How easy is it to create a new trust and name yourself as appointer of that trust, buy property yourself and give it to the trust. Once property is owned by the trust then you should not occur any potential problems with centrelink as you don’t own any property yourself, but you control property owned by a trust.
This is better than owning property yourself as centerlink will probably have problems with that. That way you may keep payments being made to you.
My question is- does centerlink keep track of new trusts as they are being created?
Also Does centre ink keep track of all people involved in trusts?
Does centerlink know if you receive a insurance payout?
I think your question is how will centerlink find out??
A question i rather not answer….but if your going to go against the rules; you take a risk- you may not get caught today but you will always be looking behind your back till that day comes.Just note when setting up a trust or any financial account; your name is STAMPED all over it + dated…so if they need to backdate any payment made; they can.
When you open a trust, your still a “guarantor” or a beneficiary of the trust… something you need to declare to centerlink ( there’s a question which ask are you a guarantor of any financial product )
So really in affect you do own the trust, all your doing is creating a 3rd entity which is set up on a different structure for tax reasons..but the ownership still goes back to you.
Rather then trying to BEAT the system… just work WITH the system.
Regards
MichaelPeter456 wrote:How easy is it to create a new trust and name yourself as appointer of that trust, buy property yourself and give it to the trust. Once property is owned by the trust then you should not occur any potential problems with centrelink as you don’t own any property yourself, but you control property owned by a trust.This is better than owning property yourself as centerlink will probably have problems with that. That way you may keep payments being made to you.
My question is- does centerlink keep track of new trusts as they are being created?
Also Does centre ink keep track of all people involved in trusts?
Does centerlink know if you receive a insurance payout?
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I am pretty sure Centrelink sees through trusts and counts the assets of the trusts as if they were the ssets of the beneficiaries/appointer.
Cheers,
LukePeter456 wrote:How easy is it to create a new trust and name yourself as appointer of that trust, buy property yourself and give it to the trust.It is extremely easy to create a trust. It could all be done in a few minutes.
But what do you mean 'give it to the trust?'. If you bought a property and then gifted it to the trust you would pay stamp duty twice.
Peter456 wrote:Once property is owned by the trust then you should not occur any potential problems with centrelink as you don't own any property yourself, but you control property owned by a trust.Trusts cannot own property, it is the trustee that is the legal owner of the property. If you are the trustee then that is you!. If the company is trustee then the company is the owner.
But doing it this way probably won't get around Centrelink, see s 1207v of the Social Security Act 1991,
Peter456 wrote:This is better than owning property yourself as centerlink will probably have problems with that. That way you may keep payments being made to you.its not that simple.
Peter456 wrote:My question is- does centerlink keep track of new trusts as they are being created?No, no one does.
Peter456 wrote:Also Does centre ink keep track of all people involved in trusts?No
Peter456 wrote:Does centerlink know if you receive a insurance payout?No.
But if you are receiving a benefit you would be required to notify centrelink of you taking an interest in a trust or receiving an insurance payout. If you don't you would be breaking the law. Centrelink may also find out by other means such as datamatching with the ATO etc.
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Shape wrote:Just note when setting up a trust or any financial account; your name is STAMPED all over it + dated…so if they need to backdate any payment made; they can.vMichael,
This is not so. In some states, such as NSW, the trust deed is required to be stamped (costs you $500 too!!). The stamp is just a small imprint stating the date and the amount of duty paid. They usually try to stamp it on the schedule page which is usually the one with the beneficiaries listed. But often these go over several pages.
Even after stamping it would be possible to legally amend the deed (and illegally possible to change it), assuming the trustee has the powers given in the deed.
But changing the beneficiaries of a trust could be seen as causing a resettlement and this would mean a new trust is formed with all the property of the trust being transferred automatically = stamp duty and CGT.
