- Rob G. wrote:CGT still matters because it is a tax on inflation.
Even your dependents may inherit the property with your historical cost base and substantial underlying tax liability – AKA 'death taxes'. I seem to remember Terry trying to raise estate planning issues with you.
Present value does matter with capital appreciating assets.
What makes you think the 50% discount will remain … non-residents recently lost it.
Basically, the ATO's equity will be increasing along with yours or your trust's.
Streaming of capital gains through trusts is constantly being reviewed by government.
Terry is clearly concerned about your seeming lack of instruction from the solicitor that sold you the trust deed, and your reliance upon the conveyancer's legal advice which might trigger double stamp duty upon changing the names on the contract if done incorrectly.
Please all, there is no need for condescending. If you don't have anything helpful to write don't bother. It doesn't make you look smart thread crapping and being rude to someone who is just here for some helpful suggestions.
Rob, you don't need to 'seem to remember' anything, it is all here in writing. You can scroll up if that helps you remember.
I repeat again, I plan on keeping this as an investment indefinitely. CGT will apply either way eventually if sold as when it is sold something else will be my PPOR. My dependents would pay CGT in either scenario if they sold it.
I repeat, I plan to see another Lawyer. I will not be transferring the property if it means paying stamp duty twice. I repeat I understand succession planning.
"What makes you think the 50% discount will remain" not sure what the point is of this condescending hypothetical. You could say the same for the PPOR 6 year rule in section 118.145 in the act for example.
"Streaming of capital gains through trusts is constantly being reviewed by government." – ok.
How about we talk about the merits of buying an investment property in a trust vs personal? and when its best to do one or the other, and when not to?
I think it you should take an approach where you consider some of the many aspects:
1. Asset protection
a. From potential creditors
b. Family law type issues
c. Losing control of the trust
2. Taxation of income
3. Taxation of CG
4. Stamp duty
5. Land tax
6. Lending issues
7. Succession issues
Factor in the costs for legal advice, loans, tax advise, ASIC fees (if applicable), amending trust deeds down the track etc
From financial pov just draw up a spreadsheet and work out the differences in cashflow between owning in your own name v owning as a trustee.
Also you haven't even considered where to put a unit trust in there too – this could create further opportunites for some tax strategies and also the ability to transfer the units to a SMSF in the future.
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
Thanks Terry, good summary. I'm meeting a Lawyer tomorrow whom I trust (no pun intended!) and has actually helped me before with some property matters. He had a chat with me over the phone and understands all the issues. Wish I saw him before setting up the trust but I trusted the accountant I sought advice from whom arranged the creation of the trust for me.
Anyway now I have some good issues to raise tomorrow.
I also started to think about the SMSF as well as a possible option, if I am keeping this perpetually.
p.s. he did confirm it is ok to transfer the interest in the contract to the trust and only pay stamp duty on the deposit ($100).
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