Hi there,

We have finally received a time for the council to do their property inspection to see what needs doing to bring the properties up to scratch in terms of new regulations and strata title into two separate units.

My surveyor called me and gave me the contact details of a fire safety specialist who can give me some options that may produce a way round the need for any building inspections.  Let us see what happens?

In terms of the process, a quick refresh at who I engaged and how much the process is costing as some of the bills are coming in.  My lead has been a surveyor and they are costing $2,500 for the whole process.  They do all the plans and council submissions and will need access to the place

You also need to engage a solicitor or conveyancer; careful on this front as they often charge by time and not a fixed price so can catch you out.  Will let you know how this works.  These guys set up the legal stuff like a coporate body.

I am also likley to have to engage a third to run the corporate body as I don’t fancy all the paperwork.  Again will let you know the final tally as we go through the process.

Fingers crossed on the council inspection!!

Hybrid trusts continue to cause confusion in the market.  I wrote a post about this previously, but though I would dig up some more relevant posts for those of you who wanted more information on this tricky subject.  Remember to weigh up the pros and cons depending on the situation and if you think you can use trust to get around paying tax then you are very dangerous ground!

Hybrid Trusts – Where are we now? Where are we going now?

Hybrid Trusts, as the name suggests, are a combination of a Discretionary Trust and a Unit Trust. Unit holders are entitled to fixed income and/ or capital. However there is still a lot of flexibility for the Trustee to deal with the …

What is a Hybrid Trust? By Melissa Gordon At Isnare.com Ezine Articles

Title: What is a Hybrid Trust?, Category: Legal, Author: Melissa Gordon, PubDate: 2009-07-19.

A Hybrid Trust is a mix between a unit trust and discretionary trust.

You borrow money in your own name to subscribe to units in
the Hybrid Trust. The interest is deductible against the rental income
distributed to you by the trust.

The issue the ATO have with a Hybrid Trust is where units are redeemed for
their face value as the property becomes positively geared. They also attack
these trusts where the units are redeemed so that any capital gains can be
distributed on a discretionary basis.

From an asset protection point of view, the increase in value of the asset
will be free from potential creditors. In the case of bankruptcy the units
held, are assets of yourself and could be redeemed for their face value.
This will generally pay out the loan and as mentioned any increase in the
properties value will remain within the trust.

In regards to costs, depending on the costs expect around $2,500 set up with ongoing fees a similar amount.

Trusts also restrict your financing abilities as some of the banks restrict trusts from accessing certain loan products.
Setting up a Hybrid Trust is not without risk from a Tax office perspective,
and is generally for people who have high income levels and are involved in high risk activities such as operating a business  and require a level of asset protection whilst maximizing tax benefits.