FAQ 38 Where can I find out more about JV structures and tax using these structures
The type of deal will to a great extent have a bearing on the structure that should be used for a JV deal.
For a deal that is short in duration ie a buy reno and flip of an older property will probably need a simpler JV structure than one which is a \’keeper\’ ie buy,reno,hold with the rental income to be split multiple ways.
When new properties enter the equation, the aspect of GST will have to be catered for.
The structure that you settle on has to be able to handle all of the tax and accounting issues of all parties.
The simpler JV structure can often be accommodated in a single trust with a corporate trustee, each JV partner being a director ( providing that all partners are money partners) This would be back up with a signed JV agreement.
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If one partner is the funding partner then this partner will usually either own the property in their own right OR better still the property will be purchased by a trust where the partner is a director of the controlling Corporate Trustee. The non funding partner will then simply have a JV agreement with the funding party.
If the partners both provide funds then both will be directors of the trustee company.
Structure diagrams can be found in the manual Asset Protection Secrets on page 184 onwards
The Asset Protection Secrets manual can be accessed online by clicking THIS LINK
