For those who work in a litigious environment, this video is for you!
Here is what I talk about in this video:
Hello, it’s Jason at iChoice. I’m mindful that this video is probably going to be very much of an interest to medical professionals so I’m not going to talk too much about tax right now. My next video will be about bucket companies, unit trusts, and the seven whopping years that division 7A gives you to flush out your income to avoid higher marginal tax rates. But, right now, I want to talk about asset protection and why doctors should be married to rich people.
What I’m saying is that for most doctors, your spouse would probably be the owner of your primary residence. It’s because the two biggest tax havens in this country, self-managed super fund, and your family home have to be got right. In the litigious environment that you doctors work in, it’s always important to have your home in your partner’s name. Now that’s not always the case. First of all, you might not have a partner. Second of all, you might have bought that property before you even had a partner. But there’s a quick fix to that. Just add your spouse to the title. There’s no stamp duty to do that.
There’s no real reason why you should buy a home in a company name or anything else. And, you shouldn’t even really ever buy a property in a family trust. I mean you’d just use a unit trust and use the family trust to soak up the shareholding. This applies not only to doctors but to anybody in business who works in a litigious environment. It’s always a good idea to have the business in one person’s name, particularly if you have unsecured lending, like a rent roll, a pharmacy loan, or a loan for surgery that was not secured by a property. You would obviously have a different bank that holds all the wealth or have the wealth in your partner’s name. That would make sense. Some people prefer to use potential liability, but it gives you more control over what you do, with your partner. In general, your family home should be owned in personal names.
When it comes to buying properties that you’d use for business, like a New South Wales business asset, for example, it should really be held in self-managed superannuation. If you don’t need to borrow to buy your commercial property, then that’s fantastic. You can buy that in a unit trust. Let’s say you just don’t have the money in superannuation, so you have to buy it in a unit trust. And over time, as you make your voluntary $25,000 contributions into superannuation every year or even non-concessional contributions, every year they can buy units in the unit trust. So, while the unit trust is owned in your personal name, every year, some of your shareholdings go across to your super fund. However, this only works if you don’t have borrowing against the property. It’s because as soon as self-managed super funds have a controlling entity in anything, you are bound by all the rules that come with SMSF leading. Thanks for watching!