For centrelink purposes it is possible to remove yourself as trustee, appointor etc, and as a beneficiary, but Centrelink can apply that test they use for disposal of an asset – they can still assess you as owing it for up to 5 years after disposal. Some lawyers think removing a beneficiary will result in a resettlement too. So I think centrelink accepts a beneficiary making an unrevocable declaration that they are forever renouncing taking a benefit from the trust.
Its a very complex area and if your trusts have that many assets anyway it is probably not worth the bother and legal fees to try to get $500 per fortnight in payments.
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Terryw, I suppose what I meant was to buy property in a trust to begin with. Not for yourself and then give it to the trust. (Then you pay stamp duty twice). If you make yourself appointer of the trust then make a company or friend/spouse trustee. That way that person actually owns the property rather than yourself. You could even live in a property which is owned by a company or spouse and still receive your centrelink benefits with no complications. So long as you do not actually own the property.
You could even be paying rent to the trustee for a property you control as appointer and perhaps you could also be named sole beneficiary. (but that may be problematic if you are receiving other sources of income for centerlink)
Ultimately in that case the trustee is the one who decides the amount of rent to be paid for living in a property is it not? The more rent you pay, the more rent assistance you may be eligible for from centerlink. also the more rent you pay, the more profit is to be made from the property and the more you may receive as sole beneficiary.
I think centrelink would probably deny you benefits if you have involvement with a trust. I know I would want to if I worked for them.
It’s a fascinating area I think.Does centerlink actively cross check with the ato if people have any involvement with trusts or only if they attract attention to themselves?
How does the ato find out if you receive a insurance payout? If you receive a payout and deposit the money directly into an account of a spouse and then buy property in a trust for the spouse to become trustee and you appointer.
The bottom line is if the ato dosent know then centrelink will not know unless you tell them.
Who else may give information to the ato or centrelink? I suppose banks may give information to ato depending on which bank on transactions over a certain amount. Some banks may not….
For example big banks like comm, george, anz, west, ect may. But what about smaller banks like credit unions for example.
Peter456 wrote:Terryw, I suppose what I meant was to buy property in a trust to begin with. Not for yourself and then give it to the trust. (Then you pay stamp duty twice). If you make yourself appointer of the trust then make a company or friend/spouse trustee. That way that person actually owns the property rather than yourself. You could even live in a property which is owned by a company or spouse and still receive your centrelink benefits with no complications. So long as you do not actually own the property. You could even be paying rent to the trustee for a property you control as appointer and perhaps you could also be named sole beneficiary. (but that may be problematic if you are receiving other sources of income for centerlink)Centrelink would still be likely to class that asset as your own for the purposes of assessing benefits if you are appointor, or a beneficiary or if you influence any control over the trust.
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Peter456 wrote:Terryw, I suppose what I meant was to buy property in a trust to begin with. Not for yourself and then give it to the trust. (Then you pay stamp duty twice). If you make yourself appointer of the trust then make a company or friend/spouse trustee. That way that person actually owns the property rather than yourself. You could even live in a property which is owned by a company or spouse and still receive your centrelink benefits with no complications. So long as you do not actually own the property. You could even be paying rent to the trustee for a property you control as appointer and perhaps you could also be named sole beneficiary. (but that may be problematic if you are receiving other sources of income for centerlink)Go to the centrelink website and do a search on trusts and they will have some info brochures available. There is a 16 page form, that I read a while back there, which asks all the questions on trusts. There also brochures which summarise how they treat them.
Paying more rent to a trust may sound good, but the trust will have higher taxable income which it then needs to distribute. Someone among the beneficiaries will have a higher taxable income and more tax may be payable.
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Peter456 wrote:How does the ato find out if you receive a insurance payout? If you receive a payout and deposit the money directly into an account of a spouse and then buy property in a trust for the spouse to become trustee and you appointer. The bottom line is if the ato dosent know then centrelink will not know unless you tell them. Who else may give information to the ato or centrelink? I suppose banks may give information to ato depending on which bank on transactions over a certain amount. Some banks may not…. For example big banks like comm, george, anz, west, ect may. But what about smaller banks like credit unions for example.Some insurance payouts would be taxable. If it is non taxable then the ATO may not find out. But the insurance companies may also inform the ATO of any payouts as well. Some insurance payouts may not affect centrelink payments, but others will and they do specifically ask questions about them. If you lie you may get away with it, but you may also get caught.
