Australian and USA would have a double tax agreement, so there would not be double taxing. Any income tax paid over there would be taken into account.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Trusts are worth looking at in my opinion. But don’t overkill. I have seen people spend thousands on elaborate structures to save tax, when they don’t make any money!.

A trust can cost as little as $137 to set up and nothing to run. If you are just buying properties, the tax return is easy, and you could do it yourself if necessary.

Trusts can be used for negative gearing. A hyrbid trust is used with units owned by the high income earner who then borrows to buy these units. The money isn’t gifted to the trust (otherwise you couldn’t claim the interest). These can cause more problems when borrowing if you have a company as trustee. Due to the fact the house will be in the company name, but the loan must be in the individual’s name.

There are many different types of trust such as service trusts, testamentary trusts, superannuation trusts etc. But the two main ones are unit and Discretionary. Unit trusts are not safe when it comes to asset protection as the units are owned and can therefore be at risk. Hybrid trusts are therefore not as safe as discretionay.

SG, get another opinion from a different accountant. Most do not understand trusts.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

I get these figs:
After 5 years, ppty worth $161,051
less purchase costs and selling cost = $51,220 capital gain

After CGT, this becomes a profit of $38,800.

The property would probably be cashflow neutral but negatively geared, so maybe a bit of tax would have been saved during this time as well. If rents increased with inflation, maybe a small profit would emerge.

So for a cash outlay of $nil, the person made $38,800 after tax in 5 years.

Not bad, but SIS made this in 6 months!

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Well done!

So have you finished the Advanced diploma now?

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

also consider http://www.gatherumgoss.com

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

I have seen a few clients do this, but only between spouses. It can be done when there is a court order, on separation – without stamp duty and CGT. In NSW and Vic, it is also possible for spouses to transfer to each other for $1 stamp duty. I don’t know, or think, it would be possible with other family members.

It can help when one of a couple has credit problems which would result in a much higher interest rate. A transfer is done into the person with the clean record. They then get the loan at normal rates.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Just think long term. Having properties in your husband’s name may save you a bit of tax now, but these properties will become positive geared eventually, and if he is on the top bracket…..half will disappear. Also what would happen if you had to sell one of these? He would have to wear the capital gain on top of other income. Having a trust can help minimise this.

Insurance is good, but what if you go bankrupt? Trust assets may be safe.

There are also estate planning benefits with a trust. this could save your estate CGT and stamp duty fees.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

The ATo can still slug you with CGT if they think you are in the busines of doing this. It would take then a while to realise this though!

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Principle Place of Residence.

The only way to avoid CGT is to make a house your PPOR. If you then move out and rent it, you can still claim it as your PPOR for up to 6 years. If you sell during this period it will be CGT free. You can only claim one PPOR (per couple), except for a period of 6 months when you may count two.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

I do not like country towns myself. Some people have made good capital growth (eg 100% over the past year) and good cashflow as well. However, good growth in recent years may mean no growth for many years to come.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]