Forum Replies Created
Hi Emma,
It's calculated on taxable income + reportable fringe benefits + reportable super contributions + investment losses.Quote:I have a family trusts which purchased an IP some time ago. This IP has some equity after refinance. I want this equity (borrowed $$ loan from bank) to distribute $50k to myself this financial year so that when I sell my subdivided lot next year I can claim that $50k distributed already. Assuming that I can sell the vacant lot for $200k.Hope this is a lot clearer.
.So you want $50k income this year and $150 next year? No, you can't do it. You can't record any profit on the sale of the land until you at least have a contract on the land.
You can access $50k from the trust, but it would be treated as a loan, rather than taxable income.
You will be taxed on your share of profit from the trust, not how much cash you actually receive from the trust.
I'm a bit late, but….
Pauk wrote:I am lobbying for:1. CGT on the PPOR at 20% if sold under 10 years. (exemptions for legit reason to move. ie work family health etc)
Not a bad idea, but would never fly politically. And why give exemptions? As soon as you do that, you open the system up to all sorts of rorting. It has to be either all or nothing.
Pauk wrote:2. Land tax of 1.5%, all property, no exemptions (pensioners and other low income groups can accrue this until the house is sold)As mentioned previously, 1.5% is a hell of a whack. It's ridiculously high. Again, if it's ok slug this tax, then everyone pays. Allowing exemptions makes it look like some are getting a break.
Pauk wrote:3. Death tax of 20% on estates over $1million.$1 million is ridiculously low. Someone dying with $1m of assets isn't rich, not today. One million ain't what it used to be.
Pauk wrote:4. No stamps.You want to discourage specul;ation, but cutting stamp duty would INCREASE speculation, wouldn't it? No SD and extra land tax, would encourage buying and flipping.
Pauk wrote:5. Family Assist Part S (Senior) – A pensioner can sell up and the proceeds remain asset test free for the pension, if they move into another shared home. The family/young couple (need not be related) would get the rent tax free aand a $5k grant from the govt. We can not end up with 32% of our homes as lone occupants. That is a disaster We are currently at 22%.So a young couple gets rent and $5k grant for taking in their grandmother? Not sure why this is necessary. If people want to live by themselves than that is their choice, and it's cheaper for elderly people to live at home. (if they are able) This law would require lots of administration, which is expensive.
Pauk wrote:6. NG on new builds only.Hmm. New homes have greater NG benefitrs than say, a ten year old home anyway.
Pauk wrote:7. GST to 20% and the tax free threshold for wage earners raised to $40k. Increase welfare payments accordingly.This would kill retail. It's unnecessary, and people on $40k should be paying some tax. Why should they get a complete free ride?
Pauk wrote:8. Rent increases no greater than CPI +2% by law. Natural disasters aand mining booms are creating hugh rental stress.Would Council Rates and water rates also be capped?
Pauk wrote:9. Marriage tax rebate. For marriages over 10 years a 3% reduction/rebate in PAYG tax.Why 10 years? Sounds like Howard era social policy disguised as tax policy. Here's a better idea. Couples can put in a 'couple' tax return, rather than two individuial returns.
Pauk wrote:10. For someone who emigrated away from OZ and has been away longer than 5 years, their HECS debt get cancelled on their permanent return.Not necessary. They pay for their education like everybody else. They don't get a reqard for coming home, as you've suggested, they actually get a reward for going away.
If you are planning to continue renting, and you are repairing the damage (as opposed to improving the property) then you can claim these costs as expenses.
elisey wrote:any recommendation for a great accountant really understand property and geuniely wants assist investors profolio and money position.
Taylor
Where are you located Taylor?
Hi Richard,
Agree with what you're saying, and the client in your example is entitled to ask, "If the strategy is so good, why aren't you doing it'.
With tax advice, I think a good accountant should know the possible deductions regardless of whether they are in investor or not.
However with other advice that an accountant may be asked, it does help to have some practical experience. Just thinking about it now, I have been asked about PM fees, areas to invest / avoid, buy in what name, etc.
I guess it gets back to the question of what the client wants from their accountant. .
Jamie M wrote:I read somewhere that there were 350 franchises. That is an awful lot, in a short period of time. It would be very hard to keep tabs on the business if it is growing at such a rate.
