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In answer to KennyC…”how long is a piece of string”. Accountants generally charge out their time in anything from 6-15 minute intervals at anything from $90/hour upwards.
The better your records the less it should cost you, provided of course that it all makes sense to your accountant. Often what is perfectly logical to you, makes absolutely no sense at all to anyone else.
If you provide you accountant with a shoe box (it does happen and in even bigger boxes than that) it will cost you for their time to sort it all out. So the more you do yourself and the more logical and easy it is to understand the less time it should take you accountant to do the job.
If in doubt ask for an estimate/quote and why not ask for references…a good accountant should be happy to provide you with the name of a client you can talk to I would imagine.
I have clients who have the following structure
A company which acts as the corporate trustee for both a discretionary trust and a unit trust. The discretionary trust is the holder of the units in the unit trust. For every new property they purchase they set up a new unit trust. Obviously they “re-use” unit trusts when they sell off a property.
This set up give you pretty good asset protection.
There are quite a few different types of trust:-
1. Discretionary Trust
2. Unit Trust
3. Testamentary Trust
4. Bloodline Trust, and
5. Hybrid Trust.The difference between a discretionary trust and a unit trust is that the trustee of a discretionary trust has the “discretion” to distribute profits to beneficiaries in any ratio he/she/it sees fit..hence the term discretionary trust. The trustee has to distribute in line with what the “Trust Deed” allows.
A unit trust also has a trustee, however the trustee can only distribute profit in line with the way the units are held. For example if a unit trust was set up with 10 units and Mrs A has 5 and Mr B has 5 then the trustee must distribute any profit from the unit trust 50-50 between the unit holder, being Mrs A and Mr B.
A testamentary trust is a trust that you prepare – as in have a deed drawn up – before you die, normally when you have your will drawn up and the trust comes into force upon your death. They are normally (to the best of my knowledge) used as a form of asset protection for the beneficiaries of an estate.
A bloodline trust can be used as a testamentary trust or stand alone. The idea behind a bloodline trust is that profits derived within the trust can only be distributed to blood relatives ie. son, daughter, grandson, granddaughter etc.
A hybrid trust is a mixture of a discretionary trust and a unit trust. There would be a number of units issued which represent a % of the trust and the balance would be discretionary. I gather these are becoming popular.
I don’t know about Accountants, who to recommend and who you can trust. Accountants, like Solicitors make their money by selling their time. I have seen trust deeds drawn up by accountants that have caused no end of grief. Some accountants will have a template trust deed which they will use for everyone. Others will buy on line (find a copy of a CPA magazine and you’ll find half a dozen suppliers of trusts and companies).
There is a firm of Solicitors in Brisbane – Cleary & Hoare – who specialise in trusts and asset protection (commercial law). They have all their deeds checked over by a QC and are utterly up to date with tax law etc. They have a “Legal Resources Club” which you could enquire about.
There is a Trust Law Act in Queensland which governs what you can and cannot do with and in a trust deed…I would imagine that each State would have similar legislation.
Does this shed any light on the topic for you.
Thanks for the suggestions. Chris Maleny is lovely but way too many tourists for the locals (that’s me I guess). We thought about putting cabins in for the tourists but access to the back of our property is a bit tricky…unless the tourist feels like hiking it and having no power when they get there.
We (I) figures that putting at least one other house on the property allows us to stay where we love it…..only three houses on our dead end street….and both keep an eye on the rental and be available for maintenance etc…not to mention doing a roaring trade in firewood in our cold winters.
I also thought that it was better to develop what we have now with a view to getting some additional income going before taking a quantum leap into anything else.
Thanks for the input. Yes we can build another dwelling on the property. When I say “Cattle” it’s a bit of a joke really, 65 acres can feed about 11 head – but like most of Aust, no rain no feed. The cattle are more like glorified lawn mowers with a twice a year kill for the freezer.
There is an acute shortage of rental properties in my area. We are 12km out of a major tourist town on the Sunshine Coast hinterland.
I’d expect to be looking at in the vicinity of $60,000 to $100,000 (being extravagant) to build and yes we will have to pull money from somewhere.
The line of credit we presently have was negotiated in February 2003 just before our area went nuts. Nothing lasts up here longer than a week….as in vendor puts property on the market and within 7 days it’s under contract.
So if we borrow another say max $100,000 that takes total debt on property up to $282,000 and we rent the existing house for $350 per week.
I see this “11 second rule” being spoken of but I don’t know what it is. Am waiting with baited breath for Steve’s book to come out to me.
I see a few people have read this…but could someone please give me some advice. Is this a good idea or not.[?][?][?][?][?][?][?][?][?]
