Choosing the right investment structure can have a significant impact on your financial well-being, risk management, tax planning, and overall investment success. By proactively examining and selecting an appropriate investment structure—whether it’s a Trust, a Company, or a combination of both—you can ensure that your assets are protected, your tax liabilities are optimized, and your long-term goals are supported.

Considerations for Investment Structure:

When it comes to investment structures, there is no universal “one-size-fits-all” solution. The ideal ownership or investment structure can vary significantly based on various factors, including property investment plans and geographical considerations.

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Several factors come into play when establishing and selecting the optimal structure for your investments, including:

  • For property investors, the choice of investment structure may differ based on their preferences for investing in various Australian States and Territories.
  • Each State and Territory has distinct rules and regulations regarding land tax and land tax surcharges, which can influence the appropriate investment structure for property investors.
  • If you are establishing a Trust for your property Investment the States and Territories have different rules regarding the Foreign Beneficiaries.
  • Venturing into offshore property investments and borrowing money for overseas ventures may require a different approach to achieve the optimal investment structure.
  • Careful consideration of these factors is essential to tailor your investment structure effectively, ensuring maximum efficiency and compliance with specific requirements.

How We Help You?

We empower property and share investors like you to implement effective wealth-creation strategies. From diversifying your portfolio to optimizing risk management, our investment structures provide you with the tools to shape your financial future.

Our experienced team is well-versed in tailoring investment structure setups to suit your unique circumstances, offering expert guidance on tax optimization and asset protection. With a keen focus on risk management and industry-specific considerations, we ensure your investments are strategically structured for long-term success. Whether it’s a Trust, Company, or a combination of both, we work closely with you to create a customized investment structure strategy that precisely matches your goals. Rest assured, Investax’s comprehensive approach empowers you to make informed decisions, providing the confidence and peace of mind you need for a secure financial future.

Frequent Asked Questions
Got questions? Well, we’ve got answers.
What is the difference between joint tenants and tenants in common when buying property with others?

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.

What are the advantages of buying property through a company?

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

What are the benefits of using a trust for property investment?

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.

How does property investment through a partnership work?

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.

Can I change the property investment structure after purchase?

Changing the property investment structure after purchase is possible but can be complex and may have legal and tax implications such as stamp duty and Capital Gain. Consult with legal and Tax experts before making any changes to your property ownership structure.

Can I sell/Transfer the property for $1?

While you can technically sell a property for $1, several crucial considerations apply. Tax authorities and legal entities typically assess property transactions based on market value, potentially resulting in tax obligations based on the property’s actual worth, despite the nominal sale price. Stamp duty, capital gains tax, and legal and financial implications, particularly if there are existing mortgages or loans, should be thoroughly evaluated.

What is a testamentary trust?

A testamentary trust is a trust that is established through a person’s will and takes effect upon their death. It allows the testator (the person making the will) to specify how their assets will be managed and distributed after their passing. Testamentary trusts are commonly used for various purposes, including providing for the financial needs of beneficiaries, protecting assets from potential creditors, and minimizing tax liabilities. These trusts can be highly customizable, and the terms and conditions are typically outlined in the testator’s will, providing detailed instructions on how the trust is to be administered for the benefit of specific beneficiaries.

Can we claim a Primary Residence Exemption for a property owned by a Trust?

The main residence exemption under the CGT rules cannot generally apply to properties owned by a trust. The main residence exemption can generally only apply when the dwelling is owned by an individual – refer to section 118-110 ITAA 1997. There are some very limited exceptions to this including:  Where the property is held by a special disability trust.  Where the property was owned by an individual just before they died and is now held in a deceased estate or testamentary trust, there are some special rules which can potentially enable the main residence exemption to apply; or  Where the occupier of the property is absolutely entitled to the property as against the trustee.

What and Who is a Settlor?

he Settlor is the individual who “settles” a discretionary trust by transferring the settled sum to the Trustee (or Trustees). The Settlor must also actually transfer the settled sum. If they fail to do so, the Trust will not come into existence. For a trust to be established, there must be trust property. In most situations, this trust property originates from the settled sum.

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