Setting up Index Fund Investment In Family Trust

Discussion in 'Investment Strategy' started by Vish07, 15th Sep, 2020.

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  1. Vish07

    Vish07 Member

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    Hi All,

    I wanted a second opinion about setting up an index fund in our existing family trust. The current situation is as such; I had set up a Discretionary trust to buy an investment property advised by my dad as I was single (asset protection for future in case) at the time and my accountant suggested the same, fast forward 2020 I am married and currently have 3 properties in the trust all positively geared but high depreciation means it's showing loss and I plan to buy properties along the way with equity so some years it may make a profit and some years it will make a loss with depreciations. My parents are also beneficiaries of the trust as they are retired now to offset some of the tax I would incur in future.

    I now wanted to invest in an index fund such as vanguard and make a monthly contribution for the next 20 - 30 years or so and reinvest the dividends in the fund, a very long term thing.

    Would it be a good idea to set it up in a Trust or personal name? I have been told personal name because I will miss out on franking credit if the trust makes a loss. Thoughts?

    Thanking you in advance :)
     
    Vish07, 15th Sep, 2020
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Terry_w, 15th Sep, 2020
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  3. Gen-Y

    Gen-Y Well-Known Member

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    What Terry said is correct.
    Do not mix shares with property in a same trust.
    I was told by another trust solicitor who I use. She knows about IP and share trust setup.
     
    Gen-Y, 15th Sep, 2020
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    Vish07 and Terry_w like this.
  4. Trainee

    Trainee Well-Known Member

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    Second opinion after youve had the operation?

    how much accumulated losses does the trust have?

    asset protection from what exactly?
     
    Trainee, 15th Sep, 2020
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  5. Vish07

    Vish07 Member

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    Thank you Terry, mainly the asset protection was for me prior to being married but that's all good now.

    New trust, might be expensive to run in the short term as I won't be investing a lot with my current situation on a low income. Should I just go a personal name?
     
    Vish07, 16th Sep, 2020
    #5
  6. Vish07

    Vish07 Member

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    Second opion regarding shares but Terry's article makes sense so that's out now.

    $20k loss
     
    Vish07, 16th Sep, 2020
    #6