Correct ownership structure for future development

Hi guys, appreciate any thoughts on below? (will also obtain independant advice however seeking feedback also to determine right course of queries).

· Property A & B are next to each other in low density residential zone.

· Property A is owned by parent and property B is owned by an unrelated individual.

· Property B is a boarding house however in the future family would like to purchase this however need to decide which person/entity to buy it in given development potential in the future?

· When elderly parent passes away who owns Property A, then it will pass to son and daughter.

· In order to make development easy option down the track (and not have to incur CGT, stamp duty any transfers etc), I was wondering on the pros and cons of following options (and essentially does it matter if owners of Property A & B are different even if development is across both sites?):

1. Son and daughters personal name 50/50 – will have to declare income which may become quite high down the track (unlikely negative gearing benefit). This will/should however make it easier to develop Property A & B together down the track and split yard etc (or does this not matter if owners differ?). Will have less asset protection being in personal name.

2. Grandchildren’s name given this will be a long-term purchase (they are currently in their 20’s and single). Same as above however will this prove more tricky given extra generation (each family circumstance different of course).

3. Trust entity – allows discretionary distributions to grandchildren, partners etc. Allows asset protection. Losses accrued over years.

4. Company – seems like a lot of developments are done through companies however unsure how this will go as above Property A is owned by parent however Property B will be owned by company?

· Finance options will each have own challenges however is it generally deemed harder to obtain finance now for trusts/companies and in particular with one eye on development/building approval down the track?

 

There are a few options you haven't considered. I suggest you seek out specific legal advice from a solicitor.