Looking for a better approach to protecting your assets? Chan & Naylor are the leading asset protection specialists in Australia with advanced tax effective asset protection strategies and systems designed to preserve your wealth from generation to generation. Talk to us about your asset protection concerns.
Protecting assets against frivolous creditors is increasingly becoming a common concern prompting many to look into reliable asset protection strategies. It has been quoted that Australia is closely following the trend of USA litigation numbers with NSW, Victoria and Queensland only just behind California where 1 in 3 people in the USA either sue someone or are being sued by someone. Many Australians who have built up their entire wealth and property portfolio in their personal names are especially vulnerable to losing their assets. Assets owned in personal names can be better protected without triggering taxes if you get asset protection advice.
There are several myths and mistakes regarding asset protection – in particular, owning assets in individual names, the use of company ownership and the improper use of certain types of trusts in the absence of sound tax planning and estate planning advice.
Trusts are one of the more beneficial asset protection strategies as the person does not legally own the assets – the assets are owned by the trust – therefore the asset is not theirs to lose in the event that they get sued. The trust is controlled by the individual but they have no ownership of the assets inside the trust. In fact, the use of trusts can be traced back to ancient Rome. There are many different types of trusts (discretionary trusts, unit trusts, hybrid trusts, family trusts, fixed trusts, testamentary trusts, to name a few) each are appropriate for certain situations as they have they each of relative advantages and disadvantages, and each provide varying degrees of asset protection.
In general, trusts offer reliable asset protection, but some fail to provide the flexibility and tax advantages that property investors can be entitled to. For example, the use of a discretionary trust does provide asset protection as well as the ability to claim the 50% CGT General Discount, however discretionary trusts does not allow any tax credits to the individual for negatively geared assets. Land tax is also a concern in that NSW does not receive the land tax threshold and Victoria only receives a relatively small threshold.
Clearly there is more to asset protection than just protecting assets. There are many tax implications in using certain investment structures. Smart investors protect their assets in flexible ownership structures that allow them to claim tax benefits in line with their investment plan.
The best way to protect your assets is to be aware of the all the tax and legal ramifications of using particular types of property investment trusts and structures and ensure you get personal tax advice from an asset protection specialist with regards to your investment portfolio and wealth creation plan.
In the absence of property specialist asset protection advice, many people build up their wealth in their own names- leaving them exposed to high risk of losing assets. With changing views on asset protection and estate planning, many people are now looking at how they own assets and are looking for better asset protection strategies. That is why asset protection advice from a property specialist tax accountant such as is recommended. Smart investors get asset protection advice from property tax accountants they trust. All the above can make things very confusing without specialised asset protection advice (You can ask our Senior Partners during a complimentary 10-15 minute phone consultation).
A simple solution is to sell those assets to a trust, but that is not without a substantial cost. When you sell assets you pay tax on the profits and you would also need to pay stamp duty, which again is substantial on property. You may also need to refinance if you have debt as the “legal owner” of the asset changes and if the finance market is tight this refinancing may not be easily completed.
An important thing to remember is that not all trusts are created equal.
So what do you do?
As Australia’s leading property specialist accounting and wealth advisory group, Chan & Naylor has developed a number of asset protection strategies and structures to benefit our clients. These range from simple protection strategies for assets which are low in number or value (i.e. the family home and one investment property), to more complex solutions for larger asset bases where an individual wants both asset protection, estate planning and the ability to redirect who receives distributions.
Chan & Naylor trusts and structures are developed with long term property investing in mind. That is why our trusts have been built to last…literally! Our trusts have no vesting date (traditional/generic trusts expire after a usual 80 year period after which huge tax events are triggered such as CGT and potentially stamp duty on all the assets held in the trust). Our trusts also have strong lineage clauses built into them which means that your assets will only go to blood relatives and not be up for grabs in the family court if your children gets divorced from their spouse. Effectively, your Chan & Naylor structure will enable you and your family to grow, protect and safely pass down wealth from generation to generation.
Below are four examples of how we can help you improve asset protection that does not trigger capital gains tax and in most cases does not trigger any stamp duty on the underlying assets.
We’ve also developed a Trust specifically for property investors – learn more about the Property Investor Trust®
Care must be taken in the drafting and execution of these strategies and in particular the relevant claw back provisions of the bankruptcy legislation which would require a four year waiting period from the commencement of the strategy until asset protection is fully available. This time period is the window in which a receiver in bankruptcy can go back to unravel any strategy. Appropriate documentation should also be prepared and executed showing solvency statements and the confirmation that there are no potential litigations pending. The cost of the various strategies must also be considered against the benefits.
If you want to discuss how to get better asset protection, to get a quote, or for further information on asset protection strategies in general, please contact your local Chan & Naylor Partner by leaving your details here. on 1300 250 122 who will arrange a suitable time to meet with one of our team.
This solution allows an individual to shift the equity as opposed to the asset itself, from an unsafe environment to a much safer environment…Learn more.
This trust structure and relevant agreements developed by Chan & Naylor to assist clients with a more substantial asset base including properties…Learn more.
This is a three part process that ensures that you keep assets within the family lineage…Learn more.
This is a more complex asset protection strategy for those with significant assets, including business assets or the shareholding in a company operating the business…Learn more.
ou can learn more about our unique asset protection systems designed to help individuals get the tax effective asset protection they’re looking for. Click here to download a free digital copy of our Asset Protection eBook: How to protect assets in your personal name without triggering taxes”
Get better asset protection with Chan & Naylor – we’re experts at helping clients with asset protection strategies.
Reliable Asset Protection Specialist Advice…
It can take a lifetime to grow your wealth and asset base, but only a moment in time for it to be lost and taken away. The fact is, Australia is one of the most litigious states in the world. So there is no surprise that protecting assets against frivolous creditors and lawsuits is increasingly becoming a common concern.
Chan & Naylor have developed four strategies that can assist its clients wanting improved asset protection and estate planning ranging from simple solutions for assets which are low in number or value i.e. the family home and one investment property, to more complex solutions for larger asset bases…
Is it necessary for you to apply asset protection strategies?
If you’re not a doctor, a business owner, a corporate executive or someone with plenty of assets, you might not think so. But the fact is, anyone who’s accumulated wealth should consider asset protection solutions…