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Best Structure for Positive CF IP and Developments

Discussion in 'Real Estate' started by KamakazeSalami, 24th Apr, 2012.

  1. KamakazeSalami

    KamakazeSalami New Member

    7th Jul, 2009
    Canberra, ACT

    My wife and I currently own our PPOR (which has a line of credit for investment purposes secured against it).

    We also own three other investment properties, one in my name, one in hers and one in both our names. These three IPs are all negative geared. We are approaching our borrowing capacity but more importantly I am planning on leaving my full time job to focus on Property Investing.

    The plan is to purchase a positive CF property next (to help offset the negative geared ones) as well as to do a JV Buy-renovate-sell deal with a builder/renovator.

    What is the best structure to own these new deals in? We used to own a business and have a family company which is the trustee for a discretionary family trust (hasn't been used for some years now). I was thinking we could purchase the properties in the trust (my wife and I would draw from the Line of Credit to lend the deposits to the trust).

    The advantages as I see it are that the earnings of the trust (positive cashflow and profits from renovations) can be distributed to the beneficiary with the lowest income (likely to be me as I won't be working full time any more).

    I"m just not sure about the capital gains implications.
  2. Terryw

    Terryw Well-Known Member

    9th Jun, 2006
    You could use the trust, but the trust deed would probably need to be updated. Maybe better to just start a new one. Are there any carried forward losses?

    If buying in a trust which out for land tax