Hi I want to go sailing for 2 years but if I dont work and not paying tax I wont get my tax return that is usually made up of $20K depreciation. The 2 properties combined are positive geared $30K and I only have a small loan on one of them. Whats the story with this. The rent is income. But im not paying any PAYE tax. ??????
You will still pay tax on your taxable income if it is over $20,450.
Your income will be the rent you receive. From this you can deduct the normal deductions such as rates, insurance, interest and depreciation etc etc.
If this figure is over $20,450 then tax will be payable at the applicable rates.
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
however if your property is in another type of legal structure, such as a partnership or trust, then i suppose you can optimise it so that you efectively don't have to pay tax.. i think this could apply?
Matt no doesn’t quite work like that.
If the property is held in Trust the Trust would want to distribute the profit otherwise it is Taxed at the highest marginal rate.
Certainly if it had non working beneficiaries the Trustees could consider making paying them a distribution however still not going to get around the $20,450 figure Terry mentioned.
Anything over this and you are Taxed. No point in paying the distribution to a Company as the Tax rate here is 30 cents in the dollar.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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