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Legal/tax structure - have I been given good advice?

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  • Legal/tax structure - have I been given good advice?

    Hi all - I find it very hard to know whether I am receiving good accounting and legal advice, though my advisors SEEM to be quite good...
    I'd really appreciate additional comments from the wise people here on this forum:

    Recently-established discretionary trust
    - owns all but 1 share in each of several companies, two companies actively trading and profitable
    - I am settlor and one trustee, family member other trustee, I am one of the beneficiaries
    - registered for GST
    Companies as above, 1 share owned by me personally
    - all registered for GST
    - couple are not active at all
    - I am paid a $40K salary by one of the companies

    My plans:
    Buy several positively-geared properties in the next 2 years
    - owned through 1 or more companies owned by trust, some properties part-owned with an investment partner
    - investment partner will have LAQC to own his part of the properties, I will have a standard LLC
    - may trade some properties if opportunity arises

    Some of my questions:
    1. Is this general approach sensible?
    2. Are there any things I am obviously missing?
    3. Can I just use the existing inactive companies I have to purchase the property?
    4. Should I be making sure that the property-owning companies have no other activities?
    5. Am I right in thinking that I don't need to use an LAQC to own my property, as I don't earn over $60K and I have income-producing assets in the trust (ie businesses) that can soak up any tax losses?
    6. Do I need more than one trust e.g. one for property and one for riskier businesses I might try?
    7. Will I need to use a separate discretionary trust and company for any property trading?
    8. Are there any obvious problems I'm likely to face with the banks using this structure e.g. proving servicing ability?

    Thanks in advance for any help!

  • #2
    Sounds OK.

    Points I noted:
    Why is the trust GST registered.
    Put each activity into a new company (limited liability so no risk of lossing everything). Generally you would have the trust own these.
    I wouldn't mix property investing and other activities (see above).
    the one share in your own name enables you to draw a "shareholder salary " whihc is good and very flexiable.
    Is your salary market rate as you can get into trouble with IRD if it is not.

    Bit to much to digest at the moment. Might have another go later.