Trust & Commercial IP

Discussion in 'Accounting & Tax' started by DomW, 16th May, 2018.

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  1. DomW

    DomW Member

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    Hi guys, I'm new here but have a few properties under my belt so not a complete novice.
    I'm looking to get advice as I want to setup a trust for any future IP.
    Discretionary 'family trusts' are the common choice but a few questions...

    1) can I as an individual lend the full amount to the family trust to buy a commercial property?
    2) then can our business which is a small biz, pay the family trust rent which gets distributed to me and my husband?
    3) can any expenses be claimed through the trust eg: outgoings?
    4) as the commercial is in nsw, are there any land tax exemptions if purchased in a trust?

    Thanks so much.
    Cheers,
    Dom
     
  2. Terry_w

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

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    1. Yes. Lend to the trustee is possible as long as not the same person.

    2. Yes potentially.

    3. Yes

    4. No
     
  3. Terry_w

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

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    Perhaps get some advice on a SMSF instead.
     
  4. DomW

    DomW Member

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    Thanks Terry, I don't want to do it SMSF because I want to be able to access the funds now.. i'm 36 now so got a little while to go.
    Any downside you know of with a discretionary vs a unit trust?
    cheers,
    Dom
     
  5. Terry_w

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

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    Heaps of downsides. Have a read of my legal tips here.
     
  6. DomW

    DomW Member

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    I guess the main reason though is distributions via blood linage but also liability. I know landlords insurance has a component to it for personal liability but its quite limited from what I read in the PDS.
     
  7. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Blood lineage is not what many think. It can be opposite of what is intended. Its no magic shield
     
  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Really ? I would say the opposite. The insurers legal advisers are on a retainer and love to defend claims. They then get paid more. I had to handle a claim against a former employer by a client. The insurer sent us to see Phillips Fox (three lawyers) and they worked hard and defended a $4m claim. No liability. Not a cent in costs. They argued issues relating to negligence. Workplace was a footpath open to the public. Head contractor gave up admitting they wouldnt pay for 24/7 security despite us recommending it in our standard T&C for every project.

    The $20m public liability claim is hard to win. Its not like Greenslips.

    Many think asset protection is v's tenants. Why ? One of the best asset protection mechanisms for any property is a mortgage.