Bob's Structuring for His Property Development

Bob wants to know how he should be structuring his business affairs.

Well there are actually many different ways and they all have pros and cons.

Let's look at how Bob might be able to do things over the next few months. Feel free to share the pros and cons that you can see in these different structures. Lawyers pull it apart please and yes Bob must also see a lawyer !!


It's quite common for developers to want to separate risk. So it is common practice for the development entity (sometimes this is a project management entity) to enter into a development agreement with a separate entity that holds the land.


In this structure Bob knows that in Land Trust No 1 he will be selling some of his completed developments so will be making a profit. On Land Trust No 2 he is in the development phase so will be making losses and needs funds.


By having two discretionary trusts hold the Land he can flow profits from Land Trust No 1 to Land Trust No 2 (provided the trust deed allows it - the lawyers will have sorted that out and that relevant family trust elections have been made where necessary).

It’s important Bob gets advice. And it’s important if you are reading this post to get your own independent advice. One changing variable can be a problem !!

#realestate