Accountant for Forming a Company or trust to buy a Property

I want to form a company or trust to buy the property through which I can get the advantage of negative gearing solely to me, although my wife will also be a co owner

Any recommendations on an accountant who specialise in structuring such companies so that I can get the best possible tax benefit for negative gearing

Cheers

 

I think you may be confused. Losses get trapped in a Trust. Losses in a company will belong to the company, not you.

 

Er, what makes you think something like that exists?

 

Let me guess, you want to live in it and get cgt exemption as well?

 

From recollection losses are retained in the entity (trust or company) and cannot be passed down to an individual. They are held as carry forward losses to be offset against future assessable income within the company or trust.

 

That's my understanding as well. I haven't had the loss part yet and hopefully won't.

 

I will not be living in it for the 1st 5 years
I will wait for the suburb to develop and then only i will move in it
Presently i will rent it out and take advantage of the negative gearing to reduce my Tax liability

My only worry is how to take the entire loss in my name although the property will be in joint name with my wife.
She is in a much lower tax bracket then me
Found this article on the net
Dont know how valid it is in my case

5 Investment Property Ownership Structures – Tenants in Common

Cheers

 

Your asking for conflicting things. Why do you think you can do this?

 

How is it conflicting ?
If tenants in common is legally allowed, then that serves my purpose
i retain 99% share and my wife retains 1%
So all losses accrue to me

What am i missing ?

Cheers

 

You wanted a trust or company. Why put her on the title at alll? Generally the entity that gets the losses also pays capital gains tax. Are you ok with that?

 

Buying a neg geared prop in a company or trust WILL mean losses are quarantined and retained within the entity. When I refer to neg gear I am talking for income tax purposes eg after depreciation etc. Also when you move in there is no CGT exemption permitted. If its in Vic a land tax concession may apply once you move in.

There could be a range of factors affecting this strategy:
- Land tax. ie NSW land tax on a DT is harsh
- No FHOG or other benefits
- Lack of lenders and different LVR
- Costs of trust upfront and annual
and so on........

 

I have no compulsion that i need a company or trust

The idea is to buy the property together with wifes name as far as possible
As there is a substantial loss by way of interest etc. as compared to rent, get the loss advantage in my income tax

Is there any possibility of having joint name and yet 99% negative tax benefit i get ?

Cheers

 

I am in VIC
I am sorry that i have confused you by using company and trust in my opening statement

Can Tenants in common work for me ?

Cheers

 

I think you should seek legal advice as this relates to the ownership of property. Many more things than income tax to consider.

Have a read of my tips and strategies, especially the one about buying properties in one name only.

 

I spoke to my lawyer who is doing the preauction bid document check

He said he had no idea on the same.
So which type of lawyer should i approach ?

Cheers

 

A structuring lawyer! Some property lawyers, estate planning lawyers, tax lawyers.

 

I think you need to get educated....
IP can be bought under different ENTITIES such as:
- Joint Names (automatic split 50% you, 50% wife, IP will not be bound by Will but will pass to surviving spouse)
- Tenants in Common (you nominate the split % for you and wife, IP will transfer to Will)
- Company
- Trust (either Corporate Trustee or individual/s)

So you are saying you will be Tenants in Common (meaning you and your wife's name with % split how you decide - you could even do 99% you 1% her), yet you ask to be under different ENTITY such as Company or Trust?
Each has its legal implications including estate implications, cannot have it all!
Go and see a good tax lawyer (or accountants but accountants usually pass the establishment of Trusts to lawyers and remember there are Trusts and Trusts - meaning the Trust is as good as its Trust Deeds and they vary!).

 

If you get the losses, the capital gains will also go to you when you sell.

 

I tried to PM you, but i cant
How do i get in touch with you ?
Cheers

 

Thats not an issue
I am buying it as a PPOR and have no intentions of selling it

Cheers