The Bank of Mum and Dad

Discussion in 'Starting & Running a Business' started by MTR, 13th Nov, 2017.

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  1. Gockie

    Gockie Life is good ☺️ Premium Member

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    The loan was for the dad... and advertising for his book....
     
    Gockie, 16th Mar, 2024
    #21
    Ian87, mrdobalina, Redwing and 1 other person like this.
  2. skater

    skater Well-Known Member

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    Sydney? Gold Coast?
    Yeah, me too.
     
    skater, 16th Mar, 2024
    #22
    Sackie likes this.
  3. Redwing

    Redwing Well-Known Member

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    Seems odd

     
    Redwing, 16th Mar, 2024
    #23
  4. geoffw

    geoffw Moderator Staff Member

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    Your dad also called you Son?
     
    geoffw, 17th Mar, 2024
    #24
    Terry_w, mrdobalina and skater like this.
  5. Paul@PAS

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

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    Some hints to the scheme

    1. Kids earn $$ and have some equity (this is very important to avoid a full blown trust issue with land tax)
    2. Kids have a % stake. Its not 100%
    ""Once sold, the children will receive an equal portion of the profit after tax"".. A unit trust is best used. In NSW this gets a land tax threshold. And so does each child unitholder. Given that the interest is passive the kids as minors pose few issues. HOWEVER the scheme has a risk. The parents will want to hope the kids dont become unfriendly later in life. Parents as trustees is unwise but parents as trustee Directors may be wise.
    3. Related party onlend...This helps avoid more property in an adults name and land tax. Parents own a % too. Or their company....

    Where this often falls apart is the loan. Company trustee is ideal and this also allows kids to assume control aftre age 18. The LVR and trust gearing needs to be neutral. That OK...Parents SMSF may even have a positive stake if the loan can be structured without security.

    Click bait. I love the message - You really need a property mentor. Guess who ??
     
    Paul@PAS, 26th Mar, 2024
    #25
    mrdobalina likes this.
  6. MTR

    MTR Well-Known Member

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    When these old threads poo up…. 2017…. Just reminds me of those that I miss and no longer posting here… what a shame
     
    MTR, 26th Mar, 2024
    #26
  7. Paul@PAS

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

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    Freudian slip - old threads poo up.
     
    Paul@PAS, 16th Apr, 2024
    #27
    mrdobalina likes this.
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