Hi to you all.
Long story so I'll try to shorten it and only mention relevent info to our problem. Monica has 1 IP in Tasmania. Initially purchused as PPOR however IP for a year now. Bought 9 years ago, purchased for $70,000 and borrowed $60,000. IP now worth $210,000 loan balance now $175,000 redrawn for monica's personal spending over the years. Now our accountant's advise is to sell this IP as we can't claim the usual tax benifits on the interest of the 175k but only the intersest on the 60k originaly borrowed to purchase the property.
We want to keep it as the growth is excellent (tripled in 9 years).
How can we keep this IP and gain the full interest tax benifit on the loan?
Perhaps refinance in both our names or monica sells the IP to a trust run by company owned by our selves?
Any ideas would be appreciated. I don't think our accountant is very IP savvy.
Thanks
Hi FAME
Firstly welcome to the forum and I hope you enjoy your time with us.
If you really want to keep the property then certainly selling the property to a Trust is an option however just bear in mind you cop Stamp Duty on the Transfer value but i guess on $210K it is not a fortune.
Also might want to check with the OSR as to whether you would loose your Land Tax concession.
In most States where the asset is held in individual names there is a threshold where the land is exempt from LT but often where the property is held in a Company or Trust name this benefit is eroded.Still we are not talking sheep stations and at the end of the day if you believe the asset will appreciate in value over the long term certainly worth considering.
Richard Taylor | Australia's leading private lender
M could sell to F. F could borrow the full amount and claim the interest on this.
Stamp duty may be exempt in some states for transfers between spouses.Or you could sell to a trust, which would be good long term, but then any losses could not be used to offset your personal incomes (unless you are self employed).
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
Wow Thats some fantastic advice. Thanks guys.
I think M selling to F might be the way to go. I'll do some research and find out about the stamp duty.
Cheers Fabian
Just out of interest, if you were to sell this to a trust can you use a deflated price to stem some of the stamp duty payable say sell for 175k etc.
Stamp duty and CGT are still payable on market value.
There is still a possibility to aim for a lower figure were you can justify it with a sworn valuation.
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
You must be logged in to reply to this topic. If you don't have an account, you can register here.
