PropertyPurchase PropertySMSF ResourcesFamily trust or SMSF? Best structure for property investment comparison

September 18, 2010by Grow SMSF1

For many years the family trust has been the preferred investment vehicle for people looking to build wealth through property – and rightly so. Family trust or SMSF?  This will help answer that question!

However, with self managed super funds now able to borrow to invest in property via limited recourse loans, every property investor who currently has a family trust or who may be considering one needs to take another look at what is the most appropriate structure for their situation.

The following table compares the key differences between using a family trust (also know as a discretionary trust) and a self managed superannuation fund (SMSF):

[table id=1 /]

The above table is not intended to be an exhaustive list of all the advantages and disadvantages of each structure.

You should highlight the key points in the table that are most important to you, your goals and needs and use those to base you decision.

If you are looking for maximum flexibility with the ability to redraw any money you invest as and when you please, then the family trust is probably the way to go.  Alternatively, if you don’t mind locking your investment monies away in the short term, then the SMSF is more likely to suit your needs.

Age is also an important factor when deciding whether a SMSF is for you (and your family).  If you are under age 40, then you may want to get one or both of you parents or your partner’s parents involved.  This will give you both the unparalleled tax benefits and the ability for some monies to be withdrawn tax free once the older members of the SMSF reach retirement age.

If you are over age 40 then you should be looking at your retirement income strategy in more detail and learning toward the SMSF option.

If you can’t decide – there is nothing stopping you doing both!

Enjoy this article?

If you did, click on the link below to sign up for my email list and receive regular articles and exclusive strategies about using your super to save you tax and grow your wealth.

How to set up an SMSF

How to set up a family trust

If you’ve been wondering how to set up a family trust correctly, you are not alone. Thousands of new family trusts are set up in Australia each year for a variety of reasons including asset protection, tax optimisation or to act as the legal structure for a business.

The following article from Christina Wolfsbauer of Intello Legal provide a step-by-step guide to setting up a family trust.

How to Set Up a Family Trust

One comment

Comments are closed.

https://growsmsf.com.au/wp-content/uploads/2020/08/grow-inline-w950-e1597903176158.png
Contact

Suite 247 / 10 Albert Avenue

BROADBEACH QLD 4218

1300 651 263

07 5665 9979

contact@growsmsf.com.au

Twitter
@GrowSMSF – 2 months

This article on investment using an SMSF is over 3 years old, but is still relevant with the intere…

@GrowSMSF – 2 months

So how much does an cost to operate? Real data from cuts through the media spin and misinformati…

Copyright © 2020 by Grow SMSF Pty Ltd. All rights reserved.

General Information Warning & Disclaimer

All information contained on this website is provided as an information service only and, therefore, does not constitute, and should not be relied upon as, financial product advice. None of the information provided takes into account your personal objectives, financial situation or needs, and you will need to make your own decision about how to proceed. Alternatively, for financial product advice that takes account of your particular objectives, financial situation or needs, you should consider seeking financial advice from an Australian Financial Services licensee before making a financial decision.

Grow SMSF does not hold an Australian Financial Services Licence (AFSL) and we are not authorised representatives of a AFSL. We do not provide financial product advice or recommend any financial products either expressly or implied.

From time to time Grow SMSF may produce information or content about specific financial products or services that enable access to specific financial products however we do not recommend, endorse or confirm as suitable any financial product or service featured on the Grow SMSF website or social media assets. This condition specifically applies to any financial product where Grow SMSF provides services at a discounted or preferential fee due to the use of those products, services or accounts. It’s not compulsory to utilise a specific account or service provider to be a client of Grow SMSF however the types of accounts, investments and service providers you use for your SMSF will determine the fees your SMSF is charged.

Where Grow SMSF provides information in relation to a financial product or service supported by or integrated with Grow SMSF the information is factual information only about the operation of the account or service and how data or reporting information is made available to us. Before making a decision on any financial product for your SMSF you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the PDS before making any decision. As financial product and solution providers are frequently making changes to their products and services Grow SMSF cannot accept any responsibility for any outdated or inaccurate information provided on this website or via social media assets.

Grow SMSF Gold Coast based accountants looking after SMSF trustees from around Australia.

Liability limited by a Scheme approved under Professional Standards Legislation.