Hello,
I am about to start an IP Portfolio with some other family members. I have read a number of forums to date on the different types of trusts and believe that based on the different individuals involved in our situation that a DT is more than likely the way to go. My question is given that we will not be investing in our home state (currently reside in Perth) for some time initially, does it matter where our trust is actually set up? Any help on this matter would be appreciated, in addition any suggestions on a good account that can assist on this matter would be helpful?
Regards
Willishome5
Hi Will
You say you are buying with other family members so i would have assumed a Unit Trust structure may have been more appropriate depending on the reasons for buying and the type of property you are going to acquire i.e negative or positive geared.
In relation to the State in which the Trust is establish this makes no difference at all. When it comes to Land Tax this is calculated on the unimproved value of the property and charged by the State Govt in which the property is located and not where the Trustees are based.
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Richard Taylor
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Trusts usually have a clause in the deed about which state laws they are governed by. I am looking at a deed now and it he governing law depends upon which state the trustee resides in, or where its registered office is (if company). Other deeds specifically name the state.
Other issues are stamp duty. Most states charge $200 stamp duty on the establishment of the trust. In QLD this is $nil!.
Terryw
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Thanks for the feedback.
Another related question I have on Trusts is if a member of the trust were to purchase a PPOR in their own name (first time), and hence be eligible for the FHOG, would there be any ramifications on the Trust taking ownership of the property after one year of the date that the original contract had been signed?
I realise that there would be implications around CGT and stamp duty on behalf of the trust, I am more interested in the implications imposed on the original owner?
Any feedback would be appreciated.
Regards
Willis
Are you asking what the implications are for a beneficiary of the trust to transfer a house they own to a trust?
I think this would be a straight sale with no unusual implications. It would be just like selling to a third party.
Terryw
Discover Home Loans
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Thanks Terry that is exactly what I was asking.
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