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Holding structures

Discussion in 'Accounting & Tax' started by hash_investor, 29th Mar, 2016.

  1. hash_investor

    hash_investor Well-Known Member

    11th Oct, 2015
    Sydney / Canberra
    I was wondering how most investors here structure their holdings. Do they hold them as an individual or through a trust or a company. I have seen people creating small LLC companies in other markets like the US to hold large stock so whats the recommended practice in Australia? Is there a benefit if you create a company and hold your properties in that?
  2. Terry_w

    Terry_w Well-Known Member Business Member

    18th Jun, 2015
    Most people buy in single or joint names. But most don't seek advice.

    There are advantages to holding property in a company or a trust. See my various tips about structure in the legal section.
  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    18th Jun, 2015
    Melbourne, Nationwide
    Many people invest via discressionary trusts with a corporate trustee. The predominant reason for doing this tends to be asset protection and tax flexibility, but there are other reasons do this.

    The catch is there's a significnat setup cost and ongoing costs.

    There can be advantages for land tax purposes, but there be disadvantages as well. It depends on the state and the price points of the properties held by the structure.

    There's also generally a slight disadvantage in affordability as you can't employ negative gearing benefits. There are however circustmances where using trusts could increase longer term affordability quite significantly if you're very strategic about what you buy and what lenders are used. This does tend to use a bit of a loop hole though, I don't know that I'd rely on it.
  4. This is just one rule in the complex area of structures.

    Get personal advice. Whatever you read in a book, website or forum may assist with both confusing you and educating you and will more than certainly ignore some key issue. I will say its better to do some background knowledge work so you have half a idea when you get personal advice. Will save you.