Hi folks,
As some of you already know my forte is the sharemarket . I am however intending to make a pretty big move (gradually) into Melbourne property from 2007-2009 , increasing the rate of action/gearing as I perceive the market is turning.
My current structure is pretty simple. Two properties in my name (PPOR and one IP) with a DFT as a share trading vehicle + a corporate benficiary (I am sole shareholder). I am about to address a couple of issues as follows:
- move much of my trading to the company to avoid the issue of having to loan back after tax funds from the companny to the trust and to increase my ability to retain profits
- seeing as the company is becoming very large in terms of net assets I intend selling my shares to a new trust created to hold the shares. This should improve my asset protection status and make any dividends the company declares more flexible taxation wise.
Now .............assuming the above makes sense I am after people's thoughts on the best structure to purchase property in. I understand the basic ins and outs of HDTs , trusts in general etc..........so no explanations needed. Negative gearing is not an issue for me as my trust/company generate more than enough funds to meet any negative cashflow needs - hence no real need for HDTs.
The engine for all of this will be my company providing a flow of desposits to either myself or a trust setup exclusively for property. It is my intention to buy at least 10-12 properties in the next 3 years.
What I want to do is to create the most effective structure whilst considering:
- general tax effectiveness (ie preferable not sourcing deposits via dividend distribution as extra tax may be payable)
- land tax
- general simplicity/common sense.
- asset protection. My job is share trading for the trust so other than my properties I have very little litigation risk relative to most.
My thoughts/questions I'm asking myself at the moment are:
- it would be preferable for the company to loan the deposit money interest free to a newly created "property trust" (a simple DFT) and then take a property loan in the name of the trust. I assume that if an interest free loan from the company was to be used it would have to be via a trust setup as loaning to myself as an individual may be seen as avoiding extra tax on dividends??
- given the above whether the trust is justified given the land tax penalties. Flexibility in terms of CGT is obviously an issue but I have no intention of selling any property . I also need to consider the estate planning benefits.
Any ideas/suggestions welcome. Given the millions of dollars in property we're talking I am ofcourse going to consult my own accountant. I just like to have as many ideas on board as I can before these appointments as I often find that the best ideas come from myself and talking to others (including this board) beforehand.
Cheers,
Ed
As some of you already know my forte is the sharemarket . I am however intending to make a pretty big move (gradually) into Melbourne property from 2007-2009 , increasing the rate of action/gearing as I perceive the market is turning.
My current structure is pretty simple. Two properties in my name (PPOR and one IP) with a DFT as a share trading vehicle + a corporate benficiary (I am sole shareholder). I am about to address a couple of issues as follows:
- move much of my trading to the company to avoid the issue of having to loan back after tax funds from the companny to the trust and to increase my ability to retain profits
- seeing as the company is becoming very large in terms of net assets I intend selling my shares to a new trust created to hold the shares. This should improve my asset protection status and make any dividends the company declares more flexible taxation wise.
Now .............assuming the above makes sense I am after people's thoughts on the best structure to purchase property in. I understand the basic ins and outs of HDTs , trusts in general etc..........so no explanations needed. Negative gearing is not an issue for me as my trust/company generate more than enough funds to meet any negative cashflow needs - hence no real need for HDTs.
The engine for all of this will be my company providing a flow of desposits to either myself or a trust setup exclusively for property. It is my intention to buy at least 10-12 properties in the next 3 years.
What I want to do is to create the most effective structure whilst considering:
- general tax effectiveness (ie preferable not sourcing deposits via dividend distribution as extra tax may be payable)
- land tax
- general simplicity/common sense.
- asset protection. My job is share trading for the trust so other than my properties I have very little litigation risk relative to most.
My thoughts/questions I'm asking myself at the moment are:
- it would be preferable for the company to loan the deposit money interest free to a newly created "property trust" (a simple DFT) and then take a property loan in the name of the trust. I assume that if an interest free loan from the company was to be used it would have to be via a trust setup as loaning to myself as an individual may be seen as avoiding extra tax on dividends??
- given the above whether the trust is justified given the land tax penalties. Flexibility in terms of CGT is obviously an issue but I have no intention of selling any property . I also need to consider the estate planning benefits.
Any ideas/suggestions welcome. Given the millions of dollars in property we're talking I am ofcourse going to consult my own accountant. I just like to have as many ideas on board as I can before these appointments as I often find that the best ideas come from myself and talking to others (including this board) beforehand.
Cheers,
Ed
