Best structure; Trust, LAQC, Company or other?

Question from Bronwyn Blake updated on 19th January 2007:

We currently own 2 sections freehold giving an equity of $450k in our own names. We live on one and have a cash investment of $285k. We are about to buy some rental investment properties and are wondering what is the best structure for these; Trust, LAQC, Company or other? Please can you advise.

Our expert responded:

The $64k question! The answer to this lies in your answer to the question of what your long term plans are. No-one can adequately advise you on this until they know what the answer to that question is. Some things to take into account when answering this question are your ages, whether you have children or not, how long you have been in your relationship, what your long term plans are regarding investing in property and so on. The answers to these questions are critical for you to get the right advice. The LAQC regime is under review at present with the proposed introduction of a limited liability partnership (LLP) regime. While LAQC's may give an immediate benefit from a tax point of view, there may be a bite in the tail depending on the review, whether or not LLP's are introduced and the impact this will have on LAQC's. Trusts will not give an immediate tax benefit but will offer long term asset protection. You really need to sit down with a tax structuring expert and discuss all of the options available to you and why, before you make a decision on which way to go.

Kenina Court is a director of Acorn Solutions Limited, an accounting firm dedicated to working with clients to help them create wealth. She is an avid property investor, entrepreneur and seminar presenter on asset protection and wealth strategies.


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