* Get an accountant who has the knowledge in Property Accounting. Basically, an accountant is very good at crunching with numbers. But if your intention of hiring them is to manage your properties, then he should also have the necessary knowledge in property management. His expert perspective and advice will enable the business to make better decisions.
* Get an accountant who has the skill to relate with other professionals. Finding the specified accountant in tip number 1 may be difficult. An option for this is getting an accountant with the skill to relate and work with other professionals. This is necessary when the business decides to outsource property management companies wherein the accountant has to provide the pertinent information to them.
* There has to be a ledger of transactions that will reflect all the transactions entered into by the business.
* It is also advisable to create a separate bank account for the business and for the personal income of the owner.
* There should also be clear categories of every transaction and operation of the business. These may include property taxes, payroll taxes, capital receipts, capital cost transactions, liability principal, as well as interest payments.
* Use online accounting software. These are very useful tools for making all your recording and data storage quick, easy, and accurate.
A Family Trusts is simply a legal relationship between three parties: The settlor (the person creating the trust), the trustee (the person who holds and controls the property of trust) and the beneficiary (the person for whom the property of the trust is being held). The nice thing about a trust is that it’s possible to have the income of the trust taxed in the hands of the beneficiaries, who may pay little or no tax if they are minors and have little or no other income.
Setting up a trust does come with a cost, so it’s not generally going to make sense unless you’re willing and able to commit a subtantial sum to the trust over a short period of time. You can make this a loan to the trust if you want, so that you can take back your capital again later, as a repayment of the loan.
Once the money is in the trust, any interest and dividend income earned in the trust will be attributed back to you to be taxed in your hands while the beneficiaries of the trust are minors (unless you charge the taxman’s prescribed rate of interest on a loan to the trust), but capital gains can be taxed in the hands of the beneficiaries. Also, any second generation income (that is, income on the income, even if it’s interest or dividends) can be taxed in the hands of your children.
You can pay for all or part of your child’s education costs out of the income or capital of the trust. The taxman will consider payments to third parties, including reimbursements to you, as being paid to the beneficiary as long as those payments were clearly for the benefit of your child. To the extent that little or no tax has been paid on the income of the trust over the years (by having income taxed in your child’s hands), you’ll effectively be using pre-tax dollars to pay for the child’s education.
The benefits of the trust include: protection of the assets of the trust from creditors, splitting income with your children, maintaining control over the assets, and flexibility to use the trust funds for things other than education. There’s a lot to consider when setting up a trust.
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