New to the site and have looked at the fabulous responses re this subject but need further advice.
I have set up a discretionary trust linked to a Pty Limited name (was originally for a business that did not take off). Anyway, I am now looking at buying an investment property through the trust. Seen previous advice about renting it from the trust. Questions are:
1. When applying for finance do I (as a Director), use the Pty Limited name or trust name as the purchaser?
2. Rent received (if I rent it out) payable to the Pty Limited?
3. If I live in it, pay the rent to the Pty Limited?
4. Claim -ve gearing through the trust?
Bit vague on what I can and not do with the trust, so would appreciate any advice. To my email address would be great. Live in the ACT.
Hi Cajun
When you say linked, do you mean the company is the trustee, or just a beneficiary?
1
It is usually the Trustee as Trustee for the trust.
eg the company X Pty Ltd as trustee for (ATF) the Smith Family Trust.2
Rent would be payable to the trustee or the trust.3
If you live in it, you would pay rent to the owner – the trustee of the trust.4
The trust can claim deductions for interest etc, but you cannot offset this against your perosnal income (unless a hybrid trust). So unless the trust has other income, it will probably run at a loss. This loss is not transferable, and can only be used to offset future income.BTW, I am not an accountant and don’t know what I am talking about!
Have you purchased the book, “Trust magic” yet?
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
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