Dear All,
I got into a sticky situation when my accountant is preparing the tax return for my family trust, hope someone can shed some light.I purchased my first Investment Property (IP) a few months ago, using a Family Trust structure and Company as the trustee. I thought everything was setup properly until my accountant pointed out that the Title Deed of the property only show "Company Pty Ltd", which could mean the IP was bought by the Company instead of the Trust.
My Accountant insists that a proper Tittle Deed should have "Company Pty Ltd ATF Family Trust".
The Solicitor who took care of the settlement insists that you can't put "ATF Family Trust" in the Title Deed and having "Company Pty Ltd" is sufficient.I'm still learning all of the above, and obviously very concern because if the IP is owned by Company instead of the Trust, it will change my tax position significantly.
While my Accountant is arguing with the Solicitor, please help to clarify what name is supposed to be on the Title Deed of the IP.
Thanks
Hi Marc
So how would you go about taking the next step? assuming u cant find any cf + properties. do u just wait to see how quickly u can pay off ur existing ip so its cf + then buy the next one?
The title should read XYZ Pty Ltd ATF Smith Family Trust.
Richard Taylor | Australia's leading private lender
Many thanks for the quick answer.
Now, obviously my solicitor didn't do her job properly, what is required to have this changed in the Title Deeds? (or should it be changed?)
Will it attract stamp duty?Not sure which State you are in but the Transfer document may show it is owned in Trust. (Certainly this is the case in Qld)
Unfortunately really need your Solicitor to accept any mistake and rectify it for you.
Richard Taylor | Australia's leading private lender
The title should be in the name of the trustee, which is the legal owner. in this case the company. The trust is not mentioned anywhere on the certificate of title. So I would agree with your solicitor.
Richard, are you thinking of the Contract of Sale? Here it is possible to put AFT XX trust, but even this is not essential.
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
I live in WA, and the property is also in WA.
My solicitor seemed to be in the same opinion as Terryw, that there's no need to have "ATF XX trust" in the title deed.From a layman point of view, I can see it's not possible to know who actually owns the property just by looking at the Title Deed, if only Company Pty Ltd is written there.
Thanks again for a constructive discussion.
The important aspect is that the minutes show that the property has been purchased for the trust. In NSW and Victoria from my experience the legal title is held in the name of the trustee without any reference to a trust. It certainly used to be in NSW that if the contract of sale referred to ABC Pty Ltd as tustee for XYZ Trust that double stamp duty was payable. Not sure whta the position is now.
In Qld the Trust would be mentioned and the Form 1 Transfer has a specific box that needs to indicate where the purchase is made under a Trust structure.
Admitedly can't comment outside the Sunshine State with any certainity so would bow to Terry expertise in NSW.
Richard Taylor | Australia's leading private lender
Hi
I can tell you 100% the ATO will not have any problems with your trust tax return.
I also have the same structure as you.
"Company PTY LTD.. ATF family trust."
and only the company name is on all the title deeds NOT ATF family trust… your solicitors is right and it is the same in all states.
I have property in W.A, N.S.W and Vic and all the tiles have only the company name on the title Company pty Ltd…. I also have an on line stock broking account in the company Pty Ltd name with out ATF family trust.
so don't worry when you quote your ABN or ACN the ATO will look this up and see its a family trust i.e company Pty Ltd ATF Family Trust….
You can check on this web site your own ABN and it will show you what the ATO will see when they search your company name.
http://www.abr.business.gov.au/(c1q2edbandoge345nu3lxjv5)/main.aspxP.S There is no double stamp duty payable… that's illogical and unlawful even if 10 people buy a share in the same property the stamp is not $XXX.00 x 10 people !
its divided buy 10 or in the case of a company trust by one as they are both one in the same entities…. think about it…do you and your wife pay the stamp duty twice if your tenants in common ? Ans: NO…you pay the same amount per property not per person ….
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