Trust Problems
- Thread starter Cian
- Start date
As opposed to putting it into a trust and having to transfer it back out again?
I understand wanting to make the correct decision. What I don't understand is why you only emailed your accountant NOW about basic things like interest deductibility (I'm not stating any opinion on trusts, by the way, hybrid or otherwise). These sorts of questions should have been asked well before you created the entity in the first place, and certainly should have been asked before you signed a contract?
Cian, not a criticism, just an observation. You come across to me as if you're really all over the place and don't really have any direction. Might I suggest you sit down and have a serious think about what it is that you are trying to achieve and how you want to achieve it. Then take the necessary steps to make it happen.
You seem to me to be zig zagging all over the place and don't appear to have a lot of control over what you are doing.
You seem to me to be zig zagging all over the place and don't appear to have a lot of control over what you are doing.
I would suggest not making statements like that regarding asset protection as the sole purpose. If anything happens in the next 5 years and in the unlikely but slightly possible that a ;iquidator/ bankruptcy trustee etc was able to link the statement you made on a forum to your real identity and the issue related to something at the time of the statement they may try and chase your trust assests anyway.
A trust is a flexible vehicle that provides taxation, asset and succession planning benefits to name a few. However the use of them purely for either of the first two and especially statements of that intention could trigger unwanted problems.
again not advice just genreal info, see your lawyer accountant etc.
The trust i created was for share investments. Having made some money on these I have since decided that i would like to invest in property instead. I didnt know anything of the benefits of trusts and my friend (owns a property investment company) advised me to just put it in my own name if the property is negatively geared. Thats why I did that. I have since had time to read up more and I think doing it through a trust seems like a more prudent thing to do but I only a beginner so I'd thought i'd do a bti of investigation first. Which lead me here.
Thats ok i apreciate your honesty. I am all over the place, but this is how i get good at things, dive in and learn as you go.
I would suggest not making statements like that regarding asset protection as the sole purpose. If anything happens in the next 5 years and in the unlikely but slightly possible that a ;iquidator/ bankruptcy trustee etc was able to link the statement you made on a forum to your real identity and the issue related to something at the time of the statement they may try and chase your trust assests anyway.
Much better explaination than mine.
I'm just here to learn, apologies for the numerous questions. Still unsure what way to proceed as of yet.
Not a good idea when correcting mistakes (or just changing your mind) involves stamp duty and potential CGT.
Speaking from somone who once set up a Trust because "everyone else was doing it", I suggest you think seriously about the implications of purchasing through a Trust and know exactly what the benefits and downfalls are.
A Trust is a powerful vehicle and can be a great asset, but it can also be a great liability for some, depending on what property(s) it holds and whether or not an income or a loss is made (and possibly how large this income/loss is).
At one point we had nine properties operating through a discretionary Trust. It seemed like a good idea at the time. Six of them were cf+, so things were looking OK, but then we added a few that had big losses. Being in a Trust, the losses are quarantined until it makes a profit, which it hasn't as yet. Also in NSW land tax has no threshold for Trusts, so the costs are extreme. Then you have accounting fees, which are higher than having things in your own name. Of course, this is a cost of doing business, so the fees should not make or break a deal.
We ended up selling two of the properties to ourselves and selling one of the other properties. It now is almost neutral, but over time more will be removed from there. This has been one extremely expensive lesson on thoughougly knowing what the structure you are using is capable of and using what is suitable for your situation. We thought we knew everything, but alas, we did not.
These days I prefer the KISS principle.
