Colin,

But if you have the asset in your own name, I think you lose some flexibility. For example, if you’re the high income earner and have the asset in your own name for negative gearing, but later the asset becomes positively geared, then you really want it owned by someone else. I think with a trust it would be easier to get around that…[Read more]

Cata,

Originally posted by Cata:
There are many advantages ofa discretionary trust that are more flexible than a family trust
What do you mean by “family trust”? Is a discretionary trust not a family trust?

You do not need a hybrid trust to claim the intrest, there are some exelent stratagies for this using less complex structures
Can you give…[Read more]

Originally posted by Cata:
if you distribute funds to a minor(under 18) you will be taxed at 66% from dollar 1(no tax free threshold).
I believe minors can effectively receive up to $772 before they get taxed.

See:

http://www.ato.gov.au/individuals/content.asp?doc=/content/20046.htm

GP

MiniMogul,

Australia has specific tax laws that relate to Australian residents (ie. people) using foreign-resident (including NZ-resident) discretionary trusts and companies.

If someone is an Australian resident for tax purposes, and the trust or company is NZ-resident, that individual may still be taxed on the income of the trust or company…[Read more]

Coastymike,

Originally posted by coastymike:
The trust loss provisions do not relate to capital losses. These capital losses should be able to be carried forward and offset against any future capital gains made by the trust.
Thanks. That’s good news at least [].

Fortunately I don’t have any revenue losses to worry about right now. And the issue…[Read more]

Coastymike,

Originally posted by coastymike:
Trust losses will need to be carried forward but this is subject to a number of rules regarding the carrying forward of trust losses. If the trust has made a family trust election then the rules are a bit more relaxed but again their are pros and cons associated with a FTE.
May I ask a few questions to…[Read more]

Note though that a foreign-resident structure of itself does not exempt an Australian resident from being taxed on its profits in Australia.

GP

Originally posted by CastleDreamer:
it is possible to bring some of the losses home to Aus from a negative geared NZ property (the loss incurred if interest payments exceed income)
The budget removed foreign loss quarantining altogether, so any foreign losses can now be offset against other Australian income.

At least that’s how I understand it.

GP

What you can do with losses also depends on the structure the property is owned in, if any.

If it’s in a trust, then you can’t offset the losses against your own income or capital gains, as losses can’t be distributed from a trust.

There are also issues with carrying losses forward in a trust.

GP

Marianne,

Originally posted by Unicorn:
The idea of a coy as beneficiary is great, (other than its getting complicated), but worth it if you’re on the top marginal rate.
This sounds good at first glance, but there are issues to consider:

Once the funds are in the company then they’re company funds, with rather strict rules governing their use.…[Read more]

I’m no accountant either, but the only possible way that I can think of is if the company with the assets is a subsidiary of the other company, as rollover relief provisions may apply when transferring assets to a holding company – at least as far as CGT goes, not sure about stamp duty.

Otherwise not that I know of – and the shareholders being…[Read more]

Do a search on the forum for hybrid trusts. They’re unitised discretionary trusts and allow for the negative gearing of trust property against an individual’s income.

The properties in your own name should already be able to be negatively geared against your other income.

GP

Frankic,

You could try NickM here:

http://www.strategicwealth.com.au/

Basic setup costs are around the $1100 mark for a trust and $1500 for a trustee company.

GP

John,

If you’re considering using any sort of foreign entity, I’d recommend seeking advice from an Australian lawyer or accountant who has experience with foreign investment, as there are special tax rules regarding controlled foreign companies and trusts.

Cheers,
GP

Originally posted by jcls79:
In order to reduce my tax bill, I am currently purchasing properties in trust name but the loan is taken out in my name, as the corporate trustee being the gurantor (so to reduce my tax bill on salary)
Can you clarify a bit what you’re doing there? You are a director of the corporate trustee of your trust, and the loan…[Read more]

Originally posted by woodsman:
under a HDT, the discretionary nature of the trust allows any proceeds of any sale or income to be assigned as the trustee chooses
By my understanding, owning units provides a right to the income generated by that capital (not CG though). If the trustee decided not to honour that right, apart from any redress the…[Read more]

Do a search of the forum and you’ll find a lot of info on hybrid trusts.

In a nutshell though, an HDT allows negative gearing with the individual borrower (not necessarily the trustee) claiming the losses against their own income, and CG being discretionally distributed.

I think to transfer an existing property into a trust you’d be looking at…[Read more]

Originally posted by Grreg:
the trustee company can be a beneficiary
Although to me that seems to defeat the purpose of having a trustee company in the first place.

I think for asset protection reasons, and simplicity (ie. tax returns, etc), the idea normally is to have the trustee company do nothing (else) and own nothing.

GP

Originally posted by carlin:
You gave your charge for a company, but what’s your charge for an individual?
I believe those charges mentioned are for establishing a company and HDT. Most people don’t charge for establishing an individual [biggrin].

GP

Originally posted by zen1:
Do I need to specify how much units each beneficiaries will get. Will the income (rents/dividends) have to be distributed at the specified proportion each year?
To the best of my knowledge, yes and yes, although the latter has a “but”.

The units in an HDT or unit trust provide a fixed entitlement to income from the…[Read more]