For tax purposes, a trust is taken to be an entity in its own right. Therefore, even though the trustee is a company (or any other entity for that matter), the entity type of the trustee is irrelevant.The trust can pay personal expenses but beware of Division 7A issues – for instance, if the trust has made distributions to a corporate beneficiary…[Read more]

elkam wrote:
I wondered whether the situation had changed in the OZ tax world. Many  years ago I accepted a 2 year contract to work overseas and while I thought I would come back after that time more contracts followed , life happened and I haven't been an Oz resident  since.  When I left Australia I organised my affairs so that I would be a no…[Read more]

elkam wrote:
Hello eddiecI tried to find the sections you mentioned on the ATO site but got totally lost. Because of this I don't know if the situation changes for jc1979 if he is deemed to be a non resident for tax purposes. Does he still have to declare the income he earns in his country of residence (UK)  to offset against his Australian lo…[Read more]

The normal disclaimers apply:1. In your original post, you said, " I won't be earning any income during this period".2. I note that you are now saying you will be earning GBP15K pa.3. The negative gearing loss is $10K.4. Section 36-10 (ITAA 1997) deals with how a tax loss is calculated, ie, total deductions – total assessable income – net exempt…[Read more]

Subdivision 36-A of the Income Tax Assessment Act 1997.

Yes, you can – and for an indefinite period as well.Eddieeddiec@bigpond.net.au

Agreed with Richard.The standard instalment warrant arrangement costs at least $10K+.  Be very careful with JVs involving super funds – it may potentially breach the most basic "sole purpose test", which could render your fund non-complying. In which case, drastically adverse tax consequences will arise.

kev2008 wrote:
yeah i am planning on it, just doing what research i can aswell thanks for your help.

Let me know if you need any referrals.  Eddieeddiec@bigpond.net.au

A trust is a relationship – the trustee agrees to look after the trust assets for beneficiaries.  In a discretionary trust, the beneficiaries are usually not known until the trustee decides to make a distribution.  In tax though, a trust is an entity in its own right and in some ways, it is like a funnel – income goes in and comes out to b…[Read more]

nevwhite wrote:
Hi allI'm looking to get some details of a good property solicitor in Brisbane (I live North Brisbane) for conveyancing/contracts etc. Looking to do some lease options and hopefully, flips, minor developments and wraps. It would be good to have someone who specialises in this area to help me avoid potential pitfalls!CheersNev…[Read more]

KevA company is good to limit liability, so if you are buying the houses for development, as opposed to long term hold, it should do the job (you might even want to use a separate company for each project).  However, a company is not eligible for the 50% CGT discount when a property is eventually sold, so if you are holding the property as a long…[Read more]

Based on the limited facts, my understanding of the law is:1. If you become non-residents, you will still be subject to Australian tax on your Australian sourced income, ie, income from the Sydney property.2. However, if the property is being negatively geared, the loss created will sit there indefinitely to offset other future Australian sourced…[Read more]

In my view, a HDT could potentially  work but there are a few critical threshold issues that must be dealt with with caution, including:1. Valuation of the income units at redemption – The ATO may argue that these units have material value, given that they have been giving rise to a present and future income stream.2. Reasons for the trust – It…[Read more]

Very  broadly, you would want a discretionary trust to protect valuable assets that will grow in value.  The trust will cater to both tax and asset protection needs.A business should generally be run by a company because of liability risks.  The shares in the company may perhaps be owned by the trust (and your partner's own discretionary tr…[Read more]

AnthonyJF wrote:
Hi All,I came across and article on the net after investigating trust options etc and a particular company are offering a trust setup ideally suited for property investment. I was unsure of the exact etiquette about mentioning company names so I have left it out for now….if its ok I'll respond as to whom the company…[Read more]

And those children become exceptionally tax effective when they turn 18 and don't earn substantial income because they will be taxed as adults under the normal marginal tax rates!

Where are you based, Anthony? Also, the plan sounds good. I presume you will be maximising your borrowings in the trust to buy the property off you at market value.  There should not be any CGT (but duty will be payable) as the property has presumably been your main residence since its original acquisition. If the property is negatively geared in…[Read more]

corhig wrote:
This question is to any would-be accountants, or just knowledgeable trust people, regarding Unit trusts.I've recently read the Melvin & Chan book, How to legally reduce your Income Tax.  It explains the rules of a unit trust as below. Units are divided into Income & Capital* Income units can be allocated to husband (working)* Ca…[Read more]

robertsp wrote:
Advice welcome. If I was to buy a block of land and engage a builder to build a 2 Unit Duplex, will I be required to pay GST on the sale of the Units?.  I am an individual PAYE tax payer and not in the business of developing. 

The law looks at your intention, ie, whether you are buying a capital asset as a long term inv…[Read more]

Mumof5 wrote:
Thanks TerryNo not a contractor,  Defence which was why we couldn't understand how his friend has apparently halved his income.   I was reading somewhere that PPOR status is lost once you move into another home you own?  So does that mean you retain that as your PPOR and not claim PPOR on the new propert?  We are always moving due…[Read more]