Structures and Capital Gains Tax

Prior to making an Australian investment that’s expected to result in a potential capital gain generated sometime over the next couple of years, I’d like to start thinking ahead of time about what might be the best structure to put the investment into before any CGT issues might be triggered.

What is the best legal tax advantaged structure to hold such an investment in? An Australian Family Trust or in an individual’s own personal name who resides in Australia?

Thanks in advance.

 

Generally an appropriately drafted discretionary trust is the most flexible way to reduce CGT. a SMSF may be even better.

But it all depends....

And CGT is only one conisderation of many.

 

Thanks Terry, yes already have a well drafted discretionary trust. What 'other' considerations ought I be contemplating if I chose the trust method as the investment vehicle rather than the individual if I can ask please?

 

Are you a resident for tax purposes?

Some may consider a smsf as it has a low tax environment.

 

Yes, and also have a SMSF as well.

 

There are many. some of which are
stamp duty on restructure
ability to transfer control
income tax
land tax
asset protection
funding structure
ability to borrow
control on death
incapacity
etc

 

Thanks Terry, you make a good list.

 

If you haven't done so already it might be a worth while exercise for you to compare the pros and cons of a discretionary trust against the pros and cons of a unit trust. A unit trust can offer CGT benefits but depending on your requirements it may offer you advantages/flexibility over a discretionary trust.

 

Or a combo - unit trust with the units owned by a discretionary trust.

 

Thanks, will do.

 

Thanks for the link.