There is also a financial database called AUSTRAC. All transactions in Australia are recorded and both Centrelink and the ATO have Austrac access. So if they were investigating someone they could do a search and find evidence of deposts and money transfers. All banks, and many other institutions such as casinos etc are required by law to notify Austrac of certain transactions.
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If you want to own property and still get access to centrelink benefits then one way to do it would be to assist your children set up discretionary trusts well before your retirement. The children should control the trust without your influence and you should have no role or control in the trust at all. Hopefully the children may give you some money as gifts later on.
Hopefully the children don't end up with family law disputes too!
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Terryw wrote:If you want to own property and still get access to centrelink benefits then one way to do it would be to assist your children set up discretionary trusts well before your retirement. The children should control the trust without your influence and you should have no role or control in the trust at all. Hopefully the children may give you some money as gifts later on.Hopefully the children don't end up with family law disputes too!
Well it is possible to do so but it means my children/spouse for example could take the property! Or in my case the spouse would actually be a trusted friend. I would need to assist my spouse to set up a discredentary trust and then make him the appointer and trustee. He may give income from the property as “gifts” or I may just get him to use it to take over payments of some of my personal ongoing bills.
Are there any other means you would know of achieving this task?
Peter456 wrote:He may give income from the property as "gifts" or I may just get him to use it to take over payments of some of my personal ongoing bills. Are there any other means you would know of achieving this task?Assuming the property/trust is cashflow + as you imply, any "gifts" as you call them are actually considered income and must be declared to the ATO and income tax paid which would be at your "friends"marginal rate of tax. I suppose he could then "gift" you money after that.
Assuming we are talking recieving an aged pension, I believe there are asset disposal tests that look at any transactions in the years prior to make sure they haven't been to circumvent the intent of the system. i.e. Parent transferring property to child to get under the asset cap and then turning around 12months later and claiming the pension.
Peter456 wrote:Terryw wrote:If you want to own property and still get access to centrelink benefits then one way to do it would be to assist your children set up discretionary trusts well before your retirement. The children should control the trust without your influence and you should have no role or control in the trust at all. Hopefully the children may give you some money as gifts later on.Hopefully the children don't end up with family law disputes too!
Well it is possible to do so but it means my children/spouse for example could take the property! Or in my case the spouse would actually be a trusted friend. I would need to assist my spouse to set up a discredentary trust and then make him the appointer and trustee. He may give income from the property as “gifts” or I may just get him to use it to take over payments of some of my personal ongoing bills.
Are there any other means you would know of achieving this task?
You can’t have your cake and eat it too!
I think you may find that if u have a spouse then centrelink will consider trusts they control to be the same as ones you control
There is no real way to do it without entrusting someone
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bumskins wrote:Peter456 wrote:He may give income from the property as "gifts" or I may just get him to use it to take over payments of some of my personal ongoing bills. Are there any other means you would know of achieving this task?Assuming the property/trust is cashflow + as you imply, any "gifts" as you call them are actually considered income and must be declared to the ATO and income tax paid which would be at your "friends"marginal rate of tax. I suppose he could then "gift" you money after that.
Assuming we are talking recieving an aged pension, I believe there are asset disposal tests that look at any transactions in the years prior to make sure they haven't been to circumvent the intent of the system. i.e. Parent transferring property to child to get under the asset cap and then turning around 12months later and claiming the pension.
You have to distinguish gifts from income. Gifts would be tax free whereas income wouldn’t. Gifts can be made from a trust out of cApital as long as the trust deed allows. But gift from. Trust mAy be caught by centerline rules.
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