Forum Replies Created
And in that year off, travel around the world and look for +ve cf properties.
Mix Business with Pleasure.
Bid
Can the trust pay for the child’s expenses directly i.e school fees, contributions to a college fund (eg ASG), medical insurance, etc.
Would these direct payments be still treated as the child’s deemed income (minor or major) or would they be deducted as expenses incurred by trust and would reduce the income available for distribution to the beneficiaries.
Hope I am not embarking on a wrong tangent here.
Regards
Bid
Hi skippygirl
I agree that any earned income by minor would be taxed at marginal rates and this would be a good way of paying out profits to the minors. It may not be significant (as it would be hard to justify), nevertheless something is better than nothing.
Bid
Thanks Terryw and Monoply
If I find anything further to reduce the CGT bill, I will post it in this thread.
regards
Bid
[hmm] So much for my brain wave.
I suppose ATO probably won’t fuss too much if a person pays tax on deemed sale of 5-10% lower then the mkt value if there is no third party valuation done. In which case atleast some CGT saving might be possible. But then I don’t think wife would be able to show a higher cost base than the husband’s sell base, so would end up with a CGT liability.
Anyway, coming back to your original comments, this scenario might still be beneficial in some individual’s circumstances where wife marginal rate of tax is lower or she is entitled to more deductions or rebates to offset the income, as compared to husband who might have to pay higher tax.
regards
Bid
Thanks Derek,
Just to repharase to make sure I understand it correctly –
Although me and my wife are jointly and equally liabile for the loan, the ownership of property drives the expenses deductions. I can claim 99% of the interest expense (instead of 50%) against my 99% income.
Thanks
Bid
Marc1
In respect of your friend’s situation – if he is trading frequently in shares then he may be eligible to be classified as a ‘Trader’ and not an ‘Investor’ in shares, in which case he would be allowed to treat his profit as income and not capital gains.
Ask him to look up the following link at the ATO websire for more information.
http://www.ato.gov.au/businesses/content.asp?doc=/content/21749.htmMy position is flip side of the same coin – I have a loss from share trading which I would be happy to offset against my normal income instead of carrying it as a capital loss. I recently found this out and am looking for a good accountant to get further advise.
Hope this info helps your friend.
Bid
In regards to to your comments –
“If it is your tempory main residence it may be worthwile – you could negative gear it for a period and then move on and buy your final main residence in personal names and retain the existing one in the trust structure- reaping tax and other benefits.”
If someone claims FHOG on the property, is there a requirement how long the property has to be held as a residence before converting it to IP?Regards
Bid
Thanks everyone for the info.
I am getting a copy.
[grad]Bid
TerrywI see your point now. How would the bank view this arrangement ie would it be comfortable lending the money for buying units. Maybe yes, if they still hold the mortgage over the property. I will check into this. Meanwhile, do you know any instances where this arrangement has been in place and worked well?
Thanks for the input, Bashiba
