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Are online Trusts and Company Setups worth the discount? For a subdivision project.

Discussion in 'Accounting & Tax' started by smooth excellence, 21st Aug, 2016.

  1. smooth excellence

    smooth excellence Well-Known Member

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    Basic question is, is it worth it to spend around $100 for a trust online, or $500 to register a company online or the $1000+ a brick and motor accountant would charge?

    Basically I wanna buy a block of land and subdivide it, a friend and I both want in on this project.

    I was advised by an accountant that this is the optimal structure here, to purchase land into a Unit Trust, with Trustee as Company A. This unit trust would then payout to Y Family Trust (mine) and my mate's H Family Trust. The Trustee for Y Family Trust would be Company Y, who would be in charge of distributing to Y Beneficieries (2 other family members and myself).

    [​IMG]

    My question is, given this setup, are there any pitfalls in simply registering all the Trustee Company, The unit trust, and the Y Family Trust online e.g. via cleardocs?

    https://www.cleardocs.com/downloads/sample-unit-trust.pdf
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Heaps.

    You really need legal advice on something like this. Did your accountant advise on all the aspects such as
    Land tax
    Stamp duty
    Succession
    Control
    Structure of the trustee company
    Who should be shareholder
    Director
    Terms of company constitution
    Death of director
    Death of trustee
    Shareholder agreement

    Structure of each trust
    Who should be director
    Beneficiary
    Appointor
    What happens on death of any of above
    Incapacity of anyone
    Type of discretionary trust
    Open class or closed class
    Powers of trustee
    Default beneficiaries or not
    Etc
    Etc
     
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  3. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    NO they aren't worth it. They are worse than a DIY Will kit because at least with a Will kit you're likely to be dead and not see the fuccccckups it causes
     
  4. smooth excellence

    smooth excellence Well-Known Member

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    This is in QLD, so stamp duty doesn't apply. But the rest of the points, I agree are complex and need advice on.

    I feel like that companies are "simpler" in terms of structure and are harder to screw up, and that trusts might require nuances that only an actual accountant can provide?
     
  5. thatbum

    thatbum Well-Known Member

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    If you want simple, then just buy it as individuals in tenants in common. What are you trying to accomplish with the structuring exactly?
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    What do you mean stamp duty doesn't apply? Of course it does.

    Have a look at the corporations act - extremely complex.
     
  7. sanj

    sanj Well-Known Member

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    What you or anyone feels is irrelevant and, if inaccurate, potentially very costly.

    Its a very simple proposition, it is impossible for you to know what you dont know atm so you do not have the info and understanding required to make an informed decision.

    Youre talking about taking on your first project, which already has a signiificant amount of risk there. The idea of saving a few hundred dollars to do it online when youre going to spend hundreds of thousands on the project isnt one id abvocate.
     
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  8. Scott No Mates

    Scott No Mates Well-Known Member

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    @smooth excellence - you are spending how much on a site but don't want to pay legals to protect your assets? I'm with @sanj
     
  9. Perthguy

    Perthguy Well-Known Member

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    This might not be the best structure for this venture. I also suggest legal and qualified tax advice. I like to DIY a lot but this is one area where it really is better to pay for good advice.
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    The trouble with online deeds is that even if they are of a good quality, they are standard issue and cannot be modified. You won't know the terms of the trust until after it has been paid off and then if you wish to change something you will not be able to edit the document. You would need to do a deed of variation and probably pay for a lawyer to do it and this would cost more than the original deed.
     
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  11. smooth excellence

    smooth excellence Well-Known Member

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    Do I have to pay stamp duty on my trust? - eCompanies Australia

    No Stamp Duty is applicable on trusts in QLD, although in other places like NSW and VIC there is.

    Fair point, I guess this goes back to, if you see an accountant for advice and to setup a trust, would the trust they setup actually be tangibly different in function to a generic one and achieve a better tax outcome? I get the importance of a good "flowchart structure" (like the one above) but the actual companies... is there that a discernible tax difference between a $120 company structure vs. a $1300 accountant made one?
     
  12. smooth excellence

    smooth excellence Well-Known Member

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    The way I see it is like seeing a specialist doctor who prescribes you a medication: You need to see the specialist for advice on what medications to take (definitely don't just randomly take stuff), but arguably a generic (online) version of the brand name (accountant generated) medication would achieve the same effect.

    Or is this the wrong way to think about it?
     
  13. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Whybwould you see an accountant to set up a trust? They are not legally qualified and would just be using a service like cleardocs anyway. See the accountant for tax advice and a lawyer for legal advice.

    Stamp duty is not payable on a trust establised in qld. But if any party is in nsw for example $500,dury would be payable.

    But you need to consider other aspects of stamp duty. Change in trustee. Change in appointor. Change in unit holders. Subdivision etc all have duty aspects to consider.
     
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  14. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I should add no duty on a trust where the settled sum is cash but there could be if dutiable property is settled.
     
  15. JDM

    JDM Well-Known Member

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    Exactly this. Just because there is no duty on the trust don't think that can't trigger transfer duty on any property the subject of the trust.

    Something like this I would go with Rob Lalor of Redchip - Robert Lalor.
     
  16. Scott No Mates

    Scott No Mates Well-Known Member

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    But why would you pay for advice?
     
  17. smooth excellence

    smooth excellence Well-Known Member

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    Wait what? So who should I see about this structure, a lawyer or an accountant? I'm confused, what can the accountant help me set up, neither? Do I get all my advice from a lawyer then?
     
  18. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    A lawyer as this is legal advice.
     
  19. Scott No Mates

    Scott No Mates Well-Known Member

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    If you're considering structures - I'd talk to my engineer and architect too. :p
     
  20. smooth excellence

    smooth excellence Well-Known Member

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    For the Trust setup and the Company setup?

    Then what do I need to talk to an accountant about?