Can somebody advice me on having an investment house is an advantage being in my name or my wife’s? I’m the one with bigger income.
End how I can minimise tax to the maximum
Warm regards to you all.
StevenIt depends if you are going to borrow money to buy the property or not.
If you borrow I think is better to have it under your name as long what you pay for the loan is more of what you receive from the rent.
If you do not borrow is better under your wife because the rent is income which will be taxed at a lower rate.
You also have to consider improvements you make to the place. If you make a lot of pricy improvement it is better under your name because you can depreciate and claim those expenses.
This are just a few factors to consider.
If it will be negatively geared, having the title in the name of the highest income earner will save tax initially. But this will end up costing you more when the place becomes positively geared. Also you may end up paying more CGT if you sell too.
Have a look at setting up a trust.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Don’t know if I agree with clones. As he/she points out quite rightly initially this will save tax but is only a short term view.
While you might be the larger income earner now (and thus gain the bigger benefit) what happens if you stop working (get sick – heaven forbid, get made redundant or retire).
All of a sudden your wife is the larger income earner and you have no income to claim your deductions against.
There are some trusts that you can set up that allow to you “manipulate” the income to suit situations as they change.
Make sure you get a very good adviser (preferably someone who specialises in this stuff) It can save you a fortune!
Megan
Agree with Megan..
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