澳洲Australia property Accounting Newbie ! | Sydney

在澳大利亚


Hi all,

Was after some advice about visiting an accountant.

I would like to talk to an Accountant about structuring myself before I purchase further properties. I want to talk to him/her about what I should do whether its purchase properties as a trust or in our own names.

The question.

When you first visit and accountant do they charge you from the very first minute you walk into their office on the first visit?
For example should I ask about their fees before I ask them for any accounting advice?
Will they charge you while talking about fees etc etc?
When it comes to asking for advice on structuring should I see a CPA or will a normal accountant? (whatever that is)
Can anyone recommend one from Sydney?

Sorry for all the n00b questions.

Cheers,

SS- :D  

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SillySausage said: ↑
When you first visit and accountant do they charge you from the very first minute you walk into their office on the first visit?
For example should I ask about their fees before I ask them for any accounting advice?
Will they charge you while talking about fees etc etc?
Cheers,

SS- :DClick to expand...
I met an acocuntant like that once.
I thought he was kidding till I got the bill in the mail :eek: (it was just very non-technical general spiel....)

Cheers,

The Y-man  

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Hi SS

Do a search for NickM on this forum as he is a brilliant accountant who should be able to help you. He is in Sydney.

Dale  

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The Y-man said: ↑
I met an acocuntant like that once.
I thought he was kidding till I got the bill in the mail :eek: (it was just very non-technical general spiel....)

Cheers,

The Y-manClick to expand...
And when you query the bill, you are charged for the time to provide the info. Well, they only get to do to it you once, and then you walk.  

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All accountants are different. My view, and that of our practice, is that if you are meeting with us for 30 minutes to tell us a bit about yourself, get to meet us, determine whether we can be of assistance, discuss fees, etc. then that is of no cost.

Once the appointment goes over that time and we start providing advice then our normal fees apply. I don't think you should be charged for discussing fees and meeting an accountant to determine whether the two of you can work together. Don't be offended though if during the first meeting the accountant is very general and says that the issues you may want some answers to are of a technical nature and would be charged as part of a later consultation.  

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Thanks for your feedback guys.

Just another quickie.....Whats the difference between a CPA and a non-CPA solicitor...apart from the cost. :rolleyes:

Also, whats the average cost per/hour of an accountants advice ?

Cheers,

SS- :D  

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CPA is an professional accounting body accreditation. Not something a solicitor would normally have.

To reduce advice cost don't ask "So, tell me about trusts". Instead educate yourself beforehand (search for "trusts" on this forum for example) and go in there with a good general understanding so you can ask some specific questions. It would be costly to get them to have to explain the differences between a trustee, a corporate trustee, an appointer, a beneficiary, a discretionary trust and a HDT, etc. :)  

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oops I meant accountant !  

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Would people recommend Trust magic to learn about these things in more detail? I have seen a few comments about this book.  

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SillySausage said: ↑
oops I meant accountant !Click to expand...
If you are after an accountant, they should either be a CPA (Certified Practising Accountant), a CA (Chartered Accountant), or a NIA (National Institue of Accountants)

Cheers,

The Y-man  

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My own accountant is just a Tax Agent, but with years of experience. It depends on age: if they're old enough they might have been trained at a time when the qualification wasn't essential: these days almost every accountant will be qualified.

But don't get blinded by the qualifications: I'm a CA, but I couldn't explain trusts to save my life. My specialty is corporate bank accounting which means I have nothing to do with personal tax on my job. Some accountants will specialise in small business, personal returns, etc. Find someone who is experienced with property investors. Best if they invest in IPs themselves.

You have to know enough to know whether your adviser is good or not. I've heard 'professional' accountants explaining how contamination between private and investment expenses isn't a big deal in mortgages. I was like, 'Get away from me, dude!'
Alex  

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Read trust magic. Costs about $99, but at least you know what you are doing, and can refer back to it later.

As for what accountants charge - ask them. Us accountants here won't tell you what we charge openly - we like to foist it on unsuspecting clients after we do the work.  

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Hi SS

Don't spend $99.00 on a book, search the web I did, I found all I need to know there B4 I went to my Accountant.

There are a lot of legal sites that have free info on them.

try this one, for family trust info.

http://www.taxlawyers.com.au/manuals/familytrusts.htm

I did find another one that explained them all if I find it again I will post it.

Celeste  

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Hi all


Here is another, this one has all the trust

http://www.faccs.com.au/trusts/index.php

Celeste  

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Celeste said: ↑
Don't spend $99.00 on a book, search the web I did, I found all I need to know there B4 I went to my Accountant.Click to expand...
If you already have some idea about a trust, what it does, and why it helps property investment, then there's no need to buy "Trust Magic" (which, by the way, is written by one of our resident accountants, Dale Gatherum-Goss).

But, if you would like to see in a very clear way, succinctly, what a trust is all about, and how you can benefit from it- especially if you don't have much idea already- buy it.

I had asked my (no ex) accountant if I should buy a property through any company or trust structure. He told me that it was not necassary.

Thanks to Dale's advice, I did buy through a (discretionary) trust.

The property was positively geared, but I had depreciation losses which I could not claim. That lost me a few thousand over the four years I had the property.

