Protect your existing assets without triggering tax and stamp duty

Protecting your hard earned assets is increasingly becoming a common concern especially with the increasingly number of frivolous claims. hand house hold pass asset property help guide strategy parent

For centuries people have used trusts to hold assets so as to protect them and to increase their flexibility.

A trust is useful in this regard as the individual does not own the asset; it is owned by the trust.

The individual controls but does not own.

Therefore, if the individual is sued the assets in a trust are not theirs to lose.

The individual through their control decides how trust income is distributed and to who so has the benefits without the litigation prospect.  

Typically, assets were owned by either a company or trust (normally a discretionary trust or family trust).

The problem with a company is the individual is normally the shareholder so they could lose the shares in a successful lawsuit and therefore the assets and cash flow of the company.

The other problems with a company are it does not receive the 50% general Capital Gains Tax discount, traditionally it is inflexible as to who can receive distributions plus if the asset was negatively geared the individual could not take advantage of the tax credits of the negative gearing.

The use of a discretionary trust gives asset protection and the ability to claim the 50% CGT General Discount but again did not give any tax credits to the individual for negatively geared assets.

For property, land tax is also a consideration when using trusts are the various state governments have different thresholds applying to trusts and for the investor at the beginning of the wealth creation the impost of land tax may be too much of a burden.

For the more seasoned property investor who as an individual is paying land tax then the trust has no adverse impact.

Trusts and companies in the way they are typically used do not allow an individual to receive the main residence tax concessions or any first home owner’s concessions which would apply if the family home is held in the individual’s name.

All the above can make things very confusing and without very specialised advice many people built up their wealth in their own coin wealthy rich

With changing views on asset protection and estate planning many people are now looking at how they own assets and are looking for strategies to give them asset protection.

While it is true that people believe they will never be sued or if so they have adequate insurance the facts suggest a different answer in reality or maybe individuals are no longer prepared to take the risk.

For assets to be acquired the use of trusts can be an easy decision but the question is “how do I now protect my assets which have been purchased in individual or company name”.

A simple solution is to sell them to a trust but that is not without a substantial cost.

When you sell assets you pay tax on the profits and you would also need to pay stamp duty which again is substantial on property.

You may also need to refinance if you have debt as the “legal owner” of the asset changes and if the finance market is tight this refinancing may not be easily completed.

So what do you do?

At Metropole Wealth Advisory we have developed a number of strategies that can assist its clients wanting improved asset protection and estate planning ranging from simple solutions for assets which are low in number or value ie the family home and one investment property to more complex solutions for larger asset bases where an individual wants both asset protection, estate planning and the ability to redirect who receives distributions.

Below are two such strategies that do not trigger capital gains tax and in most cases does not trigger any transfer stamp duty on the underlying assets.

Key to these strategies is the fundamental notion that when being sued people want your money not the bricks and mortar or other physical asset that you have.

Therefore, you must protect your equity (net worth) not the actual assets.

1. Equity Transfer

This solution allows an individual to transfer the equity as opposed to the asset from an unsafe environment to a much safer environment. economy property market grow wealth house dream first home

Assume the person has a family home with significant equity (market value less debt) and wishes to purchase an investment property.

A properly arranged loan will allow the investment property to be purchased in a Property Trust™ while still allowing the individual to claim any negative gearing and have the debt which would have been allocated to the investment property to the home.

The interest on the debt if structured correctly is still fully tax deductible as the purpose of the loan is for investment.

This leaves no equity on the home and transfers the equity into the Property Trust™ were it is protected.

No CGT or transfer stamp duty is triggered on the asset.

2. Equity Transfer Trust

This trust structure and relevant agreements are designed to assist clients with a more substantial asset base including properties.

The ETT takes on the role of a lender and places a mortgage on your assets thereby reducing your equity to nil.  legal law

It is your equity which a law suit goes after not the asset so the protection of your equity (net wealth) is the primary consideration.

No CGT or transfer stamp duty on the assets is triggered.

Depending on the state where the assets are located mortgage stamp duty maybe applicable but this amount is approximately one tenth of what would apply as transfer duty on the asset.

Care must be taken in the drafting and execution of these strategies and in particular the relevant claw back provisions of the bankruptcy legislations which would require a four year waiting period from the commencement of the strategy until asset protection is fully available.

This time period is the window in which a receiver in bankruptcy can go back to unravel any strategy.

Appropriate documentation should also be prepared and executed showing solvency statements and the confirmation that there are no potential litigations pending.

The cost of the various strategies must also be considered against the benefits.

Here’s what you can do about this now…

Why not discuss your individual needs & let Ken Raiss, director of Metropole Wealth Advisory, formulate a Strategic Wealth Plan for you, your family or your business? 

