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  • Profile photo of going_for_goldgoing_for_gold
    Participant
    @spookypatooky
    Join Date: 2016
    Post Count: 6
    June 13, 2016 - 5:41 am

    Centrelink have assessed the gift, including deeming, apparently. I’m unsure about the control test side of things though.

    She hasn’t gifted all her money away, she just doesn’t own property anymore. We did get advice, although seemingly it wasn’t great advice after getting more information from you in this thread. We’ll find a new solicitor I think, and work through it all before going any further with the above.

    Thanks for your help/suggestions.

    Profile photo of going_for_goldgoing_for_gold
    Participant
    @spookypatooky
    Join Date: 2016
    Post Count: 6
    June 12, 2016 - 4:04 pm

    Sorry, forgot to answer your last question. Mum doesn’t want to own property in her own name now as she ages, as she has been scammed and lost money, and also had a new “partner” take advantage of her after her husband died.

    Profile photo of going_for_goldgoing_for_gold
    Participant
    @spookypatooky
    Join Date: 2016
    Post Count: 6
    June 12, 2016 - 3:57 pm

    Yes, Mum contributed to the first trust. She gifted money to the trust, which she declared to Centrelink and it has been assessed in her pension. This first trust just holds cash. The second trust was established to buy the property.

    By the sound of it, as you suggested at the beginning, it would be best to have her pay market rate rent, then all expenses can be claimed. Also, if paying market rate rent, she isn’t receiving a benefit of the trust over other beneficiaries, she is purely a “tenant”. Would that work?

    Profile photo of going_for_goldgoing_for_gold
    Participant
    @spookypatooky
    Join Date: 2016
    Post Count: 6
    June 12, 2016 - 5:48 am

    I am appointor/director/beneficiary of the trust that made the gift. My solicitor told me that we could do it this way, or make it a loan from one trust to the other. The money was gifted expressly to purchase the property. Neither my solicitor or accountant mentioned anything about perpetuities! The vesting date of the second trust is more than 80 years after the first but according to the deed can be brought forward.

    If the gifting is a problem, could we have a simple loan agreement (not a mortgage) drawn up between the two trusts?

    So, if Mum pays below market rent, she is receiving a benefit, and no expenses spend on the property would be claimable? Is that right?

    What could the pension issues be? What do they depend on?

    Thanks again.

    Profile photo of going_for_goldgoing_for_gold
    Participant
    @spookypatooky
    Join Date: 2016
    Post Count: 6
    June 11, 2016 - 9:08 am

    Hi Terry,

    Thanks for your reply.

    The trust deed refers to many eligible beneficiaries, including “the parents of a named beneficiary”. The deed doesn’t refer to the property specifically, or anyone living in a trust asset. I imagine though, based on the above, that Mum living in the property would be seen as her receiving a benefit, is that correct?

    There is no mortgage on the property, it was purchased with cash. The money was gifted from another trust. The trust would need to use money gifted from the other trust to pay for the shortfall in income. The trust would effectively be making a loss.

    We could put a lease in place (Mum wouldn’t mind) if this is the best option, and have her pay a “bond”.

    Yes, I’m unsure of any impact this may have on her age pension. If she were to pay market rent, and we gifted her money back, I believe that would be seen by Centrelink as her receiving income.

    I spoke to my solicitor about all this before setting up the trust, however he only suggested speaking to an accountant. The accountant said that the only issue would be that, as you mentioned, deductions could be limited to rent received. I need to find out more before proceeding any further.

    Thanks again.

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