The best tax structure for property investment is one that will provide the greatest opportunity to avoid high taxation, double taxation, and re-investment and growth for your business. This can be done through three fundamental investment structures:
- Single asset Funds
- Multi asset Funds
- Multi manager Funds
Deciding on the best property tax structure for your business’s property or assets, can be a complicated by a number of factors. Investment structures define how assets are owned, by who, in what way, and this impacts on tax responsibilities – both business and personal.
Property Tax and Investment considerations:
All property owned by a business is subject to property tax. Factors to consider when deciding on what property assets to purchase, and how those property assets should be owned, include:
- Are you a sole proprietor or co-owner?
- Is it a family business?
- What is the size of your business, and what are your prospects and / or plans for expansion?
- Do you wish to invest for the short, medium or long term?
- What divestment strategy would you need for the sell-off of properties?
- Are you planning on offshore property investments?
- Would you need to create a personal trust to insulate your share of the business’s property assets from your other property assets?
- What other risk protection do you need as a shareholder?
Owning Properties / Assets:
Factors to consider when deciding on the above include the tax benefits (or otherwise), and risks, associated with:
- Owning assets under one’s own name
- Co-owning assets and to what degree (e.g. 50/50 partnership, 20/80 share-hold etc.)
- Fully owning or co-owning property as a business / company
- Fully owning or co-owning property as a Trust.
Property tax is a certainty. What isn’t, is the amount you will pay, and how it will impact your business’s bottom-line, value and share values. A tax structure for property investment should be put together by professional financial services with experience in property tax and business tax structures – and should be reviewed annually.
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