Archives: Investax FAQs

In a property investment partnership, two or more individuals or entities pool their resources to purchase and manage a property. Partnerships can have varying structures, and profits and losses are typically distributed according to the partnership agreement.

Trusts offer flexibility in distributing income and can provide tax advantages. For example, discretionary trusts allow income to be distributed among beneficiaries, potentially reducing the overall tax liability. Additionally, trusts are often used for asset protection and estate planning purposes.

Purchasing property through a company can provide limited liability, protecting your personal assets from the property’s debts or legal issues.

Joint tenants and tenants in common are two common ways to co-own property. Joint tenants have an equal share in the property, and if one owner passes away, their share automatically transfers to the surviving joint tenant(s). In contrast, tenants in common can have unequal shares, and if one owner passes away, their share is passed on according to their will or intestacy laws, not necessarily to the co-owners.

Choosing a company or trust structure for your business over a sole trader or partnership offers several advantages. These structures provide limited liability, protecting your personal assets from business debts, making them appealing for risk management. Trusts, particularly discretionary trusts, offer tax efficiency through income distribution among beneficiaries. They also serve well for asset protection and estate planning, allowing for the orderly transfer of assets. Companies, with separate tax rates and perpetual existence, are attractive to investors and convey professionalism, while also facilitating business continuity and scalability. Depending on your specific business goals, legal requirements, and financial situation, consulting with experts such as accountants or legal advisors can help determine the most suitable structure for your needs.

Yes, it is possible to have multiple business structures for different aspects of your business, such as a company for one division and a trust for another. Each structure will have its own legal and tax implications.

Tax implications vary by structure. Sole traders report business income on their individual tax return. Companies pay tax on their profits at the corporate tax rate. Partnerships and trusts distribute profits to partners or beneficiaries who report them on their individual tax returns.

The most common business structure in Australia is the sole trader structure, followed by companies, Trust and partnerships. The choice of structure depends on factors like liability, taxation, and business goals.

Choosing the right structure depends on factors like the nature of your business, liability preferences, tax implications, and future growth plans. Consult with a business advisor or accountant for personalized advice.