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HDT

Discussion in 'Accounting, Tax & Legal' started by Triu, 26th Sep, 2006.

  1. Triu

    Triu Well-Known Member

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    I want to purchase many properties over the next couple of years! Should i set up a HDT first.

    I want all the benefits of protection, gearing and estate planning. Can anyone please advise!
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Of course you should get professional advice about whether this is the best approach for you and how to go about it ... but a couple of comments:

    Don't set it up until you are ready to make your first purchase - there's no point incurring all the administrative fees (there are ongoing fees too) before you need to. Check with your advisor as to the best timing.

    Do you really need a HDT ? Do you have a high personal income that you intend to keep earning for an extended period ? Do you expect your trust to be making a loss ? If so, a HDT is probably right for you.

    Personally I went with an ordinary discretionary trust for a number of reasons: first, it's much simpler - finances and structures are complex enough as they are without adding artificial complexities to the mix for what may be only a short term tax gain.

    Second, even though I currently have a high personal income and pay a lot in tax, I don't plan on keeping my job much longer, and so won't need the negative gearing benefits then.

    Third, my trust is cashflow positive anyway - so there's no negative gearing to be had.

    Of course, a HDT can act like a normal discretionary trust in some circumstances, so it might be a good choice either way, again, I'll defer to a specialist (like NickM) as to whether it is really suitable for you.
     
  3. NickM

    NickM Co-founder Staff Member

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    Triu
    there are a number of factors to consider when investing.
    I find that most clients tend to buy IP 1 or 2 in personal names unless asset protection is critical.
    This helps affordability, particularly with land tax issues + admin costs.

    A trust is the most flexible structure, however you should get advice as each person is different.
    NickM
     
  4. Redwing

    Redwing Well-Known Member

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    Good Points;

    Make sure its what you want first as I bet there are *numerous* clients of accountants that set up these structures on a whim and dont activate them.

    We have IP's in Individual and Joint names and also in a HDT, any further purchases will be acquired through the HDT as well mainly due to its flexibility.

    Maybe settle on a Strategy first though Trui as you seem to be "bouncing all over the shop" at the moment trying to make decisions on courses, structures etc etc..maybe slowup a bit (Make haste slowly as they say)?

    There's a lot to take in and I'm guessing you want to get it "right" the first time; thats normal, but not always what happens from what I've experienced
     
  5. Triu

    Triu Well-Known Member

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    Thanks Redwing learning so much what they did not teach in me school :)

    Trying to sort out a financial plan and strategy but need some professional help. Am going to see FreemanFox financial planners they said they can help me with my strategy.

    thanks for help!
     
  6. TryHard

    TryHard Well-Known Member

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    Triu, of course they will 'help' you - its how they make their money :p
     
  7. NickM

    NickM Co-founder Staff Member

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    Try hard - dont be so cynical ! :D