Hi Terry,
I'm trying to target properties close to being neutral with reasonable hopes for longer term growth in the hopes that they will become positive cashflow in the near term; i.e. before inflation makes the carry forward loses worthless.

Just out of curiosity, since my wife and I earn approximately the same income (hence no benefit to directing trust income asymmetrically), and due to (recent?) changes to taxation of under 18s it doesn't make sense to direct trust income to the kids; is there any other benefit to the trust (aside from asset protection)?

Thanks for the help!
NE.

Hi Terry,
Thanks for your reply (and so quick too!). I figured I wasn't going to find something that bent both ways

Unfortunately both my wife and myself are full-time employees (no luck with self employment yet, though I am considering becoming a contractor in the near future (I'm a software engineer), so interesting that it may come into play). I do like the idea of on-leasing, quite elegant and creative.

Do you have any idea as to what popular structures people use to claim deductions for negatively geared property? Buying in both names seems to give us the best split for deductability, and CGT concession, but obviously puts all our property at risk. Companies and trusts from the sound of it won't permit losses to be passed on.

So do most negatively geared investors buy as an inividual/pair then to claim the deductions?

The only way I can see trusts working in a negatively geared scenario is for me as an individual to lend the trust the money to cover the shortfall (on 0% interest, assuming I can do that (don't know if arms-length principles need apply here)) then once the trust becomes positive geared, pay myself the money back (hence getting my money back without incurring tax since really it is just the repayment of debt) and the trust can then also claim the losses (i.e. carried forward losses from the previous years) against any residual positive gain? Is that a typical arrangement?

Also, say I sell the property owned by the trust before it becomes positively geared, i.e. to make a capital gain? Can I use the losses from the shorfalls to offset the capital gain? or is that not possible because the shortfalls are revenue in nature and the sale would be capital?

Thanks again for the prompt response, any insight you have into the above questions would be much appreciated.

Regards,
NE.