All Topics / Legal & Accounting / When to use a trust, and when to use your own name

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  • Profile photo of echelon6echelon6
    Member
    @echelon6
    Join Date: 2009
    Post Count: 19

    Hi

    I'm just trying to work out the general advantages of a trust over buyiing in one's own name.

    So am I correct to say that as I build my portfolio, I should put the negatively geared / capital growth ones under my own name (I plan to have a long career so my PAYG tax would climb), and put the positively geared +CF IP's in a trust?

    Or can IPs in a trust offset my personal income as well?

    Also, can IPs in a trust make use of my currently unused FHOG?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Just remember negative geared properties will one day make a profit. So buying in your own name now may save some tax, but long term…..

    Trusts are separate entities for tax, so any losses cannot be used to offset your personal income.
    FHOG cannot be used for properties purchased in a trust.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Grow SMSFGrow SMSF
    Participant
    @evolve
    Join Date: 2009
    Post Count: 66

    Have you thought about using an SMSF?

    If structured correctly you can get the best of both worlds i.e. lower tax when you sell plus lower tax all the way through – regardless of whether it is positive or negatively 'geared'.

    Want to know more? If so let me know.

    Cheers
    E

    Grow SMSF | Grow SMSF
    https://growsmsf.com.au
    Email Me | Phone Me

    Self-Managed Super Fund (SMSF) Specialist Accountants

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