Remember attaining wealth doesn’t just happen – it’s the result of a well executed plan so please click here and find out more about our services.

We offer you guidance and support that contribute to seamlessly combining the essential financial areas of your life.

Whether you are a business owner, a professional or a high-income earner we provide you with an individually tailored solution integrating the core disciplines of taxation, superannuation and property investment interwoven with finance, asset protection, succession and estate planning, personal risk insurances and philanthropy.

Using our depth of skills in these core disciplines, we adopt a coordinated project management approach and access other specialists as needed to further enhance our integrated advice solution.

Please click here to organise a time for a chat. Or call us on 1300 METROPOLE.


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Ken Raiss


Ken is director of Metropole Wealth Advisory and gives strategic expert advice to property investors, professionals and business owners. He is in a unique position to blend his skills of accounting, wealth advisory, property investing, financial planning and small business. View his articles

'Protect your existing assets without triggering tax and stamp duty' have 16 comments


    June 4, 2020 Danny

    What’s the best form of structure to use for person entering a second marriage with 2 adult children who wants to pass on the family home to those children. The new marriage will reside in that property.


      Michael Yardney

      June 4, 2020 Michael Yardney

      I can understand your concerns you have with a new relationship in a blended family.

      There are too many considerations to give you advice over the Internet.

      This really will require high-end structuring and estate planning advice.



    May 28, 2020 Anthony Carmichael

    One investment property which may not qualify for CGT exemption due to a number of years as foreign resident. What are the CGT implications if the property is transferred to a trust?


      Michael Yardney

      May 28, 2020 Michael Yardney

      Moving an asset to our trust is the equivalent of selling your property which means you would have to pay capital gains tax and the trust would have to pay stamp duty..



    April 26, 2020 Ty

    Hi, I currently have two properties (one house we live in currently and the other a house that we previous lived in but are now renting). Unfortunately, I have 100% of my debt against the house we are living in and accordingly am paying significant tax on the rental income from the other property. Is there any way I can transfer the debt to the rented property so that I can reduce tax?


      Michael Yardney

      April 27, 2020 Michael Yardney

      Sorry there is no easy way – that’s why I always recommend you use a finance strategist not go directly to a broker or bank



    February 5, 2020 Carikku

    The sign for Metropole Wealth Advisory says “independent expert advice” – I didn’t think they were independent? They are not listed in the Profession of Independent Advisers Association.
    Please can you clarify as to whether they are independent?


      Michael Yardney

      February 6, 2020 Michael Yardney

      Metropole Wealth Advisory is not owned by a financial institution and is not aligned to any product or service, so the advice given is tailored to their clients individual needs, with not bias.
      What type of service are you looking for?



        February 7, 2020 Carikku

        Thanks for answering Michael. I am interested in independent financial advice, as recommended by Barefoot Investor and Choice magazine. Is that what Metropole offer when they say “independent expert advice” please?


          Michael Yardney

          February 7, 2020 Michael Yardney

          Barefoot Investor and Choice give general information – not individual advice to clients. Metropole Wealth Advisory gives personalised specific advice to clients



            February 10, 2020 Carikku

            Michael – can you give me *INDEPENDENT* advice or not please?

            Michael Yardney

            February 10, 2020 Michael Yardney

            That’s what we give our clients and have for years. In fact only last week we won another international award as the Best Property Consultants in Australia – 2020


    September 23, 2019 Kim


    We have some properties in a family trust and are contemplating buying an another apartment.
    I would like to move a couple of apartments and a new one away from the family trust into a potential property trust. Would CGT or a potential asset loss apply.Would we need to pay stamp duty?


      Michael Yardney

      September 23, 2019 Michael Yardney

      Yes a sale would occur and you’d have to pay Stamp Duty and CGT. This could be very expensive
      I don’t know what he reason behind this is, but Ken Raiss has a number of strategies to that may be of interest to you. Why not organise a consultation with him? Please click here and leave your details



    May 13, 2019 Matthew James Shelley

    Can you use an Equity Transfer Trust in protect the Retained Earnings in a Pty Ltd Company.. Assuming 100 Fully Paid Shares @ $1.00. so paid up Capital is $100.
    The Shares are held in the Directors Personal Name. And Retained Earnings are $2M.
    Can such a Trust be used to protect The Directors Equity… ?????


      Michael Yardney

      May 13, 2019 Michael Yardney

      Mathew – clearly there are significant sums of money involved. Ken has some excellent structuring advice that will help you, but can’t be discussed in this forum. Please organise a time to speak with Ken personally by clicking here


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