hi all
i own a property which is under both my name and my wife's name. I have moved from that place and turned it into investment property. My wife has also left her employment because we just had a baby and she will stay to be full time mum for time being.
My question is, since she is not working and i am the sole income earner will i be able to claim 100% tax deduction from this property (i am making 8000 dollar loss this year from it) or do i still need to split it half with her? she hasnt got any income to deduct from this year, does it mean her loss will carry on until she have got income to offset that loss in the future?
thanks
You can only claim your own deductions. Since you don't own her half you cannot claim for expenses related to this. If she ends up with a loss she can carry forward until next year.
But this is a shame as an individual can earn up to $16,000 pa and not pay tax. Do you have any family members with discretionary trusts who could divert some income over rather than waste it?
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
Is it beneficial to consider buying your wives interest in the property out?
In some States you will incur Stamp Duty others not. Still might be worth depending on the numbers.
As Terry mentioned loosing out on the deductions might be painful in the short term.
Richard Taylor | Australia's leading private lender
Is there any way you could employ your wife some how?
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
Terry: interesting suggestion regarding the trust, can you tell me more about it? will I be able to set it up and channel my income there?
Richard: I’m in queensland and apparently I would be exempted if it’s from single ownership to joint ownership but not the other way around. I’m happy if I’m wrong thoughTerry: mmm if only I can employ her to take care of our daughter
it’s more than a full time jobOn serious side, I might look at setting up a company and employ her
Your wife would probably be a beneficiary of many trusts – unknown to herself perhaps. Trusts are worded widely to catch as many people as beneficiaries as possible. So one of your family members, even distant family members, may be able to save to tax.
If one of these trustees could distribute to her that is possibly $16,000 that would go to someone else at a higher tax rate which could then become tax free. 30% of $16,000 is about $3,400 – which may be the savings.
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
silverx wrote:Terry: mmm if only I can employ her to take care of our daughter it's more than a full time job On serious side, I might look at setting up a company and employ herYou would have to employ her in some way so as you could claim a deduction. Otherwise you would be still paying the same tax and she would be paying tax on her income = more tax than before.
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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