Forum Replies Created
- Terryw wrote:Jacki wrote:
I can't help with any of the preceeding questions as am new to the game myself. However I have a question regarding unit trusts and potential dangers when splitting units.
I have just a read a book that recommends (when negative gearing) issuing income units to the main income earner to gain maximum tax benefits from the loss and the capital units to the non (or low)-income earner so if you sell, minimum CGT applies. If this is a husband and wife, in the event of divorce (hopefully never happens), would setting up a trust this way leave the person with the capital units with the ownership of the property – or would the property still get split equally?
Thanks a lot for your help.
JackiHi Jacki
That book must be out of date now. It would not be possible for a set up like this to pass muster with the ATO as there would be no commercial reason for the unit hold to buy the units if they would not be entitled to the capital gain.
see http://law.ato.gov.au/atolaw/view.ht…/NAT/ATO/00001If it was set up like this, then the family law court could still look at the set up and divide the asset in a manner they think fair. They have the power to look behind companys and trusts.
I too read a book that was published in 2005 that said you can issue the income units to the higher income earner while the lower income earner with the capital units using the UT.
Terryw, the address you attached to that post isnt complete and includes the … in the address so could you please copy the full link because i am interested in that link. Thanks!
