All Topics / Legal & Accounting / Any suggestions

Viewing 5 posts - 1 through 5 (of 5 total)
  • Profile photo of MTRMTR
    Participant
    @marisa
    Join Date: 2004
    Post Count: 663
    November 7, 2006 - 2:17 am

    Hi All
    Within the next 12 months we will be looking at building our dream home. We plan to hold our PPROP which we will develop (duplex site) in the future.

    This will only work for us if we can claim tax deductions on our new PPROP.

    My question is whether this is achievable via a trust, ie we rent it back and claim depreciation etc.

    Thanks

    (Hard work never killed anyone, buy hey why take a chance)

    Profile photo of Don NicolussiDon Nicolussi
    Participant
    @don
    Join Date: 2005
    Post Count: 1,086
    November 7, 2006 - 4:12 am

    that is an interesting one and the first thing that springs to mind is whether the transaction is arms length. there may be a tricky way to structure it – lets hope an accountant forum member reads your post and can give some general advice.

    http://www.cashflowproperties.co.nz

    Don Nicolussi | Property Fan
    Email Me | Phone Me

    Learning, having fun and doing it!

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    November 7, 2006 - 4:34 am

    I am no accountant, but believe this is possible. You have to be careful though. The ATO has been looking at these sorts of arrangements and can disallow them if they think you have entered the scheme with the dominant reason to save tax. Ways to make it stronger include:
    – Doing it for asset protection reasons
    – The trust holding other assets
    – Renting it to another family member (someone unrelated to the trust)

    But if you do this thing to watch out for include:
    – Losing the CGT free status of your home
    – Land tax on your home
    – Paying extra tax on the rent you pay your trust when the property becomes +ve geared
    – Extra accounting expenses
    – Trusts cannot distribute losses (so you may need a hybrid trust).

    Better talk to a very good accountant.

    Terryw
    Discover Home Loans
    Parramatta
    [email protected]
    Sign up to my mailing list.
    Just send me a blank email, with “subscribe” in subject line.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of MTRMTR
    Participant
    @marisa
    Join Date: 2004
    Post Count: 663
    November 7, 2006 - 4:38 am

    Hi DLPP
    I think this can be done as I met someone years ago who mentioned this structure, he was partner/CPA in a large accounting firm in Perth.

    It would be interesting to know if anyone has actually done this.

    (Hard work never killed anyone, buy hey why take a chance)

    Profile photo of MTRMTR
    Participant
    @marisa
    Join Date: 2004
    Post Count: 663
    November 7, 2006 - 4:55 am

    Hi Terry
    I am going to contact a girlfriend who has found this brilliant accounant and lawyer and hopefully they can help with this.

    Thanks, will keep everyone posted.

    (Hard work never killed anyone, buy hey why take a chance)

Viewing 5 posts - 1 through 5 (of 5 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.