BUT

1. I had another trust making a profit. That loss could be distributed to this trust making a loss. Nice :)

2. The property has (almost) been sold. There will be a nice profit. If that had been held in my own name, I would be paying quite a few thousand more in tax than I now will be (probably tens of thousands). $99 is not that much to pay for that sort of potential return.  

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Another question....

Can a person who lives overseas is not a resident or citizen or anything like that be a beneficiary of a trust. (they are the parents of my wife to be).

If so is it worth looking into it or would the tax implications outweight any benefits?  

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Hi all

originally posted by geoffw:
I had asked my (no ex) accountant if I should buy a property through any company or trust structure. He told me that it was not necassary.

Thanks to Dale's advice, I did buy through a (discretionary) trust.

The property was positively geared, but I had depreciation losses which I could not claim. That lost me a few thousand over the four years I had the property.

BUT

1. I had another trust making a profit. That loss could be distributed to this trust making a loss. Nice :)

2. The property has (almost) been sold. There will be a nice profit. in tax than I now will be (probably tens of thousands). $99 is not that much If that had been held in my own name, I would be paying quite a few thousand more to pay for that sort of potential return.Click to expand...


I am sorry, I am at a loss. Depreciation is treated the same way, regardless of how the IP was purchased ie: purchased under a trust or in your own name or a company.

If you purchase a IP in your name and it runs into a loss situation, you claim it against your income, if you continue to be in a loss situation that loss is carried over to go against income in the following financial year. I cannot see how you could not claim it.

Owner privately
ie: year 1 - income 20,000.00 - IP loss 30,000.00 = loss of 10,000.00
year 2 - income 20,000.00 - yr 1 loss 10,000.00 (carried over) - IP loss 10,000.00 = taxable income of nil

Trust is exactly the same, unless as you say you have another trust with a profit to offset it. But maybe you do not, in that case no difference.

The bonus with a trust is that you can distribute a profit to whom ever you like(depending on how you set the Trust up), this is usually the lowest income earner. If it is purchased in one name it all goes to the one person.

It all depends on your intentions and current financial situation. That is why you should always seek an Accountants advice first.

Also, I did not say / mean / imply that he/she should not buy the book, only that, why fork out $99.00 (and that is a lot of money when you are first starting out) if you can get enough info to get you going free. Did you look at the sites I posted, I believe they explain things clearly and that any further info would depend on your individual circumstances.

Celeste  

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Celeste

What I was trying to say (unsuccessfully) was that in each year, although the actual income from the property was greater than the actual expenses (positively geared), the depreciation expenses meant that my tax losses plus actual expenses were much greater than the income- so, if the property was in my private name, I could have claimed losses against my personal taxable income. But those losses were held within the trust, so I had to carry them forward until I could offset them against a gain.

I'm not sure what you are saying about a loss within a trust. My understanding is that, if you make a loss in a standard family (discretionary) trust, you cannot claim that loss against your personal income. You must carry that loss forward into future years to offset any gains in the future.

This is all very complex. If I had read this in the forum, in the way I am trying to explain now, I most certainly would not have gone into a trust.

I looked at your sites. They are technically correct, and I could have gained all the information I needed to start a trust. But they really don't tell me, in the way that Dale does, what benefits it really has for me. Like, substantially reducing my risk to lawsuits. Like, reducing your income tax by thousands of dollars per year. Like, being able to distribute my income in a much more effective way. All in simple English.

I'm sure that the information that Dale has presented is available somewhere. Trusts have been around for hundreds of years. And rich people have used them for protecting their assets for a long time. So it's highly unlikely that the information Dale presents is original, or not easily available.

But until Dale presented it to me, I was not aware of the huge benefits.

His book presented things in easily understood English, not a lot of legalise or accountantise- and the end result was that I saved tens of thousands of dollars.  

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I'd agree "TRUST MAGIC" is a worthwhile purchase, though being a bit obtuse I have to re-read it every now and again :D

Then there are the numerous great posts on this forum if you search on Trusts with GREAT contributors  

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Hi all

Geoff - I will try to be a bit clearer

- a loss in a Trust at the end of the financial year cannot be distributed to any one, its stays in the trust until you have a profit / income to put against it in the next year.

- a loss for an individual at the end of the financial year also stays around until the next year to be claimed against your income for that year.

Exactly the same situation. So in both situations you may not have the full benefit of the loss re tax but you will the next year.

The difference is. if you have losses every year, you can continue to offset it aginst private income every year even after you have sold all your IP's. A Loss in a Trust when you close it is gone.

A lot of investors may only ever own 1-5 properties over 10 years, and may well benefit more from just putting them in their own names (hubbys or wife or both), especially if wify is a stay at home.

If however your strategy is to build an empire 130 properties in 2 years, then a Trust / pty ltd situation maybe better.

My point was this, you can over complicate things reading lots of books (and this is from some one who loves books, you should see my study). Most the time I find "keep it simple'' is a better way.

In regards to an accountant you only need to educate yourself with the basic's, then find a good accountant ( one who is recommended by other property investors and has property investments - they then have personal reasons to know all about it) and spend your $99.00 on advice relevant to your situation. Instead of filling your head with masses of information that may never apply to you, and makes a simple situation complicated and over welming (sorry can not think how to spell it - brain freeze)

I hope all is clear now.:)

Celeste  
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