350 franchises at an average of about $50,000 (assuming earlier franchises cost less). Thats franchise fees of $17,500,000, not incuding ongoing franchise fees paid annually.
fredo_4305 wrote:Hi all I am in the processing of conducting a subdivision. What is the ruling on GST and new residential dwellings? Do you need to pay GST on the sale of the property or is this only the case if the sale of the property is your main source of income.Generally you would have to remit 1/11th of GST on the sale, or 1/11th of the margin if you use the margin scheme. You can also claim GST credits on expenses during the building process.
If you wish to use the margin scheme, it must be mentioned in the sales contract. See your accountant before you present a contract to sell.
Catalyst wrote:20).
My accountant needs to be property savvy. He/she needs to own property (a LOT) and know all the deductions I'm entitled to and how to get them.It's interesting, I've been seeing a bit of this lately. I'd argue a good accountant should know the deductions available whether they own property or not.
Neil Armstrong didn't demand that the engineers who built Apollo 11 had all been to the moon.
I hope they cut by 25 bp, but I think you might be right, Steve.
In relation to the tax benefits, travel to and from work is generally classified as private, and therefore not deductible. Do you have a home office, or do you have to transport tools / work equipment etc from home to work?
If you are in the 30% bracket, it probably wouldn't be worth it, uinless you are doing a large percentage of work kilometres.
As Terry touched on, the simple answer is that the capital loss will be trapped in the unit trust, as the unit trust was the owner of the properties.
If the trust is to be vested after the sale of the properties, this capital loss will disappear. If the unit trust continues operating, it has no assets, which could cause legal problems. (ie – what it is the trust holding in trust if there are no assets.)
It wouldn't matter if the loss was in a family trust or unit trust, it is trapped until you have a capital gain to offset the prior loss.
itsandrew wrote:Just wondering if reportable fringe benefits are included when calculating whether or not I am substantially self employed?Do you mean for the deductibility of personal superannuation contributions?
If it is for super deductions, your 'employment income' includes salary, plus Reportable Fring Benefits, plus Reportable Super (ie, super over and above the 9%).
property1234 wrote:I have heard that this 6 year period is renewed if you move back in. Is this correct and how long do you have to re-occupy the residence for?Yes, the six year clock is re-set if you move back in.
There is no set time that you have to move back for, but you have to be able to PROVE that you moved back in. You would need to change your address on your drivers license, get the utilities, phone connected, change your address with the bank etc.I personally like Hindmarsh Island, but see it more as a holidau home / short term rental area, rather than buy to rent.
It certainly looks better now than it did a few years ago, seeing as there is more water in the Murray. There also seems to be people moving into the area. I'd love to buy a holiday home / short term rental on Hindmarsh Island one day, but my wife isn't too keen on that idea.
So that will be the end of that discussion.
We own a unit in Hayborough (just outside Victor Harbor) and would love to buy another down in that part of the world.
You might need to check the document you have signed with the current property manager as a first step, to see if there is a notice period, or whether you have signed up with the current PM for a specific length of time.
Scott No Mates wrote:I am aware of one person who has a similar property to one of mine but is a corporate owner registered for gst, he can claim input credits but we must rent out at the same price. So we are treated differently for tax purposes. You may need a 3rd opinion.Residential rent is input taxed, which means that no input tax credits are paid on rent received, but no GST can be claimed on expenses related to the residential rental income.
eg – Management fees and repairs would most probably have a GST component, but no claim can be made for these GST credits as the expenses relate to residential rent, which is input taxed for GST.
Yes, you can claim the interest on both costs.
You can claim the expenses as long as you have the LOC, and the IP. There is no set date that they would have to be repaid by.
Is the rent going into the LOC, or are you making any interest / principal payments? The ATO may have an issue if you are not making any payments on the IP, and capitalising interest.
Terryw wrote:hi DanThanks for that.
There are a few groups out there promoting such a 'scheme' and I guess it is getting too popular now.
I think you're right, once the promoters get either too brazen or too large in number, then the ATO looks to put a halt to the schemes.
There are significant penalties for breaking the rules, so a knowledge of the major rules would be beneficial.
Time committments would depend on how many different investments you have in the fund, how many transactiosn you are performing and the work involved. If you areinvesting in Australian blue chip shares, and not buying and selling reguilarly, it doesn't take much time at all.
You would need about $150,000 in superanuation to make it worthwhile. Under this amount, the fees for preparing the accounts and having the fund audited would by more than the fees you would pay in a normal super fund.
