1. Yes, feel free to email me.2. Upon becoming an Australian tax resident, there are various tax implications, eg, the market value of any CGT assets you own will become their cost base for Australian tax purposes.  It is usually unlikely that double tax will apply because of the Double Tax Agreement between Australia and the UK.  The DTA u…[Read more]

I think you've got the idea.  1. P&L gets closed off to the beneficiary accounts as "share of profit", based on how the amounts have been distributed to each beneficiary.2. When real cash is paid, the payment will simply be coded to the beneficiary accounts as "drawings".Each beneficiary will pay tax on their share of the taxable income of the…[Read more]

Terryw wrote:

Dan42 wrote:

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…[Read more]

Terryw wrote:
CRJI think CGT would be payable on the value of the shares transfered – but you raise an interesting point. What happens if the company sells one property?

Yes, CGT will apply to the sale of the shares, in which case, provided that the shares have been held for at least 12 months, the 50% discount may apply.  If the company sells…[Read more]

jxuereb wrote:
Hey guys,Getting my head around trust structures. In the Accounting books what are the entries for the distribution at the end of the financial year? I know they are paper entries but I'd like to see what the double entries look like. Can't seem to find an example in my books or online.When its a company the profit gets closed off…[Read more]

The main residence exemption applies to a "dwelling", which is defined to include "any land immediately under the unit of accommodation". However, generally speaking, a "unit of accommodation" must be a building, a caravan, houseboat, or other mobile home.  Therefore, unless your partner had lived on the vacant land in a dwelling as described, my…[Read more]

I agree with Terry – a trust probably provides the best asset protection outcome for rental properties but be careful with the tax residency status of the trust – generally, if the trustee is not an Australian tax resident, the trust will be a non-resident for Australian tax purposes and that will pose Australian, as well as NZ tax issues.  Also,…[Read more]

PosEnterprises wrote:
Thats interesting Richard because it seems that Chan & Naylor like to push the field of Trusts. So what structure are accountants recommending then for asset protection and interest deductiblity? Any accountants care to give their thoughts. I am glad that their are finance brokers here saying that finance is the first field…[Read more]

grasshopperinvestorJust a brief caveat – be careful with what you are doing with that letter saying you went into the arrangement solely for tax purposes – the tax law contains a general anti-avoidance provision (Part IVA) which empowers the Commissioner of Taxation to unravel an arrangement where the dominant purpose of entering into the…[Read more]

It's also quite expensive, as I gather, because the "instalment warrant" (code for borrowing by super funds to buy property) rules are reasonably new and exotic. The last time I look, the lawyers were charging something like $8K to set one up.Eddieeddiec@bigpond.net.au

Terryw wrote:
Trusts can negative gear – losses from an investment property can be offset by other trust income, but you cannot offset personal income. This shouldn't be a problem with being self employed.I would urge you not to buy in the same entity as your business. If you do, then you will be exposing the house to creditors if your business…[Read more]

Hi DaveLOL, fortunately or unfortunately, depending on how one sees it, no. That wasn't me but I do know who you are referring to though.  If I have time to publish books, I would have preferred to write anything other than tax since I am immersed in it every day!Eddieeddiec@bigpond.net.au

Need to see a lawyer, M, and if the lawyer is not tax savvy, need to get the lawyer to do this in conjunction with a tax accountant. A change in the terms of a trust may potentially give rise to a trust resettlement, which may, in taxation terms, cause the deemed disposal of all assets of the trust and give rise to capital gains tax, stamp duty,…[Read more]

BamdamI am relaying info here. Don't quote me. Heard the arrangement from a lawyers' presentation.  The general idea is – you gift cash equating the equity you have in the property to the trust.  No CGT or duty because it is only cash (not property).  The trust then loans you back the funds by taking a second mortgages over the property – ag…[Read more]

Probably not worth the paperwork shuffle. However, as an idea, if you have kids, get them to mow the lawn, clean the properties, etc, so you could soak up their low tax brackets.  Not a lot of dollars here but may still be worthwhile.Eddieeddiec@bigpond.net.au

Hi GraceThe term "adjustment period" refers to, very broadly, the time period one needs to monitor the change of use of an asset to make adjustments for the GST previously claimed (or not claimed) when it was originally purchased.  For properties, the general time period you have to monitor the use of the property is 10 years.  Therefore, if you c…[Read more]

GraceThe previous view adopted by the tax office was that you had to pay back the GST on the construction costs.However, there has been a recent change – The ATO now accepts that where the developer continues to actively market the property as being available for sale, at the same time that it leases the premises, the developer is only required to…[Read more]

Shoot me an email, Dave. I can give you some referrals.Eddieeddiec@bigpond.net.au

DaveYour accountant is probably right.  To get the negative gearing benefit, the property needs to be held by a high income earning individual, unless you can get income into a trust to utilise the negative gearing loss.  The issue with holding the property in an individual's name is the lack of asset protection, which would have been safer if t…[Read more]

SteveMcKnight wrote:
There are definitely benefits of further education, and both the CA and CPA programs offer the opportunity to sharpen your accounting skills.I'm a CA, and even though I don't work in the industry as such any more, the ability to think through a financial issue in a logical and probelm solving manner is of great help.Gaining…[Read more]