Hi All,
I am thinking of buying a property for 100k and sale it for 130k in 3-4 month after doing some work on it. I think after all the expenses there will be profit of 15k. Now do I have to pay tax on that $15k and then distribute the profit between beneficiaries or that 15k will go to trust and then all the expenses will occur to trust as normal and then profit will come.
I think CGT also should be treated as normal profit to trust. Am I right?
Cheers
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PropertyGuRuHi I think people don’t understand my post I try to clerify here again.
Ok it will be like that..
100K property
3k for stampduty etc
1k for legalLet’s say 10k for renovation that will become 114k then sell for 130k so profit about 16k – 2K( agent commision) = 14k profit.
Hope this all be done in 3 months.
Ok now about trust. it’s family trust with normal trustee (2 of us) not company.
Now I want to know if this 14K CGT will be normal profit for trust or not?
let say I buy only this property in this trust in this year so profit will be 14k ( from this property) then I can show some expense in the trust lets say that will be 4k for full year so now profit is 10k will that be distributed between beneficiaries?
Am I thinking right?
Hope I clearify.
Cheers
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PropertyGuRui think you will find that the trust distributes profits. So any costs will be deducted from the gain and this profit will then be distributed to benenficiaries. The beneficiaries are then resposnible for paying any taxes.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terryw,
So CG also consider as normal profit in trust? If this is the case then CGT also can be reduced using trust. cool! [
]Thanks
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PropertyGuRuHi Guru
I read your post at 1 this morning, and decided to go to bed rather than answer it. I did understand your question though (I think).
As you will be buying and selling within 12 months, the CGT will just be treated as normal income, so can be offset by other expenses in the trust etc. Even if it is CGT (ie 12 months hold) you can still lower the income of the trust before distributing money (but check with your accountant BEFORE making any decisions)
Cheers
MelHey Mel,
My Post so boring that you have sleep after that. I think I should have posted in forum fun.[]I am still not sure but found out from some one who knows about tax etc that we have to distribute the CG to beneficiaries before showing any expences. Only way to reduce CGT is to distribute to right beneficiaries like kids etc but that sort of beneficiaries I don’t have [
]I think we don’t have enough experience person with accounts/tax in forum. I think there should be another area for accounts/tax questions along with what we have here.
Thanks for comments and please make comments if anyone know more about this.
Cheers
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PropertyGuRuNo Poltergeist, it was more along the lines of, I don’t think I am thinking that straight, and so don’t want to try to answer Poltergeist’s very important question until I am thinking clearly.
Re a tax and accounting area in the forum I was just thinking along the same lines myself, and going to suggest it in the Tell us what you think forum. It would be a really good idea as there are so many questions on tax, structures etc. etc. that it would save people a lot of searching to go straight there.
As for your situation, check out Dale Gatherum Goss’s book Trust Magic, or make an appointment to see him. He’s in Melbourne somewhere, and from all accounts is excellent.
Cheers
MelHi Mel,
Yes I have his both books and have finished reading but can’t get answer to this question but I will try to look again there.
I am in Sydney so can’t meet him. Yes I am looking for good accountant also here in sydney if any one knows please let me know yes I know mint group and all big one but I want some one who changes a bit less. With these people first thing is to take appointment is very hard and always take long time.
Cheers
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PropertyGuRu
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