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.
You might also be interested in
Types of investment managers and Investment structures explained
Investment Managers can be individuals, small 2-person companies, right up to large multinational investment management firms. There are also various types of investment managers - managing single investments to large investment portfolios for individual clients or...
What does Short-term insurance risk mean?
A short-term insurance policy is an essential aspect of business and personal risk management. You can use a short-term insurance policy to cover almost anything – for a few weeks to a few years, with variable and changeable premiums that are based on changing needs...
Funding a buy-sell agreement with life insurance
Buy-sell agreements are one of the most essential contracts between co-owners of a company. The point of a buy-sell agreement is to protect the company and the remaining co-owner (or co-owners) if one partner dies, by keeping the ownership in the company and/or in the...
With over 23 years of unwavering expertise, I am a seasoned Chartered Accountant committed to financial excellence. My journey in the realm of finance has been marked by astute strategic insights, meticulous attention to detail, and an unyielding dedication to precision. Over the years, I've navigated the complexities of financial landscapes, providing invaluable counsel to diverse clients. My proficiency extends across auditing, taxation, and financial management, coupled with a profound understanding of regulatory frameworks. As a registered professional, I have consistently upheld the highest standards of integrity and ethics, earning a reputation as a trusted advisor in the dynamic world of finance.
