Hi,

I would imagine that the new stamp duty would be due when the Instalment Sales Contract is signed.

That is, a wrapper would pay the normal stamp duty on purchase (calculated on the price at which they purchased the property), as well as the new stamp duty (calculated on the price they onsold the property at) – as long as their markup was 12% or greater. Essentially they are being double taxed at time of purchase.

Perhaps NSW wrappers will get creative and only markup properties by 11.9%, and charge a higher interest margin to avoid being double taxed at the start of the wrap??

Nick

Hi Bear,

The CGT is calculated based on the number of years you rented the place vs. lived in it. In your case since it would be 14 years as PPOR and 1 year as IP you would only pay CGT on 1/15 of the gain. Mind you its not as simply as that, you would need to get an accountant to work it out, however it would be roughly that amount.

-Nick

Hi Bear,

Can you explain where the loophole is, because I thought you had to have ‘entered into a contract for the purchase of a home’ to qualify – can 12 month year old kids enter into a contract to purchase a home?

I once spoke to an accountant who recommended I change my address with the RTA for a couple of weeks so I would qualify for the FHOG on an investment property. I decided this wasn’t the kind of person I wanted to work with.

I have no problem taking money from the government when its legitimate, but not when your own ethics are at stake.

-Nick

Saturday morning at 10am in Sydney on 2UE (AM 954) is Residex’s John Edwards with ‘Find Me a Home’ (www.findmeahome.com.au), where people can register to call up and John will assess the value of the home, and talk about the real estate market in that area, etc.

I have found it quite interesting
-Nick

I don’t think so…you can lease a property from your trust. But talk to your accountant

-Nick

Hey all,

I have enjoyed immensely reading this post.

I am the first uni student who is willing to admit it I’m studing Finance/Law. I also work part time in a Stockbroking firm and have previously worked in Banking. Currently studying property and trust law which sounds a lot more interesting than it is!

-Nick

Hi there,

Is that $1.05 million? Wow – well it depends on your attitude toward debt and how leveraged you want to be – if you used it for multiple property deposits then you certainly have the opportunity to make huge gains, but perhaps you could look at going for a 60 or 70% lvr on some higher capital growth properties (which might be +cf at this lvr too).

Or you could wrap and probably have enough to cover – what… 20 or 30 houses without any problem?

-Nick

Hi Michelle,

Welcome to the forum.

I’m sure you will find most of what you need to get started in Wealth Guardian… although it is unlikely anyone will tell you the “right” way to set up a trust because there isn’t one!

Broadly speaking there are three main types of trusts (that I am aware of):
a) Discretionary trusts
b) Unit trusts
c) Hybrid trusts (like a combination of a and b)

While there is some merit to hybrid trusts (negative gearing is still possible) Wealth Guardian and most +cf investors would recommend discretionary trusts as they are more flexible when it comes to income splitting.

Once you have decided on the type of trust you need to decide who will be trustee… the trustee can either be a individual(s) or company. Your decision here will usually involve looking at potential costs, and the asset protection benefits of both. The arguments for both are put forward in Wealth Guardian.

When you are starting out you really need to consider what your investing goals are going to be. There are many discussions regarding good accountants/solicitors in different parts of the country on this forum, so I would recommend doing a search and finding one to go meet with.

Hope this helps,

-Nick

Hi everyone,

Lots of questions…all which generally have the same answer, that is – depends on your investing goals!

Kristine:

quote:

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what is a CGT Event

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Put very simply, it’s caused by a change in legal ownership of an asset (shares, property…etc)

mcdeyess:

quote:

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Can I ask where your information was sourced?

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Wealth Guardian is a good starting point. I also recommend DaleGG’s “Trust Magic”…however a lot of my information is just from talking to accountants, reading websites, etc…

Hame:

quote:

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company structured trust gives continuity in that individual trust accounts become untidy if and when the appointed benificeries either die or move on

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true to a point. However it is pretty easy for the Appointor or a trust to sack the current trustee and appoint a new one. So as long as you have at least some family members under 60 you shouldn’t have a problem

madeinoz:

quote:

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Is it better investing through the trust or the company?

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Most people would agree trust, because it is likely that the company is also a beneficiary of the trust. If you only invest through the company you are effectively locking in a 30% tax rate, whereas if you invest through the trust with a company as a beneficiary you are only limiting your tax rate at 30%

Hope this helps,
-Nick

Hi Rob,

Make sure you have another reason for setting up a family trust other than to save tax – the ATO scrutinises people who don’t appear to have any other reason for it.

Maybe a better idea would be to distribute some of the trust’s income to yourself as well.

-Nick