My partner and I are looking to merge our finances (we aren't married, but have two kids and have been together for five years). We both own investment properties and I have shares in the business I work for. Any tips?

Hi Al E,
Why are you looking to merge your finances? Are you intending on getting married?
From most lenders point of view as you have lived together for a significant time they will be considering all of you assets, liabilities and income as communal.
However from a taxation point of view there may be significant disadvantages with the loss of negative gearing benefits etc. if you merge your finances.
I would suggest sitting with your accountant and discussing the implication of merging your finances before undertaking any merging.

Hope this helps
Awesome Albert

Al. Good afternoon. With a five year relationship and two children, you guys are definitely a couple. Some people may suggest an agreement between yourselves acknowledging who introduced what values to the relationship should it ever end, however with Children involved, my experience is that such agreements are not worth the paper they are written on.
From a borrowing status, there is no difference between married or de facto.
Should you be thinking of putting each other's names onto property titles held in a single name, then I understand that you can get stamp duty exemptions. Please take both legal advice and also taxation advice on this, particularly if they are investment properties.
Should you have any need for financing or even a health check on the existing loans, then please give me a call
Best regards
Ken Olds
1300 ASK KEN

Hi Al,

The initial conversations about merging your finances can sometimes be awkward (especially if you have been managing your finances independently for over 5 years).

The two tips I would would give is
1. Set some goals together and place the level of priority for each of them. Understand what you as a family would like to achieve in the short, medium and long term.
2. Establish a budget - What I find useful for my clients is to sit down and work through a budget so you and your partner can get a good understanding of how much each of you typically spend and on what items. I would also suggest allocating a discretionary amount which allows each of you can spend without guilt. Based on the surplus, you can start putting steps in place to achieve your goals.

From my experience, couples that work together keep each other accountable and allows you a better chance of achieving your goals. Your investments are only a vehicles to allow you to do the things you want to do in life.

From a tax perspective, all income and capital gains/losses from your current investments will continue to be declared in your individual tax returns as it has been in the post. For future investments, you can speak to a professional about how to own and structure your investments to achieve the best tax outcome depending on each of your financial situation.

Hope that helps.

Tony Lu
Financial Planner
Announcer Financial Planning
1300 133 991