When I said can’t just “not settle”, I meant you can’t just decide you aren’t going to go ahead with the settlement ie you need a reason as in a clause of the contract hasn’t been met. I’m in QLD so I’m not familiar with Property Law in other states. I am aware that contracts often go past the stated settlement date on the contract, however this usually occurs with the agreement of both vendor and purchaser ie the purchaser requires additional time to organise finance and asks the vendor for an extension to settlement date to achieve same.
I agree with the whole either he coughs up what you’re asking for in rent or he provides vacant possession on settlement. Now that you know there is a clause to that effect in the contract you have some leverage with the vendor. Either he agrees to the rent you want or he provides vacant possession. If he won’t pay the rent and won’t vacate you can have him for breach of contract. Still gets back to the same thing…talk to you solicitor.
No one likes confrontation but no one likes to be taken advantage of either. Bottom line is the vendor is just as responsible for doing his own due diligence on rents payable in the area as you were to come up with the figure you are asking. You’ve done your homework, I can’t see why the vendor doesn’t do his/her homework.
You’ve got three weeks to sort this out to your advantage. If you don’t want to appear to be the rat in the wood pile with the vendor, talk to your solicitor and get him to draft you a letter to the effect that the rent you are requesting is figure $x etc.
You can’t just “not settle”, especially if the contract is unconditional. Getting him to drop the price on the deal by the difference in the rent is not a bad idea, however, you’d probably be stuck drawing up a new contract as this will effect the stamp duty etc.
Whats that old “legal” phrase they teach in every legal studies course – Offer, Acceptance and Consideration….your verbal agreement possibly isn’t worth much, its the contract that has standing and the contract doesn’t allow for the vendor to rent the property.
The vendor in my mind has one of two options:
1. Pay the rent you are asking
2. Give vacant possession on settlement.If you can get him to agree to pay you back the difference in the rent he wants to pay and the rent you want to charge over the 12 months period then great…however, given his comments “two kids, wife not working”, I think you won’t have any luck.
Talk to your solicitor. I would be looking to enforce vacant possession on settlement, but I think you need some legal advice. If you had a clause in the purchase contract regarding the rent stipulating an amount then you would have no problems….other than getting the money out of the man…but you would have had the option to sue him for breach of contract if he didn’t cough up.
I can’t help you much here. I think you need to talk to your solicitor fast.[
][]What does your contract to purchase say. You should have a clause in it stipulating the rent to be paid and the fact that the vendor would be renting the property for a 12 month period after settlement.
Go back and look at your contract. If you have no clauses in there to effect the rental to the vendor, the vacant possession on settlement. He has to be reasonable and you’re not running a charity. How does he feel about paying $150.00 rent for his “portion” of the property and you rent the remainder to somebody else!!!
[:X]How sad is society that a 94 year old lady with one remaining relative is stuck in this situation. I feel for the guy/girl who own the unit. Pity the relative isn’t thinking long term, as in one day I may be this old and would I want my only remaining relative to be shutting the door in my face.
The suggestions put forward of you moving in with the elderly lady have some merit, but could also open you up to all sorts of other problems. For example, you wouldn’t want the media doing a beat up (on the relatives say so) that you were abusing this old ladies privacy etc etc etc. There are a lot of angles to consider here.
If the property is being kept clean and tidy and the rent is being paid, write off the $7000 and call it one of life’s little lessons.
Is this elderly lady capable of understanding what she has signed in the past and what her circumstances are now. Perhaps she doesn’t have any legal capacity – you need to talk to a lawyer/solicitor.
Sit the remaining relative down with a solicitor and have a friendly but firm chat about the situation. Alternatively, seek a compromise with the relative and work together towards finding the lady either alternative accommodation or a position in a nursing home.
[:X]PPOR are exempt from CGT. You can have your PPOR on up to 2 hectares of land and the whole lot is CGT free. If your PPR is on 2 hectares or more then the house and 2 hectares is CGT free and the rest of the land will trigger CGT. If you have a PPR and move out of it and rent it you have a 6 year window in which to still get the house CGT free as your PPR – however, you cannot have another PPR in that period. The ATO don’t actually seem to have anything that says what constitutes a PPR.[?][?] I’d be very interested to hear from anyone who knows of an ATO Ruling which clarifies the issue of what constitutes a PPR – other than the standard information relating to the suitability of the structure for human habitation.
[:X]My understanding is that the CGT 50% discount applies on assets held for 12 months or longer. You’ll need to confirm with the ATO what the cost base date will be, ie will it be the date you bought the original old home/land. There is a CGT legal advice line at the ATO which I believe is available for tax agents…perhaps you can wrangle some information out of them.
quote:
From the ATO website they mention that CGT exemption does not apply where a new asset has been created.
I have bought an old home, knocked it down and put up 3 units. If I hold the three units for one year does the ATO ruling mean I will not be able to get the 50% CGT exemption?
Thanks
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