Hi all, I have a question regarding renting a property from my trust.
If I have a fixed unit trust and it owns a property, can my company then rent the property as an office?
Trustee (Company) directors: me and my partner
Company (PTY LTD) director: me
If this is allowed, is there anything in particular I should be aware of such as formal rental agreement or market rate rent?
Thanks in advanced
Aaron
Hello Aaron,
I don’t see why not, provided it is on an arm’s length basis.
For instance, Z Company P/L can rent from X Unit Trust, notwithstanding they are separate but related entities.
That said, it would be wise for you to speak to your accountant / lawyer about this to ensure the terms are appropriate.
Good luck!
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Much appreciated Steve. Will definitely consult with an accountant beforehand.
The trustee would need an express power in the trust deed to rent to a beneficiary.
But if the trustee as the same company you are referred to? There is a common law rule against contracting with yourself, even in different capacities. but the ATO seems to allow it for tax purposes. Best to seek legal advice
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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