All Topics / Help Needed! / Asset Protection loooong term!!!! IS a trust the way to go?
- Terryw wrote:Chiz
Units and hybrids technically also quarantine losses. ie losses from a trust cannot be used to offset personal income (A trust is a different entity for tax). But a way around this is where an individual borrows money to buy the units in the trust and the individual claims the interest on this loan.
CHIZ
i have purchased a couple of properties using our PIT with corporate trustee – loans in my name hence i claim the interest as terry outline above. The PIT which is registered in SA has no vesting end date like many other trusts. also it has bloodline benifits.Chiz,
Are you confident it will survive an ATO audit?
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
Terryw,
Do you mean the PIT (Property Investment Trust)? Will the PIT survive an ATO audio?
No idea. I not an accountant, or lawyer I just read a book which was written 2009 by two accountants which seemed to be pointing me in the direction of a PIT. My next step is: I’m going to seek professional advice about trusts (including the PIT) before starting to invest.
BTW: I live in Melbourne so not sure if its different in VIC…
Cheers,
Yes, the PIT., Will it survive an audit?
There are many problems with hybrid trusts. Depend on the date of your deed and the wording the interest may not be deductible at all, or partially deductible, or maybe even fully deductible.
State doesn't matter for taxation matters as it is a commonwealth tax.
Best to seek advice before you invest – and get it in writing.
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
“Depending on where you are based I could recommend a few good solicitors in this area.”
Thanks that would be great Robert I reside in the Logan Central area just South of Brisbane. A heads up on some reliable well informed solicitors would be apprecaited.
Theres always ways to protect yourself but its a mater of being intelligent and making the best choices without being too analytical.
If you were in a position where one could sue you or spouse take your asses unwillingforly, you could always attach 2nd mortgages and cavaets to assit in retaining equities.
If I had time again, I would make greater use of trusts, however they do slow the finance process and purchasing up as LVR is lower in many circumstances.
Each individual is different and should consider their own investing goals.
Must admit never found Trusts slowed up my financing for properties and i have my entire portfolio in 5 separate Trusts with the exception of my PPOR which is in my wife's name.
I am with Terry if you have gone the PIT route good luck on both finding a lender in the future and also surviving an audit..
Richard Taylor | Australia's leading private lender
Wish my family had heard about a bloodline trust years ago. My parents owned a beautiful dairy farm. They split it in half and two sons worked each half. They had some kind of joint trust arrangement with each of the sons. Guess what. Both boys divorced. Guess who got the dairy farm(s). The women.
It's caused a lot of heartache. My parents thought they got the legal stuff together to figure out how to keep it in the family but ended up with country hick lawyers to screw it up. Rural people really mess up their agricultural holdings terribly.
Get the best legal advice you can and don't sign anything until you understand every last bit of fine print.
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