Hey all, Looking for some advice on which name I should purchase my next and subsequent purchases in. My two current ones are in my personal name. I work for a PAYG salary which is relatively small atm (~$50k) but due to my young age that will definitely be rising in the next few years, and I'd like to minimise my tax. Should I make my next purchases in a company name (which i will have to start), which to my understanding is limited to 30% tax as aposed to 48% for PAYG salary? Please note I'm quite unfamiliar with this topic and I know I should talk to my solicitor and accountant with these matters but I'd like to get some basic knowledge before that. Thanks in advanced ! I also realised that this should be I'm the tax section, mods can you please move it if possible thanks
Sounds like a legal question to me, with tax aspects Before considering you might want to read my tax and legal tips, especially the one about a company owning property.
See Legal Tip 55: A Company Owning Property Legal Tip 55: A Company Owning Property And I have written over 200 legal and tax tips with most of them on structuring: Index of Legal Tips Terryw's legal Tips Index Index of Tax Tips Terry's Tax Tips
From a tax perspective use of a company would mean: - You dont own property. How would loans work ? - Different credit rules possibly - No neg gearing - No CGT discount - Profits trapped in the company unless paid to shareholders as a franked dividend with higher tax implications likely (The belief company profits are taxed at 30% is not strictly correct) + A new land tax threshold You may find that the existing purchases will become more neutrally geared (maybe positive) and so the additional purchase may offset this. Negative gearing isnt permanent but positive gearing is.
And as you won't own it you cannot will it at death. If you own the shares these may be willed though.
Thanks for your help everyone, still unclear which direction to go with, much more research is required.
No I'm not. Just looking to get some general knowledge to get on the right path before I speak to my accountant as I mentioned in my first post. Isn't that what these forums are for?
