What Structure should you use for Investment Property Partnerships?

Enterprise plainly is the working|amalgamation|union|combination|unification} collectively of two or other individuals or entities in a normal undertaking or endeavor.

From an accounting, taxation and legal point of view, you can trade your partnership through various trading vehicles including companies and loss attributing qualifying companies, joint ventures, special partnerships, general partnership, limited partnerships, or even Trusts.

Each trading vehicle should have an agreement created between the partners to the investment outlining their obligations and their rights. In a company for example, this is done in the shareholders agreement. In a enterprise, the enterprise agreement. In a joint venture, the joint venture agreement etc.

Which Trading Vehicle?

Selecting the correct structure is a mix of analysing many factors and choosing the vehicle that produces the most benefits for your specific situation circumstances.
A brief summary of things to consider would include the following (regarding partnerships from a home investor’s context):

The Implications of Asset Protection (including limited liability versus unlimited liability for actions of the business, and liability for the banking obligations of the partnership by the partners)

LAQC’s require shareholders that are electing into the LAQC regime to personally guarantee the IRD for income tax.

This can be managed for small shareholders, but is one asset protection consideration that must be looked at.

Also to be reviewed is the question of if your proposed structure is creating wealth outside of a trust, and if so is it possible to both have your losses accessible and contain capital gains inside your Trust for asset protection and avoiding future gifting problems?

Paul Easton works with Matthew Gilligan – an accountant and partner at Gilligan Rowe & Associates Ltd (GRA). GRA is an accounting firm specialising in property and business accounting

Search Engine Optimisation by Digitalawol.com