My wife and I are PYAJ employees and have 3 properties (including our principal home) under our portfolio in personal names. Presently our properties are positively geared I want to acquire more investment properties with a view to become a developer and negatively gear until the development occurs say in 2 years,we are in victoria, Australia. Can someone suggest me the business structure we should be looking to form, so as to be able claim maximum benefit in relation to negative gearing and also keep the maximum profit with us from the sale of the future developments . Can the existing properties be transferred to the trust without incurring stamp duties and will we be able to negatively gear the properties until the trust starts to generate an income?
structure
- Thread starter batz
- Start date
Hiya
Welcome
i think your needs a little more complex than can be met with a simple one paragraph answer, and would suggest you spend some time and a little money with a structure specialist.
Mike @ http://houseofwealth.com.au/
would be a good option
ta
rolf
Welcome
i think your needs a little more complex than can be met with a simple one paragraph answer, and would suggest you spend some time and a little money with a structure specialist.
Mike @ http://houseofwealth.com.au/
would be a good option
ta
rolf
Many comments are a bit contradictory. That's common. It indicates that you could make a mistake so tread carefully.
You own IPs and they product income. That isn't a developer business.
The present IPs are subject to CGT. A developer isn't.
A business ?? Don't mix passive and developer activities.
Developers don't negative gear. They create and sell.
You need to seek comprehensive tax advice on what you propose.
Batz,
Terry is correct, while you can transfer properties to a trust, you will incur stamp duty and need lender approval and incur costs to do so.
The main reason people use trusts is for asset protection, there can be other reasons including income distribution of profits. Trying to transfer losses is not one of them.
I would ask what is your time frame and end goal? Are you planning to sell all the development or hold some and what are the expected profits? Are you going to do this with your existing IP's or new ones?
If it is a development one at a time, buy, hold and rent for say 2 years to get permits in place, then a 6 month build, then perhaps an option would be to do it in own names and use a trust or company as a building vehicle. You gain the presumably negative gearing in the interim to offset against your existing positive rental income, you use a trust as the developer to absorb costs and profit distribution and any CGT will be in individual names. Not saying this is ideal but it may suit.
As suggested, get some professional advice and work out numbers to see what structure will best suit on an expected after tax basis for the development period. A good tax accountant may be the next avenue.
Terry is correct, while you can transfer properties to a trust, you will incur stamp duty and need lender approval and incur costs to do so.
The main reason people use trusts is for asset protection, there can be other reasons including income distribution of profits. Trying to transfer losses is not one of them.
I would ask what is your time frame and end goal? Are you planning to sell all the development or hold some and what are the expected profits? Are you going to do this with your existing IP's or new ones?
If it is a development one at a time, buy, hold and rent for say 2 years to get permits in place, then a 6 month build, then perhaps an option would be to do it in own names and use a trust or company as a building vehicle. You gain the presumably negative gearing in the interim to offset against your existing positive rental income, you use a trust as the developer to absorb costs and profit distribution and any CGT will be in individual names. Not saying this is ideal but it may suit.
As suggested, get some professional advice and work out numbers to see what structure will best suit on an expected after tax basis for the development period. A good tax accountant may be the next avenue.
