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Discussion in 'General Investing Discussion' started by jason626, 28th Jul, 2009.

  1. jason626

    jason626 Member

    Joined:
    16th Jan, 2009
    Posts:
    21
    Location:
    moe(melbourne),vic
    Hi guys, im going to purchase a shop free hold and plan on running a business from it, i want my girlfriend to run it while i continue to do my current line of work.

    since i own the shop i wont have to pay rent just the outgoings each year ie. water,rates etc. i was thinking if i set up the business as a company or trust that has its (own idenity) would it be possible for me as the landlord to charge my campany rent each week that way it would came as an expense for the campany and it would have a lower net profit and thus less tax payable for the campany, while the campany would not really be losing money because it goes to me anyway. I was thinking of putting the business in my girlfriends name and charging her rent each week as the landlord but then i wouldent be able to reap the profits of the business as she would own it i would just get the rent. is what im thinking worthwhile or to much trouble and i should just keep the business in my name and pay no rent. But maybe pay more tax, any suggestions would be great thanks.:confused:
     
  2. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    are you going to get a loan?
    What type of business is this?
     
  3. jason626

    jason626 Member

    Joined:
    16th Jan, 2009
    Posts:
    21
    Location:
    moe(melbourne),vic
    no loan is required as the shop free hold is very cheap and im going to pay cash for it, and the business im looking to have in it is a choclate shop
     
  4. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Jason

    I am not an expert on trusts, it seems doable, but I wonder though if that is the best structure for you so I feel that you should seek professional advise.

    Such a decision should be made considering how old you are, your level of income, if your wife has other income, if you have kids, if you have super etc etc

    Superannuation is a very tax affective investment class.
    Have you considered buying the shop in a self managed super fund for example?
    The establishement costs of a SMSF are only a few hundred $ and the operating costs could be similar to that of a simple trust structure but super offers other advantages such as early retirement, lower tax environment, the assets are capital gains tax free after your 60th birthday etc.