Hi Lance,Yes, the beneficiaries and trustees are two separate things. If you distribute to a large number of cousins, nephews, nieces etc, the trust then owes this money to the beneficiaries. You could then enter into an arrangement for the beneficiary to gift back their distribution, but it can be a dangerous path to take. It depends on how well…[Read more]

Hi Lance,You can still distribute to the company, even after making a family trust election, as long as the company is controlled by the members of the family group. eg, if you and your partner were the directors and shareholders of the company, you would be fine.It would be best to set the beneficiary group as wide as possible, then you don't…[Read more]

freelance2020 wrote:
It was my understanding that Discretionary Trusts can nominate multiple Trustee's, so that would include family members, my partner, myself and a company. As long as I have nominated properly I should be able to alternate between beneficiaries at my discretion.

Hi Lance,The trust can nominate as many beneficiaries as it…[Read more]

Scamp wrote:
How does a 22-year old get their hands on 400.000 dollars of debt ?Sorry but there's something really wrong about that picture. Whoever gave you that amount of money should be sued for child cruelty.And YOU should know better than to get a 400.000 dollar mortgage !!

He said he paid $400k for the property, not a $400k mortgage. He…[Read more]

Bravo. What annoys me is the condescending nature of the 'world is ending' posters. According to them, they are right and everyone else is an idiot. If they have that opinion, fine, but please respect the rights of others to have differing opinions.

Scamp wrote:
I was looking for my previous posts , only to find that they all got deleted.A shame, because there was some very interesting reading and warnings in there, also some nice replies from people. It was titled something like "Do not invest now, the property market is crashing" and was posted about a year ago.I wonder why an investment…[Read more]

Don't listen to the 'prophets' who have predicted a 50% loss of value in median prices. There are plenty of areas where growth is predicted for the 2009 year. See Fridays Fin Review. Like you say, yields are high an interest rates are low, and you can get good growth in some areas. Just do your homework before investing. And pay no attention to…[Read more]

M3,How do you know it's making money? If the owner is showing a loss to avoid paying tax, why do you think he is being honest with you? If you are keen, you could get your accountant to do some sort of audit on the figures supplied by the owner. If the owner is keen to sell, he should allow the audit. If he doesn't, then you know something is up.…

Depreciation – It depends on the cost of construction, how old the building is and what can be depreciated inside the building (stove, air conditioner etc). You can get a decent report done for $400 – $500Stamp Duty – Different states have different formula for calulating S/D. In SA the govt has a stamp duty calculator on one of its websites, I'm…[Read more]

Generally, you can offset capital gains against revenue losses.

Hi Belinda,One thing you can do is engage a quantity surveyor to assess the items in the house that can be depreciated. Also, keep a record of the kilometres travelled to and from the investment property.

Just to clarify, the 6 year exemption is ONLY available if you do not buy another PPOR in that time. You can only claim one house as your main residence at a time. Like WJ says, you can rent it out anyway you want, it has no bearing on the CGT rules.

The deductions are reduced by the amount of time the property is not available for rent. In your example, the deductions would be reduced by your private use amount of 2 weeks use/52 weeks, or 3.8%.

dirty sanchez wrote:
even when i can redraw from the loan at a click of a button ?

Yes, because the test for deductibility of interest is, what were the borrowed funds used for? As, in your example, they would be used for a new PPOR, the interest on the redraw would not be deductible.

Paul,My question is, what are the funds from the LOC being used for? Is all of the $200k from this loan to be used for the IP?

Hi Terry,You've got me thinking now! We have completed trust tax returns for clients with a rental loss and capital gain, and it was fine to offset the income loss against the gain. You couldn't stream the income, eg give the gains to someone and the revenue loss to someone else. As long as the beneficiary received an overall amount of…[Read more]

Terryw wrote:
Hi Daniel$8,000 per year is a big loss!Did you know that CG cannot be offset by income losses? I have never had an income loss so am not too sure how it works, but this is something you should discuss with an accountant.What I think it means is, using your above example, you will have to distribute the $120k capital gain and still…[Read more]

keiko wrote:
Hi if a house that i live in i sold in 12 to 24 months of purchasing so i dont pay capital gains tax and i keep doing this every 12 to 24 months of purchasing the next property i live in, And lets say iam paying 6% interest. And lets say over 10 years ive owned and sold 7 property's that i have lived in and i did not pay capital…[Read more]

Just in response to Terry's comments, the administration costs of running a DFT are higher than if you were to purchase the propertiy in your own name. A discretionary trust requires minutes, and generally financial statements are prepared by the accountant as well. For one property it wouldn't cost much more, but it would be more.

Daniel,Did she mention the problems with HDT's and the ATO taxpayer alert? This is the main reason accountants are steering their clients away from Hybrid Trusts. I'm not sure of how she worked out the amount, but the running costs of a DFT are higher, expecially if you have a corporate trustee, due to the ASIC fee, preparationof minutes,…[Read more]