There are many reasons why you might want to hold your investment property in a trust structure in Australia. Here are some of the key considerations:
1. Asset protection
One of the main reasons to hold your investment property in a trust is to protect your assets from potential creditors. If you were to hold the property in your own name, it could be at risk if you were to ever be sued or become bankrupt. By holding the property in a trust, you can ensure that it is protected from any potential creditors.
2. Estate planning
Another key reason to hold your investment property in a trust is for estate planning purposes. If you hold the property in your own name, it will form part of your estate and will be subject to probate when you die. This can be a lengthy and expensive process. However, if you hold the property in a trust, it can be distributed to your beneficiaries much quicker and without the need for probate.
Trusts also offer a lot of flexibility when it comes to how you can manage and distribute your assets. For example, you can specify in the trust deed how you want the property to be managed and who should benefit from it. This can be particularly useful if you have young children or if you want to protect the property from future creditors.
4. Tax advantages
Trusts can also offer some tax advantages. For example, if you hold the property in a trust, you may be able to avoid paying capital gains tax on any future sale of the property. Trusts can also be used to minimise stamp duty on the purchase of the property.
5. Professional advice
It is important to seek professional advice before setting up a trust. This is because there are a number of complex legal and tax issues to consider. You will need to ensure that the trust is properly structured and that all the relevant tax implications are taken into account.
If you are thinking about holding your investment property in a trust structure in Australia, then it is important to seek professional advice to ensure that it is the right decision for your particular circumstances.
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