 45 to 50yo).
We will never put any investments in my wife's name as the risk of her being sued is too high. But we'd like the chance to income split when we come to our early retirement. We know this can be achieved with some of the assets in a family trust (or hybrid trust)
We live in Sydney and will buy most of our IPs in NSW. We know that if you buy an IP in the name of a trust then you pay land tax straight away on every dollar the land is worth. However, if you buy in an individual's name, then you can buy $261k worth of land in NSW before becoming liable for land tax.
So my idea was this....the first few IPs we buy in my name only until we reach the $261k threshold of land value. Then, we buy all subsequent IPs in the name of a trust. THis enables us to still protect all assets (assuming I never get sued of course, which is extremely unlikely) but be able to split income in some way when we retire (with some of the IPs in a trust). Plus, we avoid having to pay land tax for all of those initial IPs (which, over time, can add up to quite a bit).
What do yo think? Is this stupid?
Cheers
John
I'm just wondering if this sounds like a silly idea (based around avoiding paying some land tax and therefore saving money over the long term). My wife is in a litigious profession and I am not. Our overall goal is to have enough IPs and shares one day to give us a passive income so we can retire young (around 45 to 50yo).
We will never put any investments in my wife's name as the risk of her being sued is too high. But we'd like the chance to income split when we come to our early retirement. We know this can be achieved with some of the assets in a family trust (or hybrid trust)
We live in Sydney and will buy most of our IPs in NSW. We know that if you buy an IP in the name of a trust then you pay land tax straight away on every dollar the land is worth. However, if you buy in an individual's name, then you can buy $261k worth of land in NSW before becoming liable for land tax.
So my idea was this....the first few IPs we buy in my name only until we reach the $261k threshold of land value. Then, we buy all subsequent IPs in the name of a trust. THis enables us to still protect all assets (assuming I never get sued of course, which is extremely unlikely) but be able to split income in some way when we retire (with some of the IPs in a trust). Plus, we avoid having to pay land tax for all of those initial IPs (which, over time, can add up to quite a bit).
What do yo think? Is this stupid?
Cheers
John
