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Land Tax in Brisbane

Discussion in 'The Buying & Selling Process' started by Subodh Shirodkar, 23rd Jun, 2015.

  1. Subodh Shirodkar

    Subodh Shirodkar Well-Known Member

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    Hi
    Quick question. Planning to buy a IP in Brisbane.

    Buy & hold long term.

    What are land tax implications of buying in personal name. We also have a Family Trust to use for purchase if required.

    Thx for your response.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Land in personal name (other than man residence) valued at over $600k in QLD subject to land tax. For trusts it is $350k
     
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  3. kr11

    kr11 Well-Known Member

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    FOR REDUCING LAND TAX
    if creating many different trusts to creative new 350k threshold, is it ok to use the same trustee- a non trading company and same beneficiaries but just create a new trust each time

    FOR ASSET PROTECTION
    also i know some people like dymphna boholt recommend a new non trading company as trustee for each discretionary trust for asset protection, but assuming the directors are the same i.e. me and my wife for each non trading company AND the beneficiaries are the same, i don't understand how this could provide more asset protection over using the same non trading company

    thanks
     
  4. Subodh Shirodkar

    Subodh Shirodkar Well-Known Member

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    Thx
    What is the stamp duty % for IP in Brisbane.
     
  5. KDP

    KDP Well-Known Member

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    I'll be careful with this. Please check with your lawyer first as I think there's a risk that the same trustee and beneficiary may result in the 350k threshold being applied to multiple trusts.
     
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  6. RPI

    RPI Property Lawyer, Town Planner Business Member

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    No. You would need to have different companies or otherwise you will pay duty on total.
     
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  7. kr11

    kr11 Well-Known Member

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    thanks khoa and rpi

    If there was a new non trading company as trustee for each trust with the same directors i.e. me and my wife, and the same beneficiaries, would that then be ok.

    thanks
     
  8. RPI

    RPI Property Lawyer, Town Planner Business Member

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    Correct. As each company is a separate entity QLD does not consider those trusts to be combined trusts.
     
  9. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Same trustee could be possible but you need to structure them carefully to avoid aggregation.

    Best to take asset protection advice from a lawyer. Not sure why you would want both husband and wife as director if you are after asset protection as this just creates 2 guarantees for each loan plus liability for insolvent trading and other director penalties, even if non intentional.

    Having a separate trustee for each trust means trust assets are clearly segregated from each other. If the trustee of a trust is wound up all trust assets could be effected and then it would be up to the trustee to prove which assets where owned for which trust.
     
  10. kr11

    kr11 Well-Known Member

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    Thanks terry, so it sounds like it is normally better to have only 1 director for e.g. myself, and then if someone wanted to sue the trustee. i.e. me, could sack myself and put my wife in

    Does having a separate trustee for each trust help for asset protection, if i was the director of all these different companies
    I was thinking if i am the director of all these companies, they could attack all of them?, instead of only the individual trust

    Also, could u tell me the approximate costs( i know u can't be exact) of setting up a non trading company and discretionary trust as it is something i will need to soon, and seems like plenty of them
    many thanks
     
  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    That's not how it works.

    If the company is a legal person separate from its directors and shareholders.

    I charge $1100 to set up a company and $1650 to set up a discretionary trust including GST including legal advice.
     
  12. See Change

    See Change Timing Lord Premium Member

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    we have used same company as trustee in past with no problems .

    though obviously seek legal advice in this situation

    cliff
     
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  13. kr11

    kr11 Well-Known Member

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    thanks terry. r there any other setup costs like stamping of the trust for e.g.
     
  14. kr11

    kr11 Well-Known Member

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    thanks see change
    was that for properties in brisbane and sydney and if so, were u able to get a separate land tax threshold for each trust?
     
  15. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Depends where it is executed. If any party in NSW then $500. If QLD or SA then no duty.
     
  16. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes, there is a trap here in that if the beneficiaries of a trust and the trustee are the same across 2 trusts then it would be aggregated. The trap here is the definition of 'beneficiaries' as one in whose favour a power of appointment was exercised. You could have 2 differently worded deeds but get caught if both trusts distributed to the same person.
     
  17. kr11

    kr11 Well-Known Member

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    Sorry, a silly question
    Can a trust be setup by u, in NSW and executed in QLD with no stamping payable
    thanks
     
  18. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes because under the NSW duties act duty is only levied on trusts settled in NSW.
     
  19. kr11

    kr11 Well-Known Member

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    thats great. so that means i could get a dt trust setup by u in sydney and fly to brisbane, have holiday and stamp it there
     
  20. See Change

    See Change Timing Lord Premium Member

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    We don't hold any properties in trusts in NSW , EXCEPT via bare trusts in our super ( but that's a different question ) . In NSW properties held in trust pay land tax from dollar zero , so expensive way to hold properties .

    Cliff