negatively geared investments in family trust

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amz
Participant
@amz
Join Date: 2004
Post Count: 4
August 30, 2004 - 9:01 pm
This message has already been posted to help needed but I think this is the correct forum.
We have a few investment properties in a family trust. Overall the trust carries a loss and up to now we have transferred money into the the trust from our company. The transaction is shown as income administration to the trust and an administration expense to the company. However we have now been advised this the ato properly won’t accept this. Losses can be carried forward a 100 years but we would like to benefit today from depreciation and tax savings. Can anyone help.
Chee
Participant
@chee
Join Date: 2003
Post Count: 8
September 1, 2004 - 3:24 pm
HI THERE,
I HAVE A COUPLE OF SUGGESTIONS FOR YOU. FIRSTLY GO SEE A PROPERTY TAX EXPERT. I RECOMMEND CHRIS BATTEN (CHRISBATTEN.COM.AU).
I HAVE BEEN TO SEE HIM, HE HAS SET UP A HYBRID DISCRETIONARY TRUST. HE IS THE BEST IN THE BUSINESS.THIS STRUCTURE ENABLES ME TO CLAIM THE LOSS ON MY PERSONAL INCOME, IF I GET INTO A NEGATIVE GEARING SITUATION.
IF YOU ARE OPERATING AS A FAMILY TRUST OR JUST A DISCRETIONARY TRUST AS ITS COMMONLY REFFERED TOO, THEN YOU CANNOT CLAIM THE LOSS AGAINST YOUR INCOME FROM THE COMPANY OR ANY OTHER ENTITY WHETHER INDIVIDUAL E.T.C.
YOU SAID THAT YOU TRANSFER MONEY FROM YOUR COMPANY TO THE TRUST AS INCOME ADMINISTRATION? I’M NOT SURE WHAT THE PURPOSE OF THIS IS?ITS HARD FOR ME TO COMMENT AS I DO NOT REALLY KNOW HOW YOUR INVESTMENTS ARE STRUCTURED,BUT IF YOUR GOING TO PUT MONEY INTO THE TRUST, PERHAPS DO IT AS A COMPANY LOAN TO THE TRUST(WHICH IS AN EXPENSE) & PERHAPS PLOUGH SOME MONEY(IF YOU HAVE IT)TO MAKE THE NEGATIVE PROPERTIES POSITIVE.THEN LATER ON USE YOUR POSITIVE INCOME FROM THE FAMILY TRUST TO REPAY BACK THE LOAN TO THE COMPANY(TRUST EXPENSE & YOU ONLY PAY 30% TAX RATE ON THE INCOME).
ANOTHER SUGGESTION DON’T BUY ANYMORE PROPERTIES IN THIS FAMILY TRUST STRUCTURE UNLESS YOU KNOW THEY WILL MAKE MONEY FROM DAY ONE.
ANY OTHER QUESTIONS I WOULDBE PLEASED TO HELP
YOU CAN HAVE A PHONE CONFERENCE WITH CHRIS IF YOU ARE OUT OF SYDNEY, YOU WON’T REGRET IT
DAVID
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
September 2, 2004 - 2:00 am
I think I answered this question the otherday on your other post, but I just had another idea. Your trust could provide some sort of service to your company and charge an appropriate fee. This fee would then offset the losses from the properties and your company would reduce its tax in doing so.
From what I have seen and heard, Chris batten is very good, so you should definitely check out his site too.
Terryw
Discover Home Loans
North Sydney
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
FFComm
Member
@ffcomm
Join Date: 2004
Post Count: 627
September 3, 2004 - 3:33 pm
When buying negativly geared properties put them in Unit Trusts – Not family/disc. trusts. You will have to do some fancy foot work to get out of this one, so do check out Chris Battne.
Rgds.
Lucifer_au
NickM
Member
@nickm
Join Date: 2004
Post Count: 8
September 6, 2004 - 2:07 pm
A Hybrid Disc Trust is the most effective structure for negative geared property. Chris B will back me on that one.
amz, you need to justify why the company pays the trust. Depending on the activity of the company and the numbers involved, there may be some hope.
Rgds
NickM
www,strategicwealthmanagement.com.au