Hi
Hubby was talking with a work mate who should have the same income but said it was much less through the use of a family trust. I understand how you can put assets in a trust but how does it lower your personal income? They work for the govt so it's not a company or business set up inside a trust.
Anyone have an idea?
We are going to see an accountant if we can work out how viable it is to move our assets. It woudln't really be if we can't lower his income though.
If your husband is a PAYG employee then very little chance to lower his income as his employer will not allow him to contract to them. With regards to your other assets transferring them into a Trust structure will incur Stamp Duty and possibly Capital Gains Tax so will depend on what the asset involves.
If he has a substantial share portfolio then it maybe worth considering (subject to the CGT position) depending on your income and whether you have any dependants.
I would always be careful taking advice from work colleagues and would suggest you wait to see what your Accountant has to say before taking action.
Richard Taylor | Australia's leading private lender
Thanks it didn't add up to either of us. We looked into Trusts 10 years ago and hubby was turned off then by the Stamp Duty costs (which are now higher). CGT for 2 of the properties isn't an issue as they have exemptions. Hubby also said the only way his income could be halved is he is making huges losses. Something we don't want. I'm leaning toward just selling the property anyway and buying shares maybe in a trust.
Thanks again, we'll see someone when hubby returns from trip.
If you are a contractor, or can arrange to be, then you could run a business thru a trust. There are a number of hurdles to overcome, but it is possible to do. The profit can possibly then be distributed to other family members and tax reduced.
Trusts only have $200 stamp duty to setup in NSW, none in QLD and WA now (I think). you would pay stamp duty on existing assets which are transfered and it is usually not worth doing (unless maybe you have a high non-deductible debt and equity in an investment), but look at buying any new property and shares in a DT.
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
Thanks Terry
No not a contractor, Defence which was why we couldn't understand how his friend has apparently halved his income.
I was reading somewhere that PPOR status is lost once you move into another home you own? So does that mean you retain that as your PPOR and not claim PPOR on the new propert? We are always moving due to job postings so we haven't sold yet. We are also in DHA rental atm but do plan to build on a block we've bought at our next location. We might have to sell the other place before we move in?
you can only claim one residence as your PPOR at any one time, but you can choose which one and this choice may only be need to be made in the year you sell one. So you would, probably, just choose the one with the biggest capital gain as your main residence.
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
Mumof5 wrote:Thanks TerryNo not a contractor, Defence which was why we couldn't understand how his friend has apparently halved his income.
I was reading somewhere that PPOR status is lost once you move into another home you own? So does that mean you retain that as your PPOR and not claim PPOR on the new propert? We are always moving due to job postings so we haven't sold yet. We are also in DHA rental atm but do plan to build on a block we've bought at our next location. We might have to sell the other place before we move in?
You generally have 6 months to treat both dwellings as your main residence when you are changing over (section 118-140 Income Tax Assessment Act 1997). There are a couple of conditions to satisfy but this section may solve your problem.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
