Here’ s how it works
• Properties are purchased by a Pty Ltd company.
• The shares of the company are held in the Holdings Trust.
• The Family Trust can lend funds to the Holdings Trust or receive distributions.
• The Family Trust manages your lifestyle assets, while your wealth grows within the Holdings Trust.
This setup offers a balanced approach, providing control, scalability, asset protection, and tax efficiency.
Key Benefits of This Structure Increased Financing Capacity: Companies are more attractive to banks because they operate like traditional businesses. With financial statements, clear ownership, and a director in place, you’ ll be able to secure financing more easily and scale your portfolio faster.
Better Asset Protection: By separating risk across multiple entities including your property Company, Holdings Trust, and Family Trust, you essentially shield your lifestyle assets from potential claims. Property debts and risks are carried by the company, while your personal assets remain protected.
Long-Term Wealth and Legacy Building: Unlike properties held directly in your name, which are subject to estate duties, executor’ s fees, and capital gains tax upon your death, assets in a trust are shielded. They remain outside your estate and can be seamlessly passed down to future generations, ensuring that your legacy is preserved.
Strategic Tax Efficiency: By combining trusts and companies, investors can create a tax-efficient structure that allows for optimised profit distribution and tax planning strategies that lower the effective tax rate.\
In summary, structuring your property portfolio through a company with shares held in a Holdings Trust offers more control, better asset protection, lower taxes, and greater scalability compared to the traditional trust model. It’ s the ideal setup for investors seeking longterm success and a smooth legacy transition.
Got Questions? We’ ve got Answers! Send your queries to info @ rei. co. za
Submit now
15