Hi
First rule – never mention tax minimisation as the reason for doing anything!
Second – are you borrowing to fund the purchase? Any tax losses (negative gearing) in the trust will be locked in – can't distribute losses to offset other income.
Third – youcan't funnel employee income through a trust – however if you are in business and have a dicretionary family trust running the business you may be able to distribute income through the second investment discretionary trust to soak up tax losses.
You NEED to seek professional advice as to why a trust structure could be beneficial – usually to protect the investments from being attacked by creditors of a business etc.
Hope this helps but don't rely on this – pay for some professional advice!
We are not in bussiness nor are we borrowing. We would just like to make the most of what we have got! So employee income cannt be funneled in a trust that is what i suspected. However there is still another 40,000 or so in investment income. Can this be funneled through a trust?
We will seek professional advice
Stephen
Stephen
Yes it can be funneled through the Trust if the Asset is owned by the Trust.
Where are you based ? Might be able to recommend a couple of professionals in the area.
Richard Taylor | Australia's leading private lender
Hello Qlds007
We are based in Canberra, ACT.
Thanks for your help it really is quite a broud world when it comes in finance!
Stephen
Hi Stephen
Not going to be much help to you after all in the ACT as dont have any colleagues down there.
If you ever want to shoot me an email though I am always happy to answer any questions you might have.
Richard Taylor | Australia's leading private lender
Depending on what sort of work the higher income earner is doing, he/she may be able to structure all or part of the work as a contractor and divert money into the trust that way. Careful planning is needed though as there are various rules to meet before this is allowed. Investment income is no problem but the shares/properties would need to be sold to the trust and there could be CGT and stamp duty implications. It may be a good time to sell shares as most have dropped considerably
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
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