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nerdpool, post: 147176 wrote:
That’s an interesting scenario you describe, and I’m curious as to how you would go to prevent it.
I was thinking about transferring ownership of my company and property to a trust within a few years, but from what you describe I guess my best bet would be to do this, but to also move the property into the control of a company controlled by the trust. Is this correct?
Can you point me at any resource to read a bit more on this and other potential pitfalls? I will seek legal and/or accounting advice before I make any decision, but I like to understand things in reasonable detail myself beforehand.


Separate Entities are the Key, Keep trading entities separate from investing entities an make sure that there are only commercial relationships between them that are structured properly.

You have also got to be careful regarding stamp duty and land tax issues (no land tax concessions for discretionary trusts in NSW).

Companies are not a good vehicle to hold property as you do not have access to the 50% CGT discount that a trust or individual does

Entity A owns the business.
Entity B owns the property

Entity B rents the property to Entity on terms no different to if Entity A was controlled by someone you have never met, under a formal lease, prepared by a solicitor, at market rates.

If Business goes under Entity B loses tenant but still holds property assuming it can afford any holding costs

If call made on property Entity B might go under but Entity A keeps trading and pays lease to who ever ends up owning the property.

If business and property owned by same entity or not structured properly, and either thing happens to either, both are gone.

I can’t think of a single resource, you could try googling asset protection strategies. My stuff comes from a mixture of Court cases, legal study and business experience, as well as clients going through liquidation or when you go after other people for a client.