Forum Replies Created
Also, If your employer agrees, you could salary sacrifice the expenses relating to the property, essentially giving you the deduction for the expenses while leaving the income in your wives name. The payment of the expenses would be an exempt fringe benefit using the otherwise deductible rule.
Hi Steve,
You mention you want to protect the assets from litigation and divorce etc.
If you have a fixed trust where you a with yourself as a fixed capital beneficiary, you have a real asset, and it would be at risk in litigation or divorce.
If you have a fixed trust with a family trust as a beneficiary the land tax would be assessed to the family trust being the beneficial owner, and the family trust is a special trust and not eligible for the threshold.
The benefit of the threshold may not be as significant as you think. If you already own half the property you inherited, you will have already used part of the threshold. The tax benefits on disposal of owning the property in the trust could outweigh the benefit of the threshold.
If you use a discretionary trust and make a loss, the loss is quarantined in the trust, but you must pass certain tests to be able to recoup the loss. One being the continuity of ownership test. Due to the nature of a discretionary trust it cant usually pass this test, the only way around it is to to make a family trust election, and this then has other implications.
While there is no obligation for any entity to use an accountant, you can see that there are many intricacies that most people would not be aware of, and the few hundred or even thousand dollars you might pay an accountant could be well worth your while.
Your cost base would be the market value of the land prior to the subdivision plus costs incurred in the subdivision and of course the construstion of the units, not the purchase value of the property.
You should seek advice based on you situation if the sale of the first unit would constitute a capital gain or assessable income. You may also be required to register for GST.
If the second unit was used as a PPOR you would be eligible for the main residents exemption.
You can lodge a complaint with their professional body (ICAA, CP, NIA). You should be able to find the contact details on the website of the relevant body.
There is also now a new national Tax Practitioners Board, which manages the registration of tax agents. Tax agents are now bound by a new code of conduct. They have a form on their website to make a complaint http://www.tpb.gov.au
Also, if you have copies of the incorrect deeds, they will most probably have details on the front cover of who prepared them, as most accountants outsource the preparation of deeds. You could then contact the supplier of the deeds directly, tell them what has happened and request they send you a copy directly.
If your still looking for an accountant, i can recommend some in either Sydney or Newcastle. Let me know if you want a recommendation.
David
Pesa,
Click on my name and view public profile.
You can send an email from there.
David
Hi Pesa,
You cant really access the equity in a property the fund already owns without taking the propert out of the superannuation environment. Super funds can borrow in limited circumstances, however it has to be to acquire an asset, it cant borrow against an asset already owned by the fund.
If that is your intention, there are some strategies you could put in place depending on your situation.
If you want to give me some more details about your situation Id be happy to help.
You can send me a private message if you dont want all your details on the forum.
ps. Don't appologise for questions, thats what the forum is here for.
David
Hi Pesa,
You are correct that you could not live in the property if it was owned by the super fund. However the income would be tax free if you were drawing a pension. The property could be later transferred out of the fund if you wanted to live in it, but you have to consider the stamp duty on this transfer.
In making the decision you need to consider your other income and assets. If this property will be your only asset, and you will be relying on the income, you may be best just to buy it in your own names.
You should also look at land tax depending which state you are in.
Hope this helps, let me know if i can help further.
David
As long as the rent is paid on an arms length basis there shouldn't be any problems.
Make sure you consider the liquidity of the fund if it is 100% invested in property.
David
Hi Yasmina,
I know someone who gave it a go for a couple of months and didn’t get any income from it at all. Their loans were not very competitive which made them very difficult to sell. They also had a telemarketing department that set up his appointments, however he would regularly turn up to appointments with people who had received phone calls but didnt want anyone to come and see them.
I’d be very carefull if your going to be relying on this income.
DaveFrom what I’ve heard you can get some good prices with very good rents in the Moree area. Its an area that I’m seriously considering.
Could be worth a go.
Dave.
Hi Guys,
Rellie is right, the way it can be done is to setup a unit trust, and both the superfund and yourself buy units in the trust and the trust then buys the property.
The only problem is that the property must be unencumbered for the superfund to remain complying. ie you cant borrow against the property to fund your part.the only way it can be done is if you can pay cash for your share, or borrow using other properties you own as the security.
jcls79, you also need to consider the costs of a SMSF, including setup and ongoing accounting and audit etc. At 25 you probably dont have much money in super, and these costs might out weigh the benefits.
Hope this helps, if not send me an email and ill try to clarify.
