Hi All,
I'm looking at setting up a discretionary or unit trust for a property that my brother and I just purchased. I'm just after some further clarification for some questions I still can't find the answer for:
– When buying in a discretionary or unit trust who borrows the money, the trust or myself and my brother?
– Either way is there any way we can somewhat negatively gear it? I have heard that because we own units in the trust we can offset the rent disbursements earned by the trust against the interest we pay on the loan if it is in our name. Is this in anyway true?Thanks in advance for your help.
Hi
Who is the trustee?
It is usually the trustee and/or the trust that borrows the money. If the trustee is a company then the directors will need to give guarantees. With a unit trust all of the unit holders may need to give a guarantee.
Trusts cannot negative gear. But if you borrow to buy units in a trust, the unit holder may be able to claim the interest, but this will depend how the trust is set up. 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
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