Hi guys, some advice needed on a nine acre property owned by our discretionary trust, (the property put into the trust on advice about asset protection), area is currently up for re-zoning should go res1 which should increase its value. The problem is that our accountant suggested it maybe better for it to be in our personal names as we may build our ppor on part of the block and develop the rest. We are not clear on whether the problem is the mix of investor/personal ownership and the deductions that we have made or the cgt implications, we are also not keen on paying stamp duty again, a lot of $ unless we really need to. We initially purchased the block to build our own home on at some stage, the possibility of the re-zoning has seen us hang onto the block for 3.5yrs with the view to develop the block as an investment. Our original accountant who raised the question has quit , the guy who took over our file has also just quit without getting us an answer (maybe its us),and the new new guy doesn't know anything about us or the query. We are wanting to re-finance but in the right name/structure asap. Long boring complicated question I know, any advice much appreciated.
Cheers BrenIf you are going to build a PPOR, then having it in the trust will mean paying extra land tax as well as CGT later. Transferring it to your individual name now may save heaps of CGT later as well as ongoing land tax, so it may be worth paying the Stamp Duty and CGT to do it now.
But…….. What are your long term intentions? You may be better off keeping it in the trust if you are only going to be living there a few years. There is also the possiblity that you may have another property which you could claim as your main residence while renting it out, and still get the CGT exemption on this property. And if the new house is owned by a trust, you may be able rent it and claim various deductions which you otherwise would not be able to claim. But to do this you have to be careful.
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
If everyone at your current accountancy firm is jumping ship, do likewise.
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