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

Yes. A trust is a legal relationship between beneficiaries and the trustee.
A company is a separate legal person established under the corporations act.

Both the area of law.

Tax agents can advise on the commonwealth tax aspects (not land tax or stamp duty). So you can ask your accountant (if they are a tax agent) about the tax aspects.

 

Yes. A trust is a legal relationship between beneficiaries and the trustee.
A company is a separate legal person established under the corporations act.

Both the area of law.

Tax agents can advise on the commonwealth tax aspects (not land tax or stamp duty). So you can ask your accountant (if they are a tax agent) about the tax aspects.

 

Not a single person has agreed with your apptoach as being the best option


Not one. As in zero. Im genuinely confused about why the same question is being asked and a different answer expected.

For clarity, yes its the wrong way to think about it.

 

Agree with the above. Pay for the right advice (tax and legal) and set it up right from the start. You would pay many times more for lawyers to be involved when things stuff up. Not worth it in my opinion.

 

1. See a lawyer for the legal aspects
2. See an accountant for the financial aspects

 

If your accountant works out of the Druitt shopping centre carpark then chances are he will just be using a service like cleardocs himself and not giving you any real advice. If you're comparing to this option you might as well save the money and use cleardocs yourself.

However, what people are recommending is that you see an advisor (ideally a lawyer who can advise on tax and structuring) who can give you personalised advice specifically for your circumstances. Your run of the mill accountant and even lawyer probably isn't up to the job. You want someone who specialises in this area.

 

But why get someone who specialises in an area when ive self diagnosed that i do not need a specialist?

 

Alright, I get it. Seek professional advice in both the structuring and creation of trusts and companies.

What I don't get still, and apologies if I'm being slow, is if a lawyer can give you advice and setup trusts and companies, what exactly is the accountant doing? Like do we go to the lawyer first and show what he's created to an accountant? I assume the lawyer knows about the taxation implications, otherwise how can he structure the company/trusts internally and the general flowchart right?

Then where does the accountant fit into this "preliminary structuring" part?

 

I often wonder the same thing!

 

Go speak to the 2 of them and youll know

 

The best option sometimes is finding an accountant who has a good relationship with a lawyer. We've had a few sessions where they both were in the room to get things 'just right'. Some of the stuff that the lawyer added to our Trusts is replicatable and the accountant now adds those clauses to the trusts when they are requested to be created. Accountants aren't Lawyers and Lawyers aren't Accountants. An accountant can provide a setup that is best for you tax wise and order that requisition of documents from a law firm BUT those docs might not suit your legal situation. A Lawyer may provide a setup which is perfect for your legal situation but it not be optimal for your tax strategy.

It's as clear as mud.

But this all may be overkill for your situation.

 

Keep in mind that tax advice is legal advice and both lawyers and tax agents can advise on tax.

 

That may be the case but it doesn't mean that all lawyers are fit for the job. Like anything it's worth finding the right people to have on your investment team

 

Agreed - and with the previous note that having a team which has an accountant and lawyer who can work together is great. At least you can leverage of two parties which can compliment one another and bring greater experience to the advice. Much prefer this to people juggling multiple hats and providing only a fraction of the knowledge - jack of all trades, master of none.

 

it is critical to have a team who talks to each other. The issue with many lawyers is they have limited knowledge of the tax issues of structuring (in particular I have found the area of the small business concessions to be very weak in accounting circles let alone lawyers). Again Division 7a is another area they tend to have limited experience on.

For example I have had very few lawyers discuss the benefits of a partnership of discretionary trusts for two independant parties in relation to the small business CGT concessions. I had a client who saved hundreds of thousands of dollars in tax on the sale of their business by having a partnership of discretionary trusts.

So as mentioned get legal advice from the lawyers and tax advice from either a tax accountant or a tax lawyer.

 

Keep in mind the ongoing accounting costs of maintaining the structure as well, probably somewhere between $500-$1,500 per entity. Is this something where there are decent $'s in profit to justify income splitting from your family trust to u and related parties and is the structure going to be used many times or as a one off or is it asset protection, because you are going to have to offer personal guarantees to the bank anyway which is where a lot of the risk is from my perspective.

I think a lot of newbies get all worried/excited about the "right structure" and want to get all sophisticated and complex with structures which generally turn out to be overkill and quite expensive. Generally better for the professionals setting up and maintaining the structure. Bit hard to get objective advice when they have vested interest given the professionals are going to be able to charge a lot more in ongoing fees to maintain such structures.

I'd suggest everybody seriously consider the benefits of setting up such structures and way up the costs (initial and ongoing).

 

Keep in mind you will also have increased tax agent costs if you invest in your own name. A trust may be only marginally more.

Also lawyers set up trusts, but don't make any ongoing income from it (except amendments maybe).