Strategy Help!!

Discussion in 'Investment Strategy' started by Rusty12, 10th Jun, 2016.

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  1. Rusty12

    Rusty12 Member

    30th Jul, 2015
    Hi fellow investors

    I would like to hear from anybody who possibly was at sometime in my situation, what they did or wish they had done and if my plan is viable…

    Shares are bought in both names between the wife and I

    Current status
    480 k in current share value
    570 current base value
    90K capital loss

    23k (estimated) dividends per year
    110k Cash account

    At the moment we both aren’t working so we have just been enjoying the small but tax-free money and reinvesting to try and average down if they appear to be oversold. We have taken some time off just to enjoy the world but as all this seems to be coming to a close I need to do some planning before jumping back into the workforce.

    My current idea would be to gift or even sell and rebuy in some kind of trust setup (not sure which type) to harness the capital loss in our names.

    By using the dividends every year I was hopeful that I could use this as part of a deposit along with, being able to chip in 30k per year to the trust. By using this hopefully purchase some kind of neutrally to positively geared property and adding to this as/when possible.

    Using the cash account we were going to look at buying a house for a long term capital gains, using this initially for our PPOR (a month or two) then moving and living in another capital city and renting.

    I want my investing strategy to be calculated and boring just adding to over time. I don’t need the trust for anything like asset protection but want it more so that the joys of compounding can take place. Assets being moved from us to our kids without having to change names and have it distributed unnecessarily and more importantly being able to use the trust to provide an income that can be used to enjoy life rather than being handcuffed to a job…

    I’m not looking for specific personal advice (as I will seek professionals when I arrive home) but learn from people in this forums personal experience and knowledge. I am sure I am not reinventing the wheel and a few people have been in this position before…
  2. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

    18th Jun, 2015
    It is unusual to own shares jointly with someone each - actually it may be common, but is not a good idea as you cannot strategically decide who will wear a capital gain or loss.

    Before selling and having a trust buy back get some legal advice on how to structure the transaction and some tax advice on 'wash sales'.

    You might also want to consider selling shares and buying a house to live in and borrow against this to buy shares (or have the trustee borrow) and this way the interest will be deductible.
    Rusty